Which best for long term investment? Hardware wallet or Software wallet .

[Bitcoin_people]

As a new investor I am very curious to know in which wallet my bitcoins will be safe. I am holding on to some bitcoins I bought earlier. and I was interested in buying more bitcoins later today I bought some bitcoins again with some of my money. I bought 0.0068 bitcoins from Binance exchange long ago and held them. and today again bought 0.00559 bitcoins from Xt exchange. I currently have all the money I have invested in Bitcoin. I believe that investing in Bitcoin will bring me profits in the future. Right now I have bitcoins (BTC0.0068+0.00559)=0.01239. I think if I hold Bitcoin for long term I will definitely be able to make good profit. Because I believe Bitcoin will reach $100k.  And then my wallet balance will show (0.01239×$100000)=$1239 I hope. But I don't feel very comfortable keeping my money in exchange. So I want advice from seniors whether hardware wallet is better or software wallet. But if I want to buy a hardware wallet I will need money.
but right now I don't have any money to buy hardware. So I suggest using a software wallet.  However, I have no idea which wallet to use will provide the most security. So tell me a bit about what is a strong and security complete wallet?

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[Maus0728]

I think it would be best if you made sure that the device you are going to use is malware free before installing any wallet. I mean that's a no brainer for someone who wants to store bitcoin for long term.

Afterwhich, you can install electrum[1] for desktop because simply because it's lightweight, open-source and have many features that a bitcoin wallet must have (e.g., coin control, multisig, lightning network). Plus, it is beginner friendly. Just make sure to verify the signature[2] before installing the wallet on your machine to avoid installing malicious fake electrum wallet.

[1] https://electrum.org/#download
[2] https://bitcointalk.org/index.php?topic=5240594.0

[mk4]

I mean, think about it — why would people spend money on a hardware wallet if a software wallet is more secure? Obviously hardware wallets are better for 99% of people.

But don't take the word from me, go do some reading and learn for yourself.

https://cryptosec.info/wallets
https://bitcointalk.org/index.php?topic=1631151.0

[Charles-Tim]

So tell me a bit about what is a strong and security complete wallet?

If you do not have money to buy a hardware wallet, you can go for wallet on airgapped device or the cheapest but still one of the safest wallet which is paper wallet, all you need is to write down your bitcoin address somewhere that would be used anytime you want to send bitcoin to the address if not using watch-only wallet with it. It is most important to backup your seed phrase. I will advice you to use electrum cold storage. You do not necessarily need watch-only wallet for it but you can have it to watch over your wallet using a device. After you set up a paper wallet on the cold storage device, you can delete it which makes it a paper wallet, or you can leave it on a cold storage device if you can spare your device for it and use it as airgapped walllet. Which means you can go for paper wallet or wallet on airgapped device.

Airgapped devices are devices that their WiFi and Bluetooth components are removed from just computer with newly reinstalled OS, making use of the device at the time for wallet creation, making sure it has no connection to the internet.

[hugeblack]

Buying a hardware wallet does not mean that you are safe unless your level of awareness increases. without awareness and realizationThe best device will not protect your currencies. Therefore, as long as the amount of 0.01239 BTC is too much for you, spending $60 to buy a hardware wallet is not a big loss.
But if you spend more time to learn, you can create cold stoarge for less than $10 and it will be relatively safe.
These are some links to learn and then create a topic about it and we will help you^[1][2][3]. Again awareness = safety.

[1] https://electrum.readthedocs.io/en/latest/coldstorage.html
[2] https://electrum.readthedocs.io/en/latest/tails.html
[3] https://github.com/sovereignhodler/tails-cold-storage

[BlackHatCoiner]

They say the opponent of security is complexity. If you're not technically competent, I suggest you buy a peer-reviewed hardware wallet like Trezor, and sleep easy. If you think you're competent enough with software and OSes, and you have a computer spared, make it an airgapped device:

Steps to configure an air-gapped Bitcoin wallet only device.

• Close your curtains.
• Download Tails (a privacy and security focused Linux distro)
• Verify the binaries <- Important step, you need to ensure the integrity of the OS. Do it on a clean environment.
• Burn the OS image to a USB.
• Take the device and physically remove any Wi-Fi antennas (and obviously, Ethernet cables if any).
• Plug the USB to that device, and start up.

