Compare Crypto Storage Wallets 

When it comes to storing crypto, there’s no such thing as one size fits all, and each method of storage brings its own set of advantages and disadvantages. 

An exchange, such as Coinbase or Crypto.com, a software wallet such as Meta mask or Trust Wallet, or a hardware wallet such as Ledger are all useful options when it comes to storing crypto. 

Crypto exchanges were a game changer to cryptocurrency as a whole and meant that coins could be bought and sold at a press of a button. To allow this convenience, an individual is given a unique wallet address for each of the coins they hold in the exchange, whether it be Bitcoin (BTC), Ethereum (ETH), or any other alt coin.  

The advantages of holding coins in an exchange is that coins can be sold at a moment’s notice, whether it be for USDT, or any other paired coin. Exchanges can also be seen to offer some of the better staking rates out there, whether it be Crypto.com, Block Fi, or Kraken, to get users of the platforms to lock up their coins and keep them in an exchange for a set period. 

However, you may have heard the phrase ‘not your keys, not your crypto.’ This is a phrase that is tirelessly repeated across the crypto sphere time and time again. This is off the back of events such as the crypto exchange MtGox getting hacked, seeing 750,000 BTC stolen, and having to file for bankruptcy, or even because of exchanges locking individuals out of their account with no reason given, or because of a government court order. 

This is where software and hardware wallets come into play. These both supply investors with non-custodial wallets. If an investor has access to their private keys, this allows them to prove the funds are theirs, giving ultimate control of their cryptocurrency. 

Although, having your own keys says does come with its own risks. If the keys to a wallet are lost, there’s no way of retrieving the coins held in the wallet. We hear stories over and over of early Bitcoin (BTC) miners losing access to their wallet created years ago, with millions of dollars’ worth of coins now stuck in an inaccessible wallet for eternity. 

With this in mind, and the fact that a number of coins can still be staked on a software or hardware wallet, the biggest decision process really comes down to where the best staking rate can be achieved, and whether an investor trusts themselves to keep their seed phrase safe and this risk outweighs the risks of keeping coins in an exchange. 

Hardware Wallets

In terms of safety, hardware wallets are second to none. Storing coins in this type of wallet means that private keys are never exposed to a computer, the hardware cannot be compromised by a virus, all transactions need to be confirmed on the physical wallet before it can be processed, and can also be further secured with a pin number. The two biggest names in the hardware wallet space are Ledger and Trezor, both launching in 2014, with the first consumer wallets as we know them today.

Software Wallets

Even though software wallets aren’t locked down in the same way as hardware wallets, they still have a number of advantages over a hardware wallet. This is why they’re used as widely as they are. A software wallet still allows users to keep hold of their own keys, but also provides everyday flexibility that hardware wallets simply cannot. They allow for fast transactions to be made whether it be on a mobile, or a browser, allowing for ease of use on the go. This makes software more suited for investors who are likely to make payments, or trades on the fly, rather than just for hodling their coins long term.