In the world of cryptocurrencies, one of the most important decisions is: Who controls your crypto – you or someone else? This is the fundamental difference between custodial and non-custodial wallets.
Both wallet types come with their pros and cons – depending on how much control, responsibility, and convenience you prefer.
Custodial Wallet
With a custodial wallet, a third-party service provider – such as a crypto exchange or regulated custodian – holds your private keys on your behalf. You access your wallet through your user account, but you don’t have direct access to the keys that secure your funds.
- Convenient: No risk of losing your seed phrase or private key
- User-friendly: Ideal for beginners
- Relies on the provider – in case of technical failure or hacks, there may be risks
Non-Custodial Wallet
With a non-custodial wallet, you alone control your private keys and, therefore, your crypto. The wallet software (e.g. MetaMask, Trust Wallet) simply connects you to the blockchain. You are fully responsible for security and backup.
- Full control: Only you can access your funds
- No reliance on third parties
- Greater responsibility – losing your seed phrase means permanent loss of access
What does this mean for you?
The best choice depends on what you value more: convenience or self-sovereignty. Many beginners choose a custodial wallet for simplicity, while experienced users often prefer non-custodial solutions.
Floin Insight
Floin offers the best of both worlds. Your assets are securely stored in segregated wallets – meaning they’re separated and traceable for each user. At the same time, you retain full transparency and control through strong security features like two-factor authentication and user-specific recovery mechanisms.
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