Hardware wallets just allow you to keep your keys offline. Software wallets can be safe too especially if you keep it offline most of the time or create a multisig.
If your phone is compromised and someone can see what you are typing, you just lost all your money with a software wallet.
If your computer is compromised and someone can see what you are typing, you still have your money because your private seed stayed on the hardware and was never on your computer.
A rough way to think of it is software wallets interact with the blockchain while hardware wallets interact with your keys. Hardware wallets are sometimes called ‘signing devices’ to better differentiate them from software wallets.
> Whilst anyone may inspect the source code of free and open source software for malicious flaws, most software is distributed pre-compiled with no method to confirm whether they correspond.
> This incentivises attacks on developers who release software, not only via traditional exploitation, but also in the forms of political influence, blackmail or even threats of violence.
For software (unlike firmware) it is not just the wallet that must be reproducible-build compliant but the entire operating system.
For example, Electrum wallet running on Linux Debian 11 is indeed reproducible-build compliant, turtles all the way down.
The firmware of quite a few hardware wallets is also reproducible-build compliant.
If you have any doubt about the firmware or software’s reproducible-build compliance, check the reports by independent external auditors such as:
Furthermore, you can dramatically improve the security of your coins by using a cold-storage configuration that physically prevents the secrets from ever traveling on the internet. In my opinion, the best solution for that is by using QR codes when cold-signing transactions.
A hardware wallet and a software wallet are two different things. You could see a hardware wallet as an addition to a software wallet, ie you use electrum (software) in combination with a ledger/trezor/coldcard (hardware). This is the safest way.
Cold computer + Electrum offline signing would give you everything a hardware wallet gives you + HD deterministic seed functionality, and it would not make you an easy target for extortionists (particularly state sponsored ones at border checkpoints).
All things considered, I would choose the later over the former.
Much harder to hack and steal keys.
Hardware wallets just allow you to keep your keys offline. Software wallets can be safe too especially if you keep it offline most of the time or create a multisig.
In a Hardware wallet your keys are “safe” because they are offline. Software wallets are more vulnerable to virus.
If your phone is compromised and someone can see what you are typing, you just lost all your money with a software wallet.
If your computer is compromised and someone can see what you are typing, you still have your money because your private seed stayed on the hardware and was never on your computer.
Hardware wallet has a SecureElement chip for key storage.
Other than that, a computer is a computer is a computer.
You should have both. Hodl on the cold wallet and spend on the hot one
electrum is a software wallet not a hardware one.
Can the cold wallet be corrupted if it is passed through x-ray screens at airports
A rough way to think of it is software wallets interact with the blockchain while hardware wallets interact with your keys. Hardware wallets are sometimes called ‘signing devices’ to better differentiate them from software wallets.
What matters most, is that the firmware or software is reproducible-build compliant:
> https://reproducible-builds.org
> Why does it matter?
> Whilst anyone may inspect the source code of free and open source software for malicious flaws, most software is distributed pre-compiled with no method to confirm whether they correspond.
> This incentivises attacks on developers who release software, not only via traditional exploitation, but also in the forms of political influence, blackmail or even threats of violence.
For software (unlike firmware) it is not just the wallet that must be reproducible-build compliant but the entire operating system.
For example, Electrum wallet running on Linux Debian 11 is indeed reproducible-build compliant, turtles all the way down.
The firmware of quite a few hardware wallets is also reproducible-build compliant.
If you have any doubt about the firmware or software’s reproducible-build compliance, check the reports by independent external auditors such as:
> https://walletscrutiny.com
Furthermore, you can dramatically improve the security of your coins by using a cold-storage configuration that physically prevents the secrets from ever traveling on the internet. In my opinion, the best solution for that is by using QR codes when cold-signing transactions.
A hardware wallet and a software wallet are two different things. You could see a hardware wallet as an addition to a software wallet, ie you use electrum (software) in combination with a ledger/trezor/coldcard (hardware). This is the safest way.
Consideration: Hardware wallet blacklisting, targeting.
Hardware wallets could end up being a liability.
Cold computer + Electrum offline signing would give you everything a hardware wallet gives you + HD deterministic seed functionality, and it would not make you an easy target for extortionists (particularly state sponsored ones at border checkpoints).
All things considered, I would choose the later over the former.