- Hardware wallets, such as Ledger and Trezor, have a lifespan of approximately 10 to 30 years
- The lifespan of software wallets depends on the duration of software support
- Cold wallets, like hardware and paper wallets, offer enhanced security due to offline storage
How Long Does a Crypto Wallet Last?
Hardware crypto wallets are flash drives, so they will have a similar lifespan of about 10 to 30 years.
Software wallets are purely software-based, so their lifespan will depend on how long their software will be supported.
This could go from just a few years up to a lifetime. The lifespan of a crypto wallet depends on several factors, such as the type of wallet you choose, the amount of crypto you store, and the way you store your private keys.
There are two types of crypto wallets, namely hot wallets and cold wallets. Hot wallets are online wallets that connect to the internet, while cold wallets are offline wallets used for storing large amounts of cryptocurrency.
The lifespan of a hot wallet is theoretically longer compared to that of a cold wallet, which will be compared in the next chapter. Cryptocurrency wallets are also categorized into software wallets, hardware wallets, and paper wallets.
Software wallets are mainly provided by crypto exchanges like Coinbase, Kraken or Binance and store your keys online. These are also categorized as online wallets. Hardware wallets like Ledger and Trezor wallets store your keys offline.
They are called cold wallets. Paper wallets are also cold wallets, but they are also physical wallets that store your private keys on a piece of paper. While hardware wallets are safe from a hack, paper wallets are prone to damage and theft.
If you are holding small amounts of cryptocurrency, you can use a hot wallet like the wallet app on your phone or a custodial wallet like Coinbase. However, if you are holding large amounts of cryptocurrency, it is advisable to use a cold wallet for secure storage.
The best way to store your crypto is by using a cold wallet or a non-custodial wallet, which stores your private keys offline. It is also recommended to store your recovery phrase or seed phrase safely and separated from your wallet.
Hot and Cold Wallets Explained: Which Lasts Longer?
Even if hardware wallets are the safer option to store crypto, hot wallets can last longer.
This is because if we just look at the lifespan, then hardware devices will stop working at some point.
Hot wallets, or online wallets, will work as long as the company providing them will survive. This could be everything between just a few years up to an entire lifetime. This makes it hard to make a precise estimation.
A more complex answer is that it depends also on your usage and the amount of crypto you hold. Hot wallets are more vulnerable to hacking and cyber attacks since they are connected to the internet.
This could be taken into consideration for the longevity of a wallet. If a wallet is hacked, we could count that as malfunction. If you frequently move your crypto or need to access it quickly, a hot wallet might be a better option for you.
This is one of the major reasons you should use software wallets. However, if you hold a large amount of crypto for a long time, a cold wallet would be a more secure way to store it.
Cold wallets, such as hardware wallets or paper wallets, are known for their top security since keys are stored offline. They are not connected to the internet and are therefore less susceptible to hacking.
Paper wallets are a physical piece of paper that contains your public address and private key. They are the most secure way to store your crypto, but they require careful handling to avoid damage or loss.
Hardware wallets are another option for cold storage and are more durable than paper wallets. They are more expensive than paper wallets, but they offer convenience and can be easily connected to the internet when needed.
Overall, we can state that the more convenience you want to have, the less secure the wallet type will be.
Where Should You Store Cryptocurrency Like Bitcoin Long-Term?
If you plan to store your keys or your crypto long term, consider hardware wallets.
Even if software wallets might have a greater life span because there are no hardware altering issues, the risk is too high that they will eventually get hacked.
Imagine you store a huge amount of money in crypto over decades. Will the provider still be there? Eventually he will get hacked or the authorities will block the access because of insolvency. There are many risks to consider for long-term storage.
Hardware wallets are physically in your possession and you store it in a secure place you choose. This is a more suitable scenario for long-term storage.
Here, of course, you could get the risk of moving to another location and losing the device or you forget where you stored it or other things that could happen in life.
But in such a case you have always the possibility to recover your funds in a new wallet by providing your seed phrase. This leads us to the next point, the seed phrase. Storing your seed phrase is the most important aspect to be aware of.
This is much more important than the actual wallet. If you lose or break your wallet, you can easily recover it by buying a new one and providing your seed phrase. From this phrase, you can always recover your wallets.
This works because your wallet doesn’t store the crypto but just the access to it, your private keys. Cryptocurrency is technically data stored in the blockchain, not in your wallet. With the private keys in your wallet, you are able to prove that you are the owner.
Aside from hardware wallets, you can also use paper wallets to store crypto long-term. The advantage here is that you don’t need hardware devices and are not dependent on creating them. You store the information just on paper.
This is the most secure option in terms of data, but the riskiest option in terms of durability and materials. Paper can be easily destroyed and you need to know how to use them. This is the DIY solution without someone helping you.
Therefore, it’s also recommended to store your seed phrase on durable material like engraving it in metal. This will increase chances that you won’t get a problem in the future accessing this data.
What is The Best Crypto Storage: Custodial Wallets or Non-Custodial Wallets?
Non-Custodial Wallets are always the way to go if you want to have the best and most secure storage with full control.
Besides hot and cold wallets, or software and hardware wallets, there are two other categories of wallets: namely ‘custodial’ and ‘non-custodial’ ones.
A custodial wallet is a type of wallet that allows a third party to hold your cryptocurrency and your private keys. A non-custodial wallet is a wallet that allows you to store your private keys by yourself and access it without a third party.
