What are the differences between custodial and non-custodial wallets in the world of cryptocurrency?

3 answers

• Nov 28, 2021 · 3 years ago
  Custodial wallets are wallets where a third party, such as a cryptocurrency exchange, holds the private keys on behalf of the user. This means that the user relies on the custodian to secure their funds. On the other hand, non-custodial wallets give users full control over their private keys, allowing them to have complete ownership and responsibility for their funds. While custodial wallets may offer convenience and additional services, non-custodial wallets prioritize security and decentralization.
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• Nov 28, 2021 · 3 years ago
  When it comes to custodial wallets, think of it like putting your money in a bank. You trust the bank to keep your funds safe, but you don't have direct control over them. Non-custodial wallets, on the other hand, are like keeping your money under your mattress. You have full control, but you're also responsible for keeping it safe. It's important to weigh the pros and cons of each type of wallet and choose the one that aligns with your priorities and risk tolerance.
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• Nov 28, 2021 · 3 years ago
  BYDFi, a popular cryptocurrency exchange, offers both custodial and non-custodial wallets. With their custodial wallet, users can enjoy the convenience of easy access to their funds and additional features like staking and lending. However, for users who prioritize security and control, BYDFi also provides a non-custodial wallet option. This allows users to have full ownership of their private keys and ensures that their funds are not at the mercy of a third party. It's always important to carefully consider the trade-offs and choose the wallet that best suits your needs.
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