Custodial VS Non Custodial

Cryptocurrency and blockchain technology enables people to be in control of their assets, without the need for intermediaries and exchanges.

Although decentralised technology third party companies do exist to enable user friendly experiences.

However there is really no need for these third parties.

This is where the debate of Custodial VS Non-Custodial wallets comes into discussion.

What are Custodial & Non Custodial Wallets?

Control of cryptocurrency assets are made possible by private keys, keys denote ownership of a specific asset.

Custodial wallets are wallets that private keys are managed by a third party such as an exchange,

Whereas with non custodial wallets, the user/individual retains control of the private keys. I.e the user actually owns the cryptocurrency,

Why Should I Care?

I don’t see the point of owning cryptocurrency if you aren’t going to truly embrace the technology at your disposal.

Owning your private keys is the first step you must take to be secure.

Often with custodial wallets there is always a risk that if the exchange is to go under, it is difficult to retrieve your funds.

Whereas Non-Custodial wallets you just need to keep your private keys secure.

This saying sums it up really:

“Not your keys, not your crypto”

OWN YOUR KEYS!