Crypto wallets generally fall into two categories: custodial and non-custodial. The difference lies in who controls access to the assets.
Custodial wallets
In a custodial setup, a service provider manages the wallet on behalf of the user.
This often means:
- easier access
- simplified recovery processes
- less responsibility for managing credentials
Non-custodial wallets
In a non-custodial setup, users manage their own access.
This typically involves:
- full control over assets
- responsibility for securing recovery details
- no third-party management
How to choose
The choice depends on what users prioritise:
- convenience vs control
- simplicity vs responsibility
Example
Some users prefer easier access and account recovery, while others prioritise full control over their assets.
In summary
Custodial and non-custodial wallets offer different trade-offs. Understanding these helps users make informed decisions based on their needs.
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