The distinction between software and hardware wallets

What is the difference between Add Software Wallet and Add Hardware Wallet on the app's home page?

There are two types of wallets: software wallets and wallets established through hardware pairing. The software wallet is an on-chain wallet that is saved on the phone, and the private key is also retained by you. It can be utilized without regard to the hardware. The software wallet does not have any hardware, whereas the physical device does. Both choices exist in parallel and are unrelated to one another.

What is a software wallet?

When we first build a software wallet or back up a wallet, we produce a helper word, which is a sequence of English words that forms the seed, which then creates all of the private keys. The sequence of words also serves as a wallet backup that can be restored.

A software wallet has the advantage of only requiring the master public key to generate any number of child public keys. That is, without the use of the private key, new addresses can be produced using the master public key.

What is a hardware wallet?

A hardware device is an electronic device that generates and stores a private key using a secure chip. Because the private key is the only proof of asset ownership in the realm of crypto digital assets, private key security is the primary concern of crypto digital asset owners.

The private key is stored in a secure chip that is totally separated from the network by the hardware device. The private key will not be exposed to network hackers if it is stored this way, dramatically lowering the risk of private key leakage and theft.

Hardware wallets provide the following advantages over software wallets:

  • The private key is generated and stored using a secure chip.
  • Hackers can't access private keys because they're isolated from the network.
  • A physical button and a display panel for transaction data
  • All transactions are signed through the hardware device, and the program has no access to the private key.
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