The key difference between hardware wallets and online wallets is that hardware wallets are real physical devices that are used to store private keys, whereas online wallets are a type of crypto wallets where owners store their private keys online.
Cryptocurrencies have become a significant part of many people’s investment portfolios, but how can they be kept secure? To combat the problem of safety and security, different types of crypto wallets are available on the market, enabling investors to safely store their crypto assets. There are many types of wallets, but we’ll look at the differences between hardware and online crypto wallets in this article.
CONTENTS
1. Overview and Key Difference
2. What is a Hardware Wallet
3. What is an Online Wallet
4. Hardware Wallets vs Online Wallets in Tabular Form
5. Summary – Hardware Wallets vs Online Wallets
What is a Hardware Wallet?
A hardware wallet is a physical wallet in which private keys are stored. A private key is a string of numbers or letters that are saved in a file; it is effectively an investor’s password. Since it is stored on a physical device that is not connected to the internet, a hardware wallet is the safest and most secure sort of wallet. It is completely immune to hackers. Investors can feel comfortable that their assets are safe in a hard wallet. A hardware wallet, however, could be misplaced by the owner, in which case all of the owner’s assets would be lost.
Although protected from online hackers, a hardware wallet is less accessible than software wallets because it must be plugged into a computer to access your money. The Ledger Nano is the greatest hardware wallet on the market, yet it’s only the size of a typical USB drive. Although the device is rather pricey, ranging from $100 to $300, it supports over 700 different types of cryptocurrencies.
What is an Online Crypto Wallet?
An online crypto wallet is another type of wallet in which crypto owners store their private keys on an online platform. An online wallet is the most insecure method to store your private keys. This is because online wallets are easily susceptible to online hackers. However, an online wallet is very accessible as it can be accessed from anywhere as long as there is an internet connection, making it the most accessible and convenient type of wallet.
However, despite the unsafe nature, online wallets are very cheap and are often free. One of the most popular online wallets is the Guarda online wallet. It provides support for various different types of cryptocurrencies and also has a well-built customer interface, making it very user-friendly.
What is the Difference Between Hardware Wallets and Online Wallets?
Although both hardware and online crypto wallets serve the same purpose, to protect and secure private keys, they have several differences. The key difference between hardware wallets and online wallets is that the hardware wallets are very safe and are immune to online hackers; however, they are very costly. But, on the other hand, the online crypto wallets are highly insecure as they are online-based, meaning they can easily be attacked by cyber thieves. Despite this, online crypto wallets are easy to use and cheaper when compared to hardware wallets. Moreover, online wallets can be accessed from anywhere where there is the internet, making them more convenient.
The below infographic presents the differences between hardware wallets and online wallets in tabular form for side by side comparison.
Summary – Hardware Wallets vs Online Wallets
Both hardware and online wallets serve the purpose of protecting the private keys of crypto owners. The key difference between hardware wallets and online wallets is that a hardware wallet is stored offline on a physical device, whereas online wallets are stored online, making them susceptible to cyber thieves.
Image Courtesy:
1. “Bitcoin senden mithilfe des Ledger Nano S” By Marco Verch Professional Photographer (CC BY 2.0)
2. “Wallet-bitcoin-web-wallet” (CC0) via Pixabay