In the Web3 world, self-custodial digital asset management is becoming mainstream, but what costs and risks do you incur if you don't use a hardware wallet? In this article, we will look at the specific costs and implications of a Web3 life without a hardware wallet.
- Increased transaction fees
In Web3 transactions, transactions occur frequently. For example, DeFi (decentralized finance), buying and selling NFTs , staking, asset transfers on bridges, etc. are done daily. If you do not use a hardware wallet, many users use software wallets or browser wallets, but you need to be careful about ** gas fees (fees) ** .
Hardware wallets often provide efficient signing and have the ability to optimize gas costs for transactions. On the other hand, software wallets can make transaction confirmation more complicated, which can result in more wasted gas fees . Gas fees can be particularly high on networks like Ethereum, and these costs can add up and result in unexpected expenses.
- The hidden costs of security risks
One of the biggest reasons to use a hardware wallet is to ensure high security . In Web3 asset management, protection of private keys is important. Software wallets and browser wallets are constantly connected to the Internet, which increases the risk of hacking .
In fact, if you do not use a hardware wallet, the risk of encountering phishing scams and malware increases significantly, which in the worst case scenario could lead to the total loss of your assets . If your assets are lost due to a hack, the loss could range from hundreds to thousands of dollars, or even more. Such risks increase in proportion to the amount of cryptocurrency you hold, so they are an important factor to estimate as a security cost .
- Time Cost
If you do not use a hardware wallet, the process of transaction approval and security management becomes more complicated and time-consuming . For example, frequent login requests and multi-step authentication processes can reduce work efficiency. In addition, as a security measure, you must always keep your wallet up to date, and the time required for maintenance cannot be overlooked.
Using a hardware wallet often simplifies this administrative process, resulting in greater efficiency and time savings .
- Cost-saving alternatives
While not using a hardware wallet can temporarily save you money on initial costs, in the long run you need to take steps to optimize and secure your transactions. It is important to consider alternatives such as:
- Multisig wallets : Allows for additional security by requiring transactions to require multiple signatures, but may require additional work to set up and operate.
- Decentralized private key management services : To avoid self-custody and increase security, you could consider using a decentralized service, but this may also incur fees and charges.
- Cost-effectiveness of hardware wallet implementation
Finally, let's talk about the cost of installing a hardware wallet. Hardware wallets can generally be purchased for around $ 100 to $ 200 . This may seem like a high initial cost, but considering the long-term security enhancements, savings on gas fees through transaction optimization, and avoidance of the risk of losing assets, it is very cost-effective .
For example, if you have $ 1,000 worth of crypto assets, $ 200 to protect them with a hardware wallet is a well-worth investment in security insurance, and if you have thousands or tens of thousands of dollars in assets, the cost of protection becomes even more justified.
A Web3 lifestyle without a hardware wallet will entail increased transaction fees , potential costs due to security risks , and time costs . Although it may seem like a short-term cost-saving option, from the perspective of long-term asset protection, adopting a hardware wallet is the most cost-effective option.
To realize a safe and efficient Web3 life, we recommend that you consider asset management that takes into account enhanced security and cost-effectiveness.