Non-custodial wallets are different from those of custodial wallets. A Custodial wallet is a digital wallet that a service provider (could be a broker or an exchange) holds on your behalf. This service provider or third party holds access to your private keys.
You might be thinking what these private keys actually mean? Alright, assuming that you are new on this term, a private key is a set of string or a code usually consisting around 64 alphanumeric terms that give your wallet a unique identity and stores your funds. Private key looks something gibberish like:
Eab9c608c6a4f678826a34070983c169f72280a1e8a919ba3264fc7445cb
So, these keys can hold million-dollars' worth of your cryptocurrencies. Anyone who has access to your wallet’s private key also holds access to your crypto-currencies. So, by using a Custodial wallet you are trusting these third party for holding your private keys safe. You may lose access to your funds; in case the third party or the company data’s somehow gets breached or hacked or if the company goes out of business. Also, we are not unheard from the news of millions dollar worth of cryptocurrencies stolen by high profile hackers meanwhile company undergoing the losses.
In Contrast to using a Custodial wallet, you do not hold access to the private keys; and the company that you are the one having access to your private keys. They are the ones to open your wallet with the keys once you make the login requests to their website.
Some of the pros of using Non-Custodial Wallets are:
- Full control over your funds.
- Would not have to follow any random Terms and Conditions.
- Enhanced Privacy and requires no Personal Information.
- Doesn’t require KYC or handling your information to anyone.
- Less vulnerable to Security and Data threats.
- Easy for beginners to start with.
These are the best non-custodial wallets that you can start right away with:
- Trust Wallet:
Trust Wallet is first on our list for the multi-currency non-Custodial out there. What puts Trust wallet in the league of the best wallets? Well, it is designed and developed for digital decentralized assets and provides technical advantage with its latest features.
- User-friendly interface and better UI.
- Supports hundreds of cryptocurrencies.
- Offers monitoring of your assets.
- Provides opportunity to earn interest on cryptocurrencies.
- Offers DApps Browser.
- Available only for Smartphones, but not for PC.
Metamask:
Metamask is available through browser extension for Chrome, Firefox, and BRAVE browser. METAMASK has to be on our list for decentralized crypto wallets because of following reasons.
- Millions of active monthly users worldwide.
- Support for both PC and Smartphones.
- Anonymous transactions requiring no Personal information.
- Swapping between coins with no hassle.
- Easy Syncing between websites.
- Extra protection with Password in their extension.
However, despite all these pros, the major flaw in using a non-custodial wallet is that you have to store your private keys safely, or else you may lose access to your funds. The better suggestion will be to have a separate wallet each for the Custodial and non-Custodial wallet, and to learn how these wallets work. Never hesitate to start and learn from the mistakes you make along the way. Articles on the use case of Custodial Wallet and advance Metamask guide will be published soon.
Wish you happy trading!
