Non-custodial wallets are digital wallets that enable users to take full ownership of their assets. The name (non-custodial) comes from the fact that the wallet itself doesn’t have custody of your crypto but rather serves as an interface that enables you to easily conveniently access it while also allowing third-party integrations.
What is a crypto wallet?
The term “wallet” is used to describe hardware or software that holds cryptocurrencies. Custodial and non-custodial crypto wallets allow you to hold and transfer digital assets by connecting to and interacting with a particular blockchain network.
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 you move crypto from an exchange to a non-custodial wallet?
Many non-custodial wallets are renowned as user/beginner friendly. But moving crypto from an exchange to a non-custodial wallet nonetheless still presents a new hurdle for beginners. For many, it might be easier and safer to just leave their crypto on the exchange.
