Crypto wallets store the private keys for your digital assets, which are used to authorize transactions.
But crypto wallets are not all one and the same.
There are two main types of crypto wallets, known as hardware and software wallets.
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What Is a Software Crypto Wallet?
As the name suggests, a software crypto wallet is entirely digital.
You may have already heard of some software wallets before, suchas MetaMask, Trust Wallet, and Exodus.
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These are hugely popular wallets that offer users a range of useful security features.
This software wallet is not only simple to use but has a clear focus on security.
Trust Wallet incorporates PIN codes, biometric scanning, and recovery seed phrases into its infrastructure.
The platform also never stores any user data on its servers to further protect your information.
Software wallet apps can also come with additional features,including staking.
However, there is one glaring issue associated with software wallets, and that’s their reliance on computers.
Keyloggers are often used to hack crypto wallets, wherein thousands or even millions of dollars can be lost.
Thankfully, there areways to protect against keyloggers!
This doesn’t mean that software crypto wallets are totally unsafe but is certainly something to consider.
Now, let’s get into the specifics of hardware wallets.
What Is a Hardware Crypto Wallet?
A hardware crypto wallet is a physical gear used to store yourprivate keys.
These come in the form of small, hand-held pieces of hardware that can be easily stored safely.
But why would you need a physical machine to store your private keys?
The main reason why people use hardware crypto wallets is their extremely high levels of security.
This is because hardware wallets store your private keys offline.
It’s this huge security perk that makes hardware wallets safer overall than software wallets.
This is why most crypto holders prefer to opt for the free option instead.
The two main hardware wallet providers in the market today are Ledger and Trezor.
Let’s take a look at Ledger’s Nano X to delve deeper into hardware wallet security features.
This wallet uses something calledBOLOS, or the Blockchain Open Ledger Operating System.
BOLOS also isolates your recovery seed phrase from all applications existing on your hardware wallet.
It’s this chip that stores your valuable private keys.
Again, this further protects your data and makes it incredibly difficult to access and steal.
The Nano X is also tamper-resistant and is protected by a PIN code.
A custodial wallet is one that holds and protects your private keys for you.
However, if you’re using a non-custodial wallet, you should probably be very careful.
Should You Use a Hardware or a Software Wallet?
Both software and hardware wallets can be hacked, though the latter is considerably more difficult to infiltrate.
