Buying crypto is one of the most convenient and most accessible ways of investment. Several people worldwide buy different crypto currencies from renowned platforms, such as bitcoin-prime.nl, Coinbase and so on. Some investors invest in crypto after thorough analysis, while a few young investors do it with the motive to earn a hefty profit. But, where do all these investors store all these currencies? Do they have an account like a bank or dedicated crypto wallets?
Generally, crypto currencies are stored in crypto wallets, but they are of two types: hardware and software wallets. Both wallets have some benefits and flaws; hence, they differ. This article will discuss the difference and similarities between the two known crypto wallets in use.
When it comes to hardware wallets, these form of wallets are known to be the most secure and dependable wallets where crypto traders can deal with their purchased crypto currencies with ease. The hardware wallets are also called cold storage, in which the currencies are stored in physical devices like external drives, etc.
To store crypto in cold storage, you need to plug the external drive into the online storage or the computer. Then transfer the digital currency into the wallet to keep it away from online exchange platforms.
The hardware wallet offers many benefits to the users, which are listed below:
Say NO to Hacking
The moment a crypto trader puts a private key or password to store the purchased digital assets, it almost becomes impossible for hackers to do any fraudulent activity. As the hardware devices are away from computers, hacking or copying the key is impossible for anyone.
Utmost Assured Safety With Encrypted Pins
The pins used in hardware wallets are known to only the crypto traders and not any random individual. This, accessing the hardware wallet becomes impossible for any criminal minded guy. So, an encrypted key lets you safely keep the crypto fund. Moreover, with encrypted pins, the device will self-destruct if an intruder uses the wrong pins continuously.
Keep Multiple Crypto currencies
As the hardware devices have more space and storing the crypto currency doesn’t require much space, we can keep multiple currencies in the hardware wallet. So, as there is no limit to buying numerous digital currencies, save as much as you can in a hardware wallet.
While making any transaction, you can verify it through the hardware wallet. As the verification is on a hardware wallet, no one can transact without your consent. This way, you can keep your crypto funds safe from others.
Moving on next to the software wallet, it is another type of crypto wallet commonly used by investors worldwide. People download the software wallet onto their computers to store digital currencies. The wallet is secured using an encrypted password that is only known to you. This way, it becomes easier for crypto traders to access the wallet unless someone knows your password. The software wallet comes up with several advantages for the crypto users, which we will discuss below:
Ease of Restoration of Wallets
The software wallet has a password, which we use to access the wallet. Even if you forget the password anytime, you can quickly restore and recover the funds by using the recovery phrase in the wallet. Hence, losing money due to forgetting passwords has a negligible chance.
Unlike the hardware wallet, the software wallet allows easy and faster transactions. Users can directly make transactions through online exchange platforms. The users will not have to connect to any external drive to complete the transaction, making the process quicker.
Can Manage Multiple Crypto currencies
The software wallet doesn’t limit the number of crypto currencies an individual can store in the wallet. But, the storage space of the wallet doesn’t allow users to keep as much as they want. So, an investor can store multiple crypto currencies in a limited amount in software wallets.
Some of the essential features of a crypto wallet are the safety and security of funds, hassle-free transactions, and quick trading options. The wallets are good in some cases with a few flaws, but they are the best options to store crypto currencies. Considering all the mentioned above factors, it is important that you choose any of the above two wallets accordingly.
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