While all well-engineered non-custodial wallets are considered secure, hardware wallets are generally regarded as the most secure type of wallet.
Two key aspects contribute to their higher security scores:
Cold Storage Nature:
Hardware wallets, often referred to as cold storage wallets, lack internet connectivity, enhancing security. The inability to connect to the internet reduces potential vulnerabilities.
Simplified Software Environment
Unlike mobile and desktop wallets, hardware wallets run specialized software designed for specific tasks. In contrast, mobile and desktop wallets operate in more complex environments with various components, including the operating system. This complexity increases the potential attack surface.
While hardware wallets excel in private key storage security, non-custodial mobile wallets, such as Panaroma Decentralized Wallet, have advantages in other aspects:
Privacy Considerations:
Mobile non-custodial wallets may offer more privacy compared to hardware wallets. The purchase, delivery, and setup of hardware wallets carry privacy and security risks. Incidents, like the one involving Ledger, exposed customer information, including names, phone numbers, and addresses.
Usability and Accessibility:
Hardware wallets come with layers of complexity and limitations, making them challenging for users not well-acquainted with cryptocurrency. New users may find them overwhelming and lacking in usability features. On the other hand, mobile-based wallets like Panaroma Decentralized are designed for ease of use and quick access.
Frequent Access and Everyday Use:
Hardware wallets are not optimized for frequent access. Non-custodial wallets meant for regular use, such as in DeFi scenarios, may find hardware wallets inconvenient for everyday transactions. Mobile wallets, like Panaroma Decentralized Wallet, are tailored for such use cases, providing easy accessibility.
In summary, most non-custodial wallets offer good security, with open-source code and external audits. These wallets strike a balance between security and usability, making them suitable for regular use cases.