How do non-custodial wallets differ from custodial wallets in terms of security?

3 answers

• Dec 26, 2021 · 3 years ago
  Non-custodial wallets, also known as self-custody wallets, provide users with full control over their private keys. This means that the user is solely responsible for the security of their funds. On the other hand, custodial wallets hold the user's private keys on their behalf. While custodial wallets may offer convenience and additional services, they also introduce a higher level of risk as the user is relying on the security measures implemented by the wallet provider. It's important to note that the security of both types of wallets ultimately depends on the user's actions and the measures taken by the wallet provider.
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• Dec 26, 2021 · 3 years ago
  When it comes to security, non-custodial wallets offer a higher level of control and privacy. With a non-custodial wallet, the user is the only one who has access to their private keys, which means that even if the wallet provider is compromised, the user's funds are still secure. On the other hand, custodial wallets may be more susceptible to hacking or insider attacks, as the user's private keys are stored by a third party. However, custodial wallets often provide additional security measures, such as two-factor authentication and insurance, to mitigate these risks. It's important for users to carefully evaluate their own risk tolerance and choose a wallet that aligns with their security preferences.
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• Dec 26, 2021 · 3 years ago
  At BYDFi, we believe in the importance of non-custodial wallets for maintaining the highest level of security. Non-custodial wallets ensure that users have full control over their funds and reduce the risk of third-party breaches. While custodial wallets may offer convenience and additional features, they introduce a higher level of risk as users are relying on the security measures implemented by the wallet provider. It's crucial for users to understand the trade-offs between convenience and security and choose a wallet that aligns with their priorities.
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