Do you have enough crypto coins and now you are looking for secure storage mechanisms but you are confused between Custodial and Non-Custodial storage mechanisms? Well, Custodial and Non-custodial on both types of wallets, you can store the cryptocurrency and later on can manage it. But the confusion is which storage is more secure and for which you really have to go. If you are in the same shoe then this article is only for you. In this article, we will discuss a detailed discussion of Crypto Wallets: Custodial vs. Non-Custodial Wallets, and at the end will also let you know which one you really go for. So, without wasting more moments, buckle up, and let’s get started!
What are Crypto Wallets
As it is represented by its name “wallet” which means this is the mechanism used to store cryptocurrency.
A crypto wallet is a kind of software that is specifically used to store cryptocurrencies to prevent them from malicious eyes. It has two types: Hot wallets and Cold wallets. Both types we have discussed in our previous articles [ source ].
Crypto wallets are further broadly divided into two types: custodial and noncustodial wallets. Let’s discuss both types one by one:
What are Custodial Wallets
The custodial wallet is a type of crypto wallet that holds your cryptocurrency under the custody of its inventors. In this type of wallet your crypto is not fully owned by you and the private key is managed by a third party. Custodial wallets are less secure than non-custodial wallets because there is always a risk of third-party access. Such as the crypto custodian can sniff your crypto anytime as well as can shut down your account anytime.
Here the most commonly used custodial wallets are given below:
- Coinbase Wallet
- Robinhood Crypto Wallet
- Binance Wallet
- BitPay Wallet
- Gemini Wallet
- Uphold Wallet
- CEX.IO Wallet
- Kraken Wallet
- Blockchain Wallet
- OKEx Wallet
What are Non-Custodial Wallets
Non-custodial wallets are another type of crypto wallets and are also known as secure crypto storage mechanisms just because they store the crypto without involving the custody of a third party or of its inventors. Like in this type of wallet, you can fully own your crypto which means your crypto will just be under the single eye that is you. Here you can own your private key by yourself and no one can sniff or steal your crypto at any cost. In non-custodial wallets, seed phrases are used to recover your wallets in case of a forgotten password or account recovery. The seed phrases add extra points to its security.
Here the most commonly used non-custodial wallets are given below:
- Exodus Wallet
- MyEtherWallet (MEW)
- Ledger Nano S
- Atomic Wallet
- Electrum Wallet
- Samourai Wallet
- Trezor Wallet
- Trust Wallet
- Edge Wallet
- Wasabi Wallet
Conclusion
In conclusion, we always need crypto storage mechanisms to securely store the crypto into it. Well, the cryptocurrency ecosystem provides various types of storage mechanisms including custodial and non-custodial wallets. Although, by using both types we can store the cryptocurrency and can manage also. But our main concern is not just to store crypto, in fact, we want secure storage and full ownership so here non-custodial wallets are always the best choice for the users. Because using non-custodial you can fully hold the crypto as well as partial ownership of crypto by using the custodial wallet.
