How does a custodial wallet differ from a non-custodial wallet when it comes to storing digital currencies?

3 answers

• Dec 25, 2021 · 3 years ago
  A custodial wallet is a type of wallet where a third-party, such as a cryptocurrency exchange or a financial institution, holds and manages your digital currencies on your behalf. This means that you don't have full control over your funds and you need to trust the custodian to keep your assets safe. On the other hand, a non-custodial wallet gives you complete control over your digital currencies. You hold the private keys to your wallet, which means that you are the sole owner of your funds. While custodial wallets offer convenience and ease of use, non-custodial wallets provide enhanced security and privacy.
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• Dec 25, 2021 · 3 years ago
  When it comes to storing digital currencies, custodial wallets and non-custodial wallets have distinct differences. A custodial wallet is like having a bank account for your digital currencies. The custodian holds your funds and manages transactions on your behalf. This can be convenient for beginners or those who prefer to delegate the responsibility of managing their assets. However, it also means that you are trusting a third-party with your funds, which may introduce counterparty risk. On the other hand, a non-custodial wallet gives you full control over your digital currencies. You hold the private keys, which means you have complete ownership and responsibility for your funds. This provides greater security and eliminates the need to trust a third-party. However, non-custodial wallets require more technical knowledge and can be less user-friendly for beginners.
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• Dec 25, 2021 · 3 years ago
  At BYDFi, we believe in the power of non-custodial wallets. Non-custodial wallets offer users the ultimate control and security over their digital currencies. With a non-custodial wallet, you are the sole owner of your funds and have full control over your private keys. This eliminates the need to trust a third-party with your assets and reduces the risk of hacks or theft. While custodial wallets may offer convenience, they also introduce additional risks. Therefore, we recommend using non-custodial wallets for storing your digital currencies to ensure maximum security and control.
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