What Are Non-Custodial Wallets?

Non-Custodial vs. Custodial

  • Non-custodial vs. custodial simply put is whether you own the master key to your crypto currency address or do you rely on a service to keep it safe for you
  • When you create a crypto wallet, a seed phrase is automatically generated. The seed phrase is a representation of a long string of random numbers — and your wallet uses it to generate the private keys that let you send and spend your crypto
  • For a non-custodial wallet, you are responsible for safeguarding the seed phrase vs. in a custodial wallet, you might only require a login and password, but the service is responsible for guarding the seed phrase
  • Custodial wallets are often crypto locked into an exchange. For example, you might buy 1 ETH on Coinbase. You own the 1 ETH but Coinbase holds that for you in a secure holding account.

To learn more: A Simple Introduction to Crypto Wallets

Non-Custodial Wallet Explained

  • Give you complete control of your keys
  • Eliminates a third-party between you and your crypto
  • Can be browser-based, software based or hardware based
  • More secure in the sense that you’re in full control of your wallet, but it also depends on how secure you are in protecting your pins, passwords and seed phrases

Examples of Non-Custodial Wallets

Examples of Custodial Wallets

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Ricky Young

My belief is that financial freedom cannot be obtained by just a 9-to-5, but a combination of smart investing and passive income. This is my journey to achieve financial freedom.

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