If you’re new to the crypto market, you might think that custodial wallets are safer because they have a central authority to monitor the transactions and keep your wallet safe.
However, custodial wallets usually charge fees and give you limited access to your crypto. If the wallet is lost or hacked, you might lose all your crypto.
Custodial wallets are less secure because they are connected to and stored on the internet. Non-custodial hardware wallets are safer because they are not connected to the internet. What should be noted is that third parties are not always bad.
They can also give you safety in scenarios like losing a password or similar information. In such cases, the provider can help you out and maybe fix this issue. If you handle it all yourself, no one will help you if you have problems, you are fully responsible.
Hardware wallets work as non-custodial wallets, storing your crypto offline and requires a physical device to access your wallet and funds. Even if hardware wallets are non-custodial, there are also software wallets without custody.
The most popular one is the Bitcoin Core client, which not only gives you full control, it also works as a full node, giving you full access to the blockchain.
Other software-based wallets are provided by third parties and include web-based crypto wallets or mobile wallet apps. Considering all these factors it’s recommended to use a non-custodial wallet that’s more secure and gives you full control over your crypto.
When looking for a long-term wallet, make sure that the wallet is non-custodial, supports the cryptocurrencies you want to store, and has a user-friendly interface. If you need to transfer crypto regularly in smaller amounts a software wallet will be a better choice.
Even if hardware wallets are more secure, software wallets are also secure. Providers apply different kinds of security measures to satisfy you as their user.
A combination of both types of wallets would be the optimal solution, hardware for long-term storage, software for everyday transfers.
Can Hardware Wallets be Hacked?
Hardware wallets are one of the safest ways to store cryptocurrencies like Bitcoin.
They are secure, but they also could be hacked.
These wallets store your private keys offline on a physical device, making them less susceptible to hacks compared to online wallets or exchanges. But they can be prone to other kinds of hacks or scams.
- Supply chain attacks:
Hardware wallets can be hacked before they even reach the user. Attackers can infiltrate the supply chain and change the hardware or firmware to include a backdoor or other malicious code.
Therefore, it is always recommended to buy hardware from the original manufacturer.
- Physical attacks:
If an attacker has physical access to a hardware wallet, they may extract sensitive information from it.
This could include using specialized equipment to read the contents of the device’s memory or physically altering the device to add a backdoor.
- Malicious firmware updates:
If a hardware wallet allows for firmware updates, an attacker might compromise the update process to install malicious firmware. Once installed, the firmware could allow the attacker to steal your private keys.
- Social engineering:
Attackers could use social engineering techniques to trick users into revealing their hardware wallet’s PIN or recovery phrase.
For example, an attacker might create a fake website or app that looks like real hardware wallet software and trick users into entering their sensitive information.
Most of these scenarios can be prevented if you are careful with your data. Overall, hardware wallets are considered to be highly secure, but you should still take precautions to protect your private keys and be aware of potential attack vectors.
It’s important to only buy hardware wallets from trusted sources and to follow the manufacturer’s instructions for keeping the device secure. Also try to store them in safe places so they won’t get stolen or you lose it accidentally.
Can You Lose Crypto in a Wallet?
Yes, it is possible to lose crypto in a wallet.
There are several ways this can happen.
One way is if the wallet is hacked, and the attacker can steal the crypto. Another way is if you forget your password or recovery phrase, which is needed to access the wallet. If this happens, the crypto stored in the wallet will be inaccessible and essentially lost.
If you accidentally send crypto to the wrong wallet address, and the owner of that address is not trustworthy, the crypto will also be lost. You could even send your funds accidentally to a mistyped address, which, however, could be a valid address.
This would also cause your crypto to be lost forever. Backing up passwords and recovery phrases securely, and double-checking all transactions before sending are your most important precautions to make.
Does Your Money Still Grow in a Crypto Wallet?
As long as the value of crypto is increasing, so will your crypto, no matter where you store it.
Your money doesn’t grow in a crypto wallet just by holding it.
Cryptocurrency is a volatile asset, and its value can fluctuate significantly in a short amount of time. This will depend rather on the market instead of your storage solution. However, holding your cryptocurrency in a wallet can provide other benefits.
For instance, some wallets allow you to earn interest in your holdings by participating in staking or lending programs.
What Are the Dangers of Crypto Wallets?
One of the major dangers of crypto wallets is the risk of being hacked.
If someone gains access to your wallet’s private key, they can steal your cryptocurrency.
Another danger is losing access to your wallet if you forget your password or lose your recovery phrase. Some wallets are not legitimate and may steal your cryptocurrency. It’s important to do research and only use trusted wallet providers.
Finally, there is the risk of human error, such as sending cryptocurrency to the wrong address, which can cause permanent loss of funds. It’s important to take precautions and be aware of the risks involved in holding and using cryptocurrency wallets.
Conclusion: How Long Does a Crypto Wallet Last
How long crypto wallets last will depend on the type of wallet you choose, but we can state the lifespan from about 10 to 30 years.
The lifespan of software wallets will depend on how long they will be supported and hardware wallets will depend on how long the inbuilt chips will function.
Cryptocurrencies like Bitcoin have become an increasingly popular investment, and it’s important to store them safely to protect your investment.
You can choose between different ways to store your crypto, including online wallets, hardware wallets, and cold storage, each with their pros and cons. It will depend on your preference and the amount of crypto assets you hold.
It’s essential to weigh the risks and benefits and choose the most suitable option to hold your coins securely. Inform yourself diligently and you will make your best decision.