Is A Hardware Wallet Really Needed To Keep Cryptos Safe?

Storing your crypto funds in a hardware wallet is considered safe because it is essentially an offline cold storage method and a non-custodial wallet. This means you own the private keys, and therefore you own your coins/tokens.

While it checks almost every aspect of safety & security, the hardware wallet owner is often the weakest link here.

When the owner loses the private keys or recovery seed phrase, there is no way to recover their crypto funds back. In short, it is lost forever.

Is storing crypto in a hardware wallet the only safe & secure method?

The answer is no. There are plenty of different safe & secure wallet services to choose from. You can choose between a “hot” or “cold” wallet, a paper wallet or even a software non-custodian wallet.

Here are the different types of secure and safe crypto wallet providers you can consider choosing;


1. Paper Wallet

Almost every coin/token supports a self-generating paper wallet.

Firstly, generating a paper wallet is free and can be generated by users anytime. Secondly, it is a “cold” (offline) wallet that is not connected to the internet. This greatly reduces the risks of hacking.

example-of-a-bitcoin-paper-wallet-showing-public-key-and-private-key-with-qr-code
Example of a bitcoin paper wallet showing both public and private keys.

Below are some of the recommended resources for generating a paper wallet;

The downside of using a paper wallet is the long-term condition state of the physical paper itself. The longer it is kept, the more deterioration may occur. For example, the physical paper may turn yellowish, and the ink itself may be faded. Paper is also easily prone to water & fire destruction.

Depending on your needs, you can consider keeping the physical paper wallet in lamination form and storing them in a fire-resistant safe.


2. Online Exchanges

As mentioned earlier, the weakest link is often the wallet owner. Private keys may be lost, resulting in the permanent loss of crypto funds. If you do not have a large number of crypto funds, keeping them on a secure exchange may be the best solution for you.

Why?

These exchanges have world-class security teams in place to protect their million’s worth of funds from their customers. However, they’re probably more paranoid than you when it comes to protecting their crypto wallet services.

The good?

You do not have to worry about maintaining your crypto wallet. This can be upgrading and troubleshooting. It is especially helpful when you have a wide range of crypto portfolios, each requiring its own specific wallets.

When you forget your exchange password, you can always rely on their technical support team to help you recover back your account.

The bad?

You do not own your private keys, which means, technically speaking, the exchange owns your crypto funds. Therefore, in the event of a hacking incident, your crypto funds may be affected. However, most exchanges have insurance in dealing with loss or theft of customer funds.

FTX

ftx-cryptocurrency-exchange-logo

FTX is the second largest cryptocurrency in terms of the daily trading volume. It supports over 300+ coins/tokens in almost every country. It has one of the lowest trading fees for buying and selling crypto.

FTX supports payment methods using supported fiat currencies, such as credit cards and wire transfers. They also have their own over-the-counter (OTC) desk so traders can convert their cryptocurrencies to fiat for withdrawals.

KuCoin

KuCoin-cryptocurrency-exchange-logo

KuCoin supports over 600+ coins and over 1100+ market trading pairs. The exchange offer services such as buying cryptocurrencies, spot trading, margin trading, futures, crypto lending and crypto staking services.

Payment methods include Google Pay, Apple Pay, credit and debit cards (VISA and Mastercard), Paypal, bank wire transfer and many more.

Bitfinex

bitfinex-exchange

Founded in 2012, one of the notable strengths of Bitfinex lies in its low trading fees, with most trades costing 0.20% or less. In addition, the exchange platform supports trading over 170+ coins in over 400+ crypto market pairs and allows users to perform margin trading, derivatives, and advanced order types in over 52 countries.

Bitfinex offers a wide range of payment methods such as credit and debit cards (VISA, Mastercard and UnionPay) and on-ramp services such as iDeal, GiroPay, Klarna Sofort and bank wire transfer.


3. Non-Custodian Software Wallets

Software crypto wallets are free to use and install. Non-custodian means the users have complete control of their wallet funds, including safeguarding their private keys and recovery seed phrases.

Exodus

Exodus users have full access to their own wallet private keys and are responsible for their security and safekeeping. Exodus has no access to your wallet or private keys.

Founded in 2015 and headquartered in Omaha, Nebraska, Exodus provides an excellent, easy-to-use interface for beginners with a high level of security in place. In addition, it has a built-in exchange to allow users to buy and sell their crypto assets quickly. Payment methods include credit/debit cards, bank transfers and Apple Pay.

Other features include support for 200+ coins/tokens, live charts & portfolio view, 24/7 human, technical support and the ability to stake crypto on selected coins/tokens.

Trust Wallet

trust-wallet

Trust Wallet was founded in 2017 and is based in Mountain View, California. The wallet is decentralized, diverse and non-custodian and focuses mainly on mobile devices while supporting over 1 million cryptocurrencies across 53+ blockchains. Trust Wallet was acquired by the Binance exchange on 31 July 2018.

The wallet is a one-stop service to buy, store, collect NFTs, exchange & earn cryptocurrency all in one wallet. You can easily use a credit/debit card to purchase your crypto asset and swap them into another crypto using the Trust Wallet interface.

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