Cryptocurrency has rapidly exploded over the years from an internet trading sensation into a legitimate currency whose acceptance is widely expanding. But how can you actually carry and use cryptocurrency if it’s not fiat currency? There are three types of crypto wallets available — hard wallets and soft wallets — and each has its own pros and cons.
Hard crypto wallets
Hard wallets quite literally translate into hardware wallets — which in this case, is a specialised USB device that stores your private keys. Hardware wallets can be broken into two categories — hot (which stores your keys on an internet-facing device) and cold (which stores it on an offline device). Hard wallets (especially cold ones) are considered to be incredibly secure and are quite compact, making them easy to carry around.
Some of the benefits of this method are also some of its drawbacks, however. For example, being offline means that if you do want to use it, you’ll need to plug it in somewhere where there’s internet access. Some of the higher-end products, such as Ledger’s Nano X, offer Bluetooth connectivity with your mobile device for ease of use, however. Given the popularity of cryptocurrency and the cyber threats that exist, hard wallets are definitely one of the more attractive options.
Some popular vendors that provide hard wallets include Ledger and Trezor. Both companies offer two types of cold wallets with strict security practices, offline backups and compatible mobile applications. Trezor does have a leg-up on Ledger, though, with the addition of a password manager. Hard crypto wallets are the most expensive options since you’re purchasing physical hardware — but they’re also the most secure.
Soft crypto wallets
Soft crypto wallets can mean a few different things, but ultimately they’re all software-based wallets. There are computer wallets which store your private keys locally on your computer’s hard drive or on a cloud-based server, and, there are mobile wallets that are essentially the same, but allow for greater ease of access as they’re apps on your mobile devices. Obviously, this isn’t as safe as offline hardware, and even soft wallets that store your keys locally on your drive are still internet-facing and are therefore still susceptible to attacks.
If you’re looking to get started with cryptocurrency, then soft wallets can be great options as they’re easy and affordable. Crypto.com is one company that offers a number of mobile services such as the ability to easily access, buy, sell and swap your cryptocurrency on the go. Crypto.com encrypt your private keys locally using Secure Enclave in addition to 2FA and biometric authentication methods. Something this company also does is offer several physical cards that feature various perks such as “cashback” so to speak.
Other companies such as Exodus, offer both mobile and desktop applications allowing you to use the one that suits your needs best and offer over 130 cryptocurrency assets to date. They have also gone a step further and partnered with Trezor to offer unparalleled and seamless cross-platform solutions, allowing you to manage and exchange cryptocurrencies in Exodus securely using your Trezor hardware wallet.
Which one is best for me?
If you’re someone who is serious about cryptocurrency and has invested heavily into it, then we highly recommend looking at a hardware wallet option. It’s incredibly secure, and something you can keep on your keychain so you always have it with you. Pairing it with one of the companion apps offered by the aforementioned vendors is also an easy way to keep track of everything.
If you’re something who is new to cryptocurrency and are looking to test the waters before you commit to anything large or long-term — then a soft wallet is the obvious choice. Whilst not as secure as an offline device, they still leverage cutting-edge cybersecurity practices to mitigate the chance of phishing or other cyber intrusions from occurring. They’re also much more affordable and flexible for beginners.
Have you considered accepting cryptocurrency for your business?
Cryptocurrency is continually expanding with new assets constantly becoming available — make sure your business is future-proofed and ahead of the curb with secure and innovative payment methods. AWD can help implement crypto payments into your business so customers can pay for your goods and services with the currency of the future.
Get in touch with our technicians today to find out how we can help you with all things cryptocurrency by calling 1300 855 651 or filling out our online contact form.