External hard drive or cloud backup: which is better?
The short answer
Both, ideally. The external drive restores fast and costs once, while the cloud survives fire, theft, and ransomware because it is off-site and versioned. If you must pick one, pick cloud. The disasters that destroy your computer tend to destroy the drive in the same drawer.
In detail
The external drive's strengths are speed and economics. Restoring a terabyte over USB takes an hour instead of days, there is no subscription, and tools like File History or Time Machine make it automatic while you work at your desk. Its weakness is geography. It lives next to the computer it protects. Fire, flood, burglary, a power surge, or ransomware that encrypts every connected drive will take out the original and the "backup" in one event. Drives also age silently. An unpowered disk in a drawer is not a guarantee, it is a probability.
Cloud backup inverts the trade. The first upload is slow and there is a yearly fee, but your data sits in a professional data center in another city, with version history that lets you roll back to before the ransomware hit, the failure mode local drives handle worst.
The combined setup is the textbook 3-2-1 rule and costs less than people expect. A $60 external drive for fast local restores plus Backblaze or IDrive for the off-site copy. One evening of setup buys the only configuration where every common disaster, from fat fingers to house fire, has a working answer.
Online backup vs an external hard drive is really a question about money over time. The drive is a single purchase, roughly $60 as a guide price, while online backup is a yearly bill: $99 for Backblaze, $83.92 for IDrive in year one and $119.88 after.
Over five years that is a few hundred dollars for the cloud copy against one drive purchase. Weigh it against what it insures: a replacement laptop, a photo library that cannot be rebought, and a ransom demand you can then ignore.
There is also a product that does both from one plan. Acronis True Image runs a local disk image to your external drive and a cloud copy in parallel for $89.99 a year, and it blocks processes that try to touch its backup files.
Two habits keep the drive half of the setup honest. Reconnect it at least monthly, because Backblaze drops an external drive from its backup if it stays unplugged for 30 days, and unplug it between runs so ransomware on the computer cannot reach it.