What is a self-custody wallet?

Let's look at self-custody wallets, how they work, and their benefits and risks. What Are Self-Custody Wallets? Self-custody wallets, also called non-custodial wallets, are digital wallets that let you store, manage, and trade cryptocurrencies without the help of a third party. They are unlike custodial wallets, which hold your private keys.

What is a custodial wallet?

Some of the most popular crypto exchanges, such as Coinbase or Gemini, are considered custodial wallets. A custodial wallet (also known as a hosted wallet) is a digital wallet that holds your private keys and takes care of your funds. To put it in another way, you are trusting a third party to secure your funds.

Should I use a crypt wallet or a non-custodial wallet?

On the other hand, if you feel you need more control over your crypto and want to follow the "not your keys, not your coins" rule, a non-custodial is the better choice for you. Nevertheless, you can use both types of crypt wallets for the best results.

What is a cold wallet & how does it work?

Cold wallets maximize security at the expense of access speed. The private keys are stored completely offline on a device that is not connected to the Internet. Human involvement is required to digitally sign each transaction so it can be recorded on the blockchain.