Hard Wallet

A hard wallet is a physical device that connects to a computer via USB and runs a software application within a Dashboard..

Hard wallets are non-custodial by default – you manage your private keys via a Seed. They provide the best security because most of the time they are offline, so cannot be hacked.

If a hard wallet is lost or damaged, it doesn’t matter as remember, no funds are actually stored in a crypto wallet, it is just a way of accessing them. So long as you keep your Seed safe you can restore access with a new hard wallet.

Hard Wallets are by default offline, so are also described as cold wallets.

Paper Wallet

The simplest form of crypto wallet, and the one that really boils down storage of crypto to the bare bones is a paper wallet. A Paper Wallet is literally a piece of paper which includes your Public Key and the associated QR code, and the same for the Private Key.

Though this can be hard to wrap your head around, a Paper Wallet should actually help to underline that cryptocurrency is virtual. It simply grants you control in the most basic form. 

Scan the QR code of the Public Key via a Soft Wallet on your phone and see the balance and any transaction history.

Scan the QR code of the Private Key via a Soft Wallet on your phone and control over the funds are yours.

Paper wallets are permanently offline so are the ultimate cold wallet but are a very low-tech approach to storing funds. They need to be properly protected from loss/damage – such as lamination – with adequate copies. They simply offer storage, in order to send/receive or monitor value, you’ll need one of the wallet options.

Though Paper Wallets are the ultimate cold wallet, you still need the internet to create them and a recent scam with a major paper wallet provider highlights that danger.