You can see that Electrum comes pre-installed. The device will not connect in any network. It's also recommended to encrypt the electrum part of the USB (as shown in the Tails start screen), in case someone gains access to the USB.

[dimonstration]

Hardware wallet is the best because it will save to a lot of security risk online that you can get when using software wallet. Hardware wallet is the best wallet for long term investment mainly if you don’t touch often times your holdings. You just need to protect its recovery seed phrase and you are good to go.

However, Software wallet like Electrum is safe too if you knew already the basic security against hacker. I’m using electrum wallet for 5 years and store above 1BTC on it without a problem because I’m always making sure that my computer and mobile phone is not infected by a malware.

[m2017]

~snip

I think that mathematical calculations (rough) will help answer your question.
Your 0.01239BTC is now worth about $280. If you buy a hardware wallet, you will have to spend about $80-100. The question arises, is it worth spending a third of the amount just to keep it safe? It seems to me that it would be better if at this stage we limit ourselves to the software wallet. Just take care to make this wallet secure by taking all necessary precautions.
But if you plan to gradually increase the deposit, then you can think about the hardware wallet. Also, the argument in this favor will be that your 0.01239BTC at a rate of $100k will be $1200. Then the game may be worth the candle.

[Welsh]

Theoretically speaking, a hardware wallet has more attack vectors than a software wallet, however that entirely depends on how you intend to use it. Personally, I believe a private key generated on a secure offline computer is the gold standard. Whereas, a hardware wallet is more suited to those that need to access their Bitcoin regularly, and don't want to think too much about security issues that could arise from that.

However, I'd probably be much more confident hiding my seed than my hardware wallet, since physical access to anything generally allows more sophisticated, and out of the box thinking attacks, I usually consider physical access possible to be compromised despite no documented attacks.

A seed can be reasonably secured, and potentially be as complex as you need it to be.

[dkbit98]

I don't have any money to buy hardware. So I suggest using a software wallet.  However, I have no idea which wallet to use will provide the most security. So tell me a bit about what is a strong and security complete wallet?

If you have money to buy smartphone than I don't understand how you can't have much less money for purchasing hardware wallet.
Software wallets can never be safer than good hardware wallets, except if you are using them correctly on airgapped laptop, that is very unlikely for people who don't have money.

Theoretically speaking, a hardware wallet has more attack vectors than a software wallet, however that entirely depends on how you intend to use it.

What?!  
No, hardware wallets don't have more attack vectors, because their only purpose is to work with cryptocurrency transactions.
Software wallets are installed on multi-purpose devices like computers or smartphones that by definition have multiple time more attacks vectors than hardware wallets.
Not to mention all the risk with malware, viruses, keyloggers, internet connection, and bunch of other issues that don't exist on good hardware wallets.

[Welsh]

What?!  
No, hardware wallets don't have more attack vectors, because their only purpose is to work with cryptocurrency transactions.
Software wallets are installed on multi-purpose devices like computers or smartphones that by definition have multiple time more attacks vectors than hardware wallets.
Not to mention all the risk with malware, viruses, keyloggers, internet connection, and bunch of other issues that don't exist on good hardware wallets.

Hardware wallets have been known to have physical vulnerabilities, and someone might be more inclined to leave them lying around unsecured. A software wallet, you technically only need to save the seed, and generally you'll be warned to secure that pretty well. I'm not talking about a software wallet connected to the internet, I'm talking from the point of view where you want to generate an address, and just receive Bitcoin to that address. Since, with a hardware wallet you have to purchase it from a vendor, hopefully the original manufacturer, there's a element of risk of third party vendor having physical access to the device, and therefore altering the hardware wallet, with a wallet that you download, verify, and then keep in a offline environment you don't have these risks.

