Bitcoin hardware wallets are more secure than the software ones. This is in line with common wisdom among the security experts of the cryptocurrencies. So, 10 out of 10 experts recommend that large sums of crypto should be stored in the hardware wallets (cold wallets). And the online ones should be kept only with a small amount for expenses. But is it really?
An article published by Edge, one of the crypto online wallets (software) most respected in the market, tries to undo this false dichotomy. In order to be based on sound arguments, the company released an ascending order ranking with the greatest threats to the loss of cryptocurrencies.
- Users’ error
- Social Engineering (phishing, SIM port, etc)
- Risk of custodial agents
- Physical Attack
hardware wallets are safer than software ones regarding malwares
In fact, bitcoin hardware wallets are much safer than the software ones in terms of protection against malwares. Nevertheless, according to the ranking made by the company, this is only the fourth reason of threat. According to Edge, after five years of experience, the likelihood of such kind of attack is lower than the first three items in the list.
Even so, the company recognizes that the attacks happen. However, it explains that you cannot put the software digital wallets (hot wallets) in the same basket. Wallets that work on desktops are more sensitive to risks, as any installed application has access to almost the entire PC. However in cell phones this does not happen because the apps are downloaded in their respective stores where they are checked in advance.
In addition to the malware checks, mobile devices have security tools like sandbox. In this way, they help keeping the equipment free of malwares. Even if the user downloads a malware, the operating system will be able to isolate it and separate the malicious program from the rest of the system. Besides, there is more malwares designed for PCs than for mobile devices.
According to a survey conducted in 2015 by the security firm Damballa, only 0.0064% of the mobile devices in the United States were infected with malware.
Software and hardware wallets match in the other criteria
The hardware wallets have protection against loss, but in this case, the software ones also have it, with the use of a set of words. And what about social engineering? According to the article, the cold wallets protect as much as the software wallets. This sort of attack does not depend on software or hardware, but yet a user being led to inform their private keys. In terms of risk of custodial agent, explains the article, the protection is also the same for both.
In other words, based on the three greatest threats to asset losses, the
hardware wallets are no better than the software ones. The same applies in case of a physical attack.
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