Fund management has become very easy these days with the availability of hardware and software wallets built by a wallet provider. They store vital information in the form of public and private keys that grants you access to your digital assets on the blockchain network. The keys will be protected by strong passwords, and your funds will be restored immediately in case you lose your device or if you become a victim of a hacking attack.
How Does a Hardware Wallet Operate?
Hardware wallets are in high demand because your private keys are never exposed to your computer or smartphone; the hardware is immune to viruses or malware and is convenient and portable.
- It uses a USB drive and stores the digital assets of the users in secure cold storage facilities maintained offline.
- The device cannot be exploited by any hackers.
- Some of the shortcomings are the private keys will not be readily available, and you will require your physical wallet on-hand to access them immediately.
One of the popular hardware wallets in the market is Ledger Nano S. It supports 27 coins and more than 1500 tokens. The private keys of the user will be protected in a certified secure chip. It supports different digital currencies like Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, and Stellar. It accepts more than 15 different payment methods and renders multi-language customer support.
How Does a Software Wallet Function?
- The crypto assets can be accessed via your computer or mobile phone and are highly encrypted.
- They are also called hot wallets or online platforms.
- They cannot be downloaded and can be accessed through an internet browser.
- They are mostly used by active traders who need quick and safe access to their digital assets.
- The private keys are conveniently accessible for the users.
- It has an easy to use interface enabling smooth trading.
- The storage method is highly economical.
- The user will land in big trouble if he loses his private keys in case his device or wallet is hacked or infected with malware.
- They can be accessed either through mobile, online, or desktop.
Exodus is a famous software wallet. The features include real-time interactive graphs and charts depicting the price changes and market movement, 24×7 technical support in numerous languages, access to more than 120 different types of crypto assets, and is available on Android and iOS platforms.
What Should Users of the Exodus Wallet Do?
- Users need not formally register themselves on the platform.
- They can use QR codes to send and receive digital assets quickly.
- Their private keys are completely encrypted and fingerprint scanning is available.
- Transaction history can be accessed anywhere and anytime.
- The users also have an option to lock their wallets to keep their assets secure.
Why are Software Wallets better than Hardware Wallets?
- They are quickly accessible, and you can easily monitor and exchange your digital assets anytime. Professional cryptocurrency traders who actively strike deals in the market will prefer using a software wallet over a hardware wallet.
- Most of the software wallets follow the AES-256 encryption standard along with a four-digit PIN login mechanism. Hence, the best security practices are followed, ensuring the highest level of user safety.
- They support multi-currency viewing and also have a search facility to select the nearest Bitcoin sellers.
- They have a feature called Simple Payment Verification (SPV), where transactions can be instantly verified using fee adjustments.
- The users need not reveal any of their personal information like a phone numbers or email addresses anytime to anyone.
- They have an intuitive and easy to user interface for facilitating direct transactions between different cryptocurrencies.
- Since they are non-custodial in nature, they never store your private keys. Hence, it is all in the users’ hands to keep their private keys safely.
- Two-factor authentication is also available, adding another layer of security to the software wallet when compared to the hardware wallet.
- Software wallets can be installed for free, while hardware wallets involve incurring initial set up costs.
- Hardware wallets are risky if the firmware implementation has not been done properly. They are also less user-friendly, and users may find it difficult to access their funds than software wallets.
Some aspects the users must consider while taking part in Crypto Wallet Development
- Each type of wallet has its own set of advantages and disadvantages. Users have to understand how crypto wallet development works before transferring their funds.
- At the end of the day, your cryptocurrency holdings must be kept secure by the wallet provider.
- Safe storage of cryptos is the key for those who plan to execute transactions quickly and for those anticipating a long-term investment.
- They offer a massive list of cryptocurrencies along with round the clock customer support.
- It is important to make use of a wallet that is highly popular and has plenty of safety protocols in place.
- It is also critical to opt for a wallet that works well with some of the leading crypto exchanges in the market to quickly process transactions in the open market and strike profitable deals.