Skip to main content

Custodial vs. non-custodial wallets: Which one to choose?

A guide to understanding the difference between custodial and non-custodial crypto wallets

Marius Wickie Support avatar
Written by Marius Wickie Support
Updated over 2 months ago

Plain and simple - choose a secure wallet on the Wickie platform. Read below why it's a good choice.


In the world of cryptocurrencies, there are two types of wallets: custodial and non-custodial.

  • Custodial wallets are managed by a third party, like a crypto exchange (Wickie). They offer convenience, but you trust someone else to keep your funds safe.

  • Non-custodial wallets are fully controlled by you. Only you have access to your funds, making you responsible for their security.

When choosing between them, consider what matters more to you — convenience or full control.


Custodial wallets

Your cryptocurrencies are stored by a third party, such as a crypto exchange or another company. This makes it convenient since you don’t have to worry about security or passwords, but it's important to understand that you don’t have full control. If the company faces issues, your funds could become temporarily or even permanently inaccessible.


Non-custodial wallets

By using a non-custodial wallet, you are responsible for storing your cryptocurrencies through a specialized app or hardware device. This gives you full control — no one can freeze or lose your funds. However, with freedom comes responsibility: you must securely manage your passwords and recovery keys, as losing them could mean losing access to your funds permanently.

The table below shows the pros and cons of non-custodial wallets.

Pros

Cons

Control

✔ Full control of your money

❌ If you lose your key, your money is gone

Privacy

✔ More private

❌ Harder to use

Interference

✔ No third-parties interference

❌ No help if something goes wrong


Comparison chart

Feature

Custodial wallet

Non-custodial wallet

Control

Company controls

You control

Security risk

High (cyber hacks)

High (losing keys)

Ease of use

Easy

Difficult

Recovery option

Yes

No

Privacy

Low

High

Conclusion

Both options have their advantages. Custodial wallets is convenient, but it requires trust of platform. Non-custodial wallets offer more control, but managing them can be more complex. If you choose an exchange that meets the highest security standards, like Wickie, it becomes a simpler and safer solution. The key is to make a responsible choice based on your needs!

Did this answer your question?