What are custodial wallets and non-custodial wallets?
So you’ve purchased your first cryptocurrency, It’s time to decide what type of wallet you are going to use to keep it. Do you want a custodial or a non-custodial wallet? If you’re confused by what these terms are, then you are in luck. This article dives into these two types of wallets, their uses, pros and cons.
What is a non-custodial wallet?
A non-custodial wallet is a type of wallet that grants you complete control over your crypto assets. You have your private keys to yourself, and if you lose them you will lose your crypto currencies.
There is no customer support or third party to help you protect or recover your crypto wallet. You have to find ways to keep your wallet and currencies safe. In other words, you are on your own.
What is a custodial wallet?
Custodial wallets are quite the opposite. A third party is in control of your private keys. In other words, this party is responsible for protecting and securing your cryptocurrencies. You won’t have to think about how to access your funds when you want to trade, send, or withdraw your cryptocurrencies. The third party would provide you with your currencies whenever you need them. On ValorExchange, you can use your wallet to make payments, transfers, and loads more all for free.
Pros and Cons of non-custodial wallets
These wallets give you complete control of your keys, which means you’re the only one who has access to your wallet and coins. Although many people store their cryptocurrencies on the exchange they bought them from, some people feel more comfortable having their currencies under their control.
Pros and Cons of custodial wallets
Your first crypto purchase would likely be in a custodial wallet. In these cases, the exchange acts as the custodian of your crypto wallet. They keep the keys safe and protected. This means that whatever platform you choose to use has to be very secure and trusted.
The chances that you’ll ever lose complete control over your crypto assets is slim with ValorExchange. If you forget your account password, our support team is there to help you recover it. If you make a buy or sell, you don’t have to worry because the platform is 110% secure and if you make transfers within the platform, all your transfers are free.
This is why people like custodial wallets, it’s very convenient. You don’t have to worry about losing your password and permanently losing your crypto because of it.
There is no wrong or right choice when it comes to deciding between custodial and non-custodial wallets. It all depends on your personal preference.
However, if you are great with remembering your passwords and you don’t misplace things easily then try a non-custodial wallet. However, if you know you can’t handle the risk of losing your funds because you forgot a password then get a custodial wallet.
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