Hence, why I went on, and said about being more confident in securing a seed than a hardware wallet. Although, I could've probably been a little more clear in that. So, if I wanted to just generate a seed, and basically have a offline wallet, I'd probably not even need the offline wallet, copy the addresses, save the seed, and focus on securing that seed. Even, if you are going to be keeping the wallet offline, as long as its secure in the first place, it's no less secure than a hardware wallet technically. However, when regular access is needed, and therefore becomes a online wallet, a hardware wallet makes sense due to the reasons you mentioned.

However, for private key generation or a offline wallet, a hardware wallet is definitely more expensive, and potentially overkill if it's going to remain a offline wallet. If you intend to use it regularly, and therefore online then yeah I'd absolutely agree that software wallets then have more attack vectors.

It seems like the OP was talking about holding Bitcoin, hence the reason I believe a offline wallet should be fine, and technically could potentially have less chance of being compromised in a physical attack, since there's various ways of securing it, whereas a lot of people tend to think hardware wallets are invulnerable even physically, and buy them from third party vendors quite often.

The key thing is; if you want a offline wallet, that you are holding Bitcoin on; offline wallet generated via verified software. If you want to regularly use it, and therefore online; hardware wallet. The added risk to a hardware wallets depends on how you got it, and how you secure it. Those are the additional risks, with the latter also being true for offline generated wallets.

Worth noting, while the vulnerability was patched, I wouldn't doubt that we'll see similar attacks, but there's also less secure hardware wallets than a Trezor. Trezor are pretty decent hardware wallets compared to some out there.

So, my line of thought was due to third party vendor issues or an attacker gaining physical access it could potentially have more risks. Although, I'll admit I didn't really explain that all too well. However, the chances of someone doing that, and having a zero day exploit? Probably, rather slim. Although, worth mentioning since you can avoid the risk of that by not using it at all. What I will say; for the vast majority of users, a hardware wallet is probably going to be the most secure, especially for new users. Again, I should've probably mentioned that, but thought there was enough users saying that .

theoretically probably wasn't the right word. Needed to be something like if a offline wallet is generated under perfect circumstances, e.g airgap etc, then it technically can be more secure than a hardware wallet if it remains offline, or the seed is backed up, and then the wallet is deleted from the computer. I don't know, a lot of people will think physical tampering of a hardware wallet before it arrives to you, is so incredibly unlikely it probably shouldn't be worried about it too much, especially if it's bought from the official store. However, not everyone has that privilege since they don't always deliver worldwide. One thing for sure, is that is a risk that you don't have with a offline wallet that you generated. However, you still have to keep your seed secure, and obviously your hardware wallet due to physical attacks potentially being an attack vector.

[BlackHatCoiner]

Since, with a hardware wallet you have to purchase it from a vendor, hopefully the original manufacturer, there's a element of risk of third party vendor having physical access to the device, and therefore altering the hardware wallet, with a wallet that you download, verify, and then keep in a offline environment you don't have these risks.

Theoretically speaking, the same risk applies when buying a new computer. There's absolutely no practical manner to verify that it produces provably pseudo-random numbers, and that it hasn't been altered.

I'd say that the serious attack vector you're adding with a hardware wallet is privacy related. You're most likely not having a hardware wallet at your local place, so you're going to buy one from the Internet. So, the merchant has to know your home address, real name and so on. Some of us have experienced data breach with Ledger, and I'm sure lots of thieves would find this information valuable.

[hugeblack]

theoretically probably wasn't the right word. Needed to be something like if a offline wallet is generated under perfect circumstances, e.g airgap etc, then it technically can be more secure than a hardware wallet if it remains offline, or the seed is backed up, and then the wallet is deleted from the computer.

Such things are difficult to judge from black and white logic, it is true that creating an airgapped wallet is cheaper and safer when it comes to physical attacks (the probability of someone stealing a flash memory to hack you is less than stealing a hardware wallet), but you need a degree of experience to do it properly.
Also, this example applies only to Bitcoin, but if you want to store some altcoins then hardware wallets will be the first choice.

[Wind_FURY]

OP, it's always more secure to own a Hardware Wallet, but for how much coins you currently own, just keep saving and buying Bitcoin until you can comfortably spend for a Hardware Wallet. Plus you can always use an old computer for cold storage, and that would be as safe/secure as a Hardware Wallet.

