What is Custodial vs. Non-Custodial Wallet?. Custodial wallets hold your keys for you; non‑custodial wallets let you control keys directly. The trade‑off is convenience versus sovereignty.
How it works
Custodians manage backups, recovery, and compliance. Self‑custody requires personal key security and backups.
Why it matters
Choose based on risk tolerance, responsibility, and transaction frequency.
Common pitfalls
- Leaving all funds on custodial platforms
- Self‑custody without backup discipline
- Assuming custodians insure all crypto deposits
Quick example
You keep trading funds on a regulated exchange but self‑custody long‑term holdings.
See also
- Hardware Wallet
- KYC
- Proof of Reserves
TL;DR: What is Custodial vs. Non-Custodial Wallet? defined in plain English with practical next steps.
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