Both. I have a Kindle Keyboard, Kindle paperwhite and a Kindle Fire HD. I have so many paper books (most of them hardback) that I'm rapidly running out of room. I bought the kindle 3 years ago and love the size, weight and ability to change font size and style. I very seldom buy paper books unless they're from my favourite authors. I'll always buy both paper book and e-book by Stephen King as well as a few other authors, but most will be e-book only.
I love the smell and feel of "real" books, but practical sense has had to prevail. The smell of a book can spark many fond memories, something an e-reader can never do, but space is rare. And don't suggest I get rid of some books to make room as that is unthinkable.