Which is Safer? Custodial or Non-Custodial Wallets?

Which is Safer_ Custodial or NonCustodial Wallets

What is a Wallet?

A cryptocurrency wallet is a software or hardware that uses blockchain technology to safely administer, transmit and manage cryptocurrencies. Unlike your typical purse or wallet, where you keep your fiat money (money issued by a central bank in physical bills), cryptocurrency wallets only hold digital assets — crypto assets and Non Fungible Tokens (NFTs).

What is a Custodial Wallet?

As its name implies, a custodial wallet is a third-party application that manages your cryptocurrency private keys for you. Hence, you needn’t remember your seed phrases; a third party does that for you. This third-party (usually a centralized exchange) maintains all your crypto assets in custody. In addition to your keys and seeds, custodial wallets keep other information records, like your name and KYC document.

Advantages of Custodial Wallets

While a custodial wallet gives users less control over their assets, many prefer it because it requires less responsibility and is usually more convenient. Here are other advantages of the custodial wallet.

Disadvantages of A Custodial wallet

· Requirement of KYC: If you aren’t skeptical about putting your information online, you may not consider this a drawback. Due to governments’ Anti-Money Laundering policies (AML), CEXs require KYC verification to access your account.

What is a Non-custodial Wallet?

Non-custodial wallets allow you to completely control your funds and the private key. As a result, you function as your bank and conduct transactions without the intervention of a third party. Since the non-custodial wallet is not under anyone’s control, you are entirely responsible for keeping your keys safe and accessible. You make your own rules and manage your money the way you want. Non-custodial wallets are often referred to as decentralized wallets.

Advantages of Non-custodial Wallets

· You have complete control of your assets anytime, anywhere, without interruption.

Disadvantages of Non-custodial Wallets

· Since your cryptocurrency must first be transferred to an exchange, trading it will be more challenging and expensive.

Crypto wallets: Custodial and Non-custodial wallets

Which is Safer? Custodial or Non-Custodial?

In the end, the safer type of wallet is relative.

The Best Custodial Crypto Wallet

As a newbie who doesn’t want to be left out of the world of crypto, you can start your journey without worrying about asset security. With an assurance of safeguarded funds, you can begin investing immediately on Cwallet.



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Cwallet is the combined custodial & non-custodial crypto wallet. Manage and trade 800+ crypto assets and community in one place using multiple tools and bots.