Approximately five million crypto holders currently use the hardware wallet to store and access their assets. At the same time, about 295 million crypto owners have now introduced this type of storage method to their investment portfolios. The total market size of crypto hardware wallets reached around $315.33 million last year, and the numbers are expected to grow significantly as investors and newbies to the digital money sphere become more interested in the sector. Despite last year’s market struggles and downfalls, people have kept their hopes high and continued looking for the best way to buy Bitcoin to add it to their portfolios. The motives behind such undertakings vary. They can include getting the leading cryptocurrency to make different payments in companies accepting this method, keeping it long-term, gifting it, trading it, and other endeavors.
After entering the year humbly, the crypto market is now seeing bullish momentum. The flagship cryptocurrency has already gained 80%, and its contenders have been on an upward trajectory as well, given the cooling inflation data and increased clarity regarding the macroeconomic situations worldwide, especially in important markets like the UK and the US. As such, investing in Bitcoin or other cryptocurrencies makes more sense now for investors and beginners who missed the opportunity to get them when prices were at their lowest. The acquired assets are then sent and stored on hardware wallets, commonly considered safer and a better choice than software ones.
The truth is that they are only a partially safe and risk-free method of storing cryptocurrency, as each one comes with challenges and risks. But generally, hardware wallets are preferred despite their cumbersomeness of use because they’re resistant to cyber-attacks and hacking due to their offline storage feature.
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What cryptocurrency users find in hardware wallets
There are a few questions that arise whenever the topic of cryptocurrency is debated, among which the acquirement method and storage type are the most popular. There are several advantages that cryptocurrency owners gain by using a hardware wallet to keep their assets safe and manage them accordingly, including the following:
- Hardware wallets are compatible with numerous digital currencies and can function with more blockchains simultaneously, improving their versatility. The top picks in hardware wallets are connectable with other wallets, like Phantom or MetaMask, facilitating interactions with NFT platforms and decentralized finance applications.
- Hardware wallets are also seen as the more secure option, given the additional layer of security that offline storage provides for the seed phrases and private keys. The most popular ones employ extra security features, such as biometric authentication or a PIN, making it a critical factor in deciding which to go with. These two features give users peace of mind, knowing their assets and information are completely protected. Even if the wallet was stolen and the stealer was to try to access purchases through the recovery key of another device, the funds couldn’t be recovered.
- The hardware device is designed to work offline, which can significantly reduce the online threats common with software wallets.
Hardware wallets provide multiple recovery options
Forgetting or losing is human, and it’s possible to experience such unpleasant mishaps with important information and data regardless of how secure the storage method is. For safety reasons, having more recovery options to recuperate passwords is a godsend. If you lose or destroy the device where you use your hardware wallet or if it is stolen, your likelihood of regaining the private keys and cryptocurrencies isn’t harmed. Most wallets generally have 24 words generated randomly to create a one-of-a-kind recovery key, meaning that regardless of what happens to the device, the assets stay untouched and can be regained with the unique key used on a new device.
There are also drawbacks to hardware wallets
While hardware wallets have many advantages, they also bring about potential cons. These include but are not limited to the following:
- User-friendliness is the factor everyone seeks when using a technological product, and it’s even more accurate in the case of digital wallets. Such a feature enables customers to learn and manage to easily use a product, discover its ins and outs, and overcome challenges as they arrive. Even though hardware wallets are intuitive to be used and installed, they’re not as user-friendly as software options. Their lower convenience is also seen in transactions. To send or receive crypto, the device must be physically introduced in the smartphone or computer, which can leave one fuming when numerous transactions are waiting to be conducted.
- On the other hand, software wallets are more convenient, cheaper, and easy to use. However, if you use a software option, check if the chosen one is compatible with more blockchains. Some software wallets can work with a limited number of blockchains, and even though they can still store non-fungible tokens and cryptocurrencies, they aren’t always compatible with every network of those holdings. As such, if you’re dealing with more than one blockchain, you may need to use more software storage options, which can be time-consuming.
- The better part of hardware wallets has recovery options and backup. However, compared to software wallets, they lag behind. There may be situations when the options provided could be more effective. For instance, when both the backup seed phrase and the wallet are lost, recovering the funds may be more complicated, if not impossible.
Last words
Hardware wallets may not be the most fantastic alternative for every user, despite being a reliable and safe way to store and manage cryptocurrency holdings. Consider the cons and pros of each type of wallet before deciding which one will hold your assets.
Also, avoid using second-hand wallets. While second-hand products are generally reliable, cryptocurrency storage methods are not the case because used ones can be tampered with, leading to losing their cryptocurrencies. Indeed, saving money on a purchase can be appealing, but it may cost you money at a future moment. So, make sure you’re always prioritizing the security of your holdings and treat this activity very seriously.