 

[Welsh]

Theoretically speaking, the same risk applies when buying a new computer. There's absolutely no practical manner to verify that it produces provably pseudo-random numbers, and that it hasn't been altered.

I'd say that the serious attack vector you're adding with a hardware wallet is privacy related. You're most likely not having a hardware wallet at your local place, so you're going to buy one from the Internet. So, the merchant has to know your home address, real name and so on. Some of us have experienced data breach with Ledger, and I'm sure lots of thieves would find this information valuable.

That's true, I did consider adding that to my explanation. There's been arguments about Intel, and AMD having various things in the past. For example, the ME engine, and AMD's equivalent. So, yeah this is probably a risk also.

There's ways around the privacy issues with hardware wallets, but yeah most people won't have those provisions in place, and will be giving their home address. I do believe a lot of places these days refuse to send to PO boxes too, which obviously restricts what you can do to try, and keep your privacy intact.

(the probability of someone stealing a flash memory to hack you is less than stealing a hardware wallet), but you need a degree of experience to do it properly.

Right, it's a sophisticated attack which isn't likely going to affect most users purchasing a hardware wallet, like I said it's probably something that's so unlikely that a lot of users are willing to ignore.

[aylabadia05]

For long-term investments using a hardware wallet is much safer although some use software.
Using a software wallet to store your long-term assets could be at risk of a virus or something that makes you unable to access it anymore.

I think from the many answers that have been left on this topic, you can judge and conclude what is best to use.
If you still don't have the money to buy a hardware wallet, then save little by little so you can buy one.
In the meantime, use a software wallet first.

[noormcs5]

OP, it's always more secure to own a Hardware Wallet, but for how much coins you currently own, just keep saving and buying Bitcoin until you can comfortably spend for a Hardware Wallet. Plus you can always use an old computer for cold storage, and that would be as safe/secure as a Hardware Wallet.

 

Even though the hardware is the most secure option but sometimes even the software wallet can be used if the funds are now too much. I mean why need cold storage if you can just know how to properly secure your wallet? I am using a desktop wallet and have never been the victim of any hack or something.
You do not download random software, you do not click on the random link, a good anti virus software is installed on your computer, and you do not give your keys to anyone then you are good to go even with the desktop wallet (In case of fewer funds only).

[NotATether]

Probably the question we should be asking is: where is the safest place to buy hardware wallets?

Somewhere where the number of second-hands (which are always risky) are kept to a minimum or not present at all, and where you don't have to give out your personal information when you place an order, and ideally one which lets you buy them in bitcoins. So not (most) manufacturers' websites.

[Wind_FURY]

Probably the question we should be asking is: where is the safest place to buy hardware wallets?

Somewhere where the number of second-hands (which are always risky) are kept to a minimum or not present at all, and where you don't have to give out your personal information when you place an order, and ideally one which lets you buy them in bitcoins. So not (most) manufacturers' websites.

For people who truly want a hardware wallet without giving up real identity, go to the Dark Markets that sell fake I.D. for Bitcoin. Use fake I.D. to open a P.O. Box in your local post office, use the same fake I.D. to buy your hardware wallet from manufacturer's website.

 

OP, it's always more secure to own a Hardware Wallet, but for how much coins you currently own, just keep saving and buying Bitcoin until you can comfortably spend for a Hardware Wallet. Plus you can always use an old computer for cold storage, and that would be as safe/secure as a Hardware Wallet.

 

Even though the hardware is the most secure option but sometimes even the software wallet can be used if the funds are now too much. I mean why need cold storage if you can just know how to properly secure your wallet? I am using a desktop wallet and have never been the victim of any hack or something.

You do not download random software, you do not click on the random link, a good anti virus software is installed on your computer, and you do not give your keys to anyone then you are good to go even with the desktop wallet (In case of fewer funds only).

OK, good for you.

[BlackHatCoiner]

Probably the question we should be asking is: where is the safest place to buy hardware wallets?

The safest place to buy hardware wallets is in some store with physical beingness, preferably somewhere far away from your home. You enter, take the device, pay with cash, give no information of who you are, done. The second safest place is any Internet store using a postal service, so that the merchant don't know your name, phone number etc.