Self-Custody Your Funds: Software vs. Hardware Wallet

It’s not unusual to hear about a centralized exchange or service being hacked, insolvent, or many of the other nightmares they’ve faced in the recent years. Unfortunately these nightmares usually come with terrible downsides for us if we choose to keep our tokens or other assets sitting on these exchanges.

That’s why it’s always important to self-custody your crypto funds if you want to avoid potentially losing your hard earned money. In this article, I’ll explain the difference between software and hardware wallets, as well as some wallet choices that are reputable in the industry.

Software vs. Hardware Wallet

Software wallets (also called: hot wallet; hot storage) and hardware wallets (also called: cold wallet; cold storage) are both ways to store and manage your crypto. The simple explanation when it comes to differentiating the two is that, a software wallet is secured by whatever device you’re using and is generally seen in the form of a browser extension or mobile application.

A hardware wallet on the other hand is often secured by an external device with extra-hardened security when it comes to keeping your crypto safe, such as its own secure enclave and other useful additions, ensuring that your private key or seed phrase never leaves the hardware wallet.

This helps keep your funds safe from malware or certain phishing/hacking vectors that a software wallet might potentially expose you to. It’s always recommended to keep your funds on a hardware wallet, however, a software wallet that is properly secured is great for convenience and accessibility when it comes to making small transactions.

Software Wallets

Frame

When it comes to desktop focused wallets, Frame is a privacy focused Ethereum wallet that runs natively on macOS, Windows, and Linux.

Frame provides support for other EVMs as well, such as Optimism, Arbitrum, Polygon, Gnosis Chain, and more.

MetaMask

This one needs very little explanation — available on practically all devices, MetaMask is the #1 software wallet for managing your Ethereum and other EVM wallets.

Rainbow

While Rainbow wallet is only available on iOS (with Android in beta), it’s a great mobile wallet providing great user experience when interacting with your wallet, as well as for using WalletConnect with various dapps.

For onboarding, Rainbow also allows you to conveniently purchase ETH and other crypto directly with Apple Pay.

Hardware Wallets

Lattice1

The Lattice1 by GridPlus is the gold standard for luxury hardware wallets that maintain next level security. With a dedicated secure enclave, anti-tamper features, secure screen, and human readable smart contract markup it’s a worthy wallet if you have the funds.

While the large touch screen is a great feature over some of the other available hardware wallets, the access cards used to manage multiple wallets is also a unique and welcome feature.

Ledger

The Ledger is one of the most highly used, highly rated, and all around most popular hardware wallet in the world of crypto. There are different versions, the Ledger Nano S and it’s bigger sibling, the Ledger Nano X — both with security that will keep your funds in your hands.

The Ledger Nano X does have some additional features and security upgrades, such as bluetooth capability as well as an internal battery to use the device completely wirelessly.

Trezor

The Trezor, almost equal to Ledger in terms of quality, popularity, and security, is also one of the top wallets in crypto. Like Ledger, there are two different version, the Trezor Model T, and the Trezor Model One.

The Model T has a more elegant touch screen with some other additional features, whereas the Model One is the flagship with physical buttons and a more simple approach.

Offline Storage

Nothing beats writing your seed phrase down on paper and locking it away forever, but paper is not always fire proof or tamper proof. Therefore I’ve added a few additional options for backing up your seed phrase in a more secure way.

Hodlr Disks

If you want the luxurious (and expensive) route to pair with your Lattice1, the Hodlr Disks are great stainless steel, solid, fire proof backups that are designed very well.

This way it’s much harder to lose and resistant to water, fire, and all that good stuff.

CryptoSteel Capsule

Made by Ledger, the CryptoSteel Capsule is a cheaper alternative to the Hodlr Disks that serves essentially the same purpose. Stainless steel backup of your seed phrase that will be resistant to fire and tons of other stuff.

Thanks for reading — and while you’re here:

To stay up to date on everything crypto and get even more insight in the market, try out Alphaday, the one tool you need to stay up to date and interact with crypto using easily customizable dashboards.

Don’t forget to join us on Discord!

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store