Users dealing with crypto assets must be aware of crypto wallets that store private keys and handle crypto balances. There are mainly two types of crypto wallets — custodial and non-custodial.
Users often go for non-custodial crypto wallet development because it provides complete ownership over their private keys. Crypto experts believe that non-custodial wallets are more secure than custodial wallets. Aside from this advantage, this crypto wallet offers quick money, public blockchain access, fee modification, and other features.
Non-custodial Crypto Wallets
Non-custodial wallets are digital wallets that let crypto owners take complete asset ownership. They provide consumers with complete control over their funds and secret keys. Only users receive their private keys in the form of files or mnemonic (or recovery) phrases made up of 12–24 randomly generated syllables.
The term “non-custodial” refers to a type of wallet that does not hold onto cryptocurrencies. Instead, it serves as a user-friendly interface that allows users to readily access their cryptocurrency while also allowing for third-party integrations.
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What Is the Difference Between Non-Custodial and Custodial Crypto Wallets?
We have already mentioned that non-custodial crypto wallets do not hold users’ private keys. Third parties manage private keys in the case of custodial wallets.
Another differentiating factor of non-custodial wallets is their high-security level. Custodial wallets store sensitive user data in hot or cold storage, which is prone to hacking. As a result, the level of security is reduced. On the contrary, only users have access to their data with non-custodial wallets, lowering the risk of data breaches.
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Why Non-custodial Crypto Wallets Are Better Than Custodial Wallets
From sole ownership to instant withdrawals, here is a list of benefits of non-custodial crypto wallets:
Users’ Control Over Funds
Non-custodial wallets offer users personal access to their funds. Crypto holders do not have to rely on a third party to handle their funding or execute related activities.
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Safety in Funding
The security of non-custodial wallets entirely depends on their holders and how they keep their private keys. Only holders have all the data related to crypto wallets and their funds, reducing the chances of hacking by data intruders
Privacy
Users of non-custodial crypto wallets do not need to share their data in order to receive, send, or manage their funds. As a result, consumers do not have to give up their right to privacy control.
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Multiple Wallets or Portfolios
Users can utilize their recovery phrases in different wallets. They can also create various portfolios in the same wallet.
Non-Custodial Crypto Wallets to Consider
Exodus
Exodus is a non-custodial wallet that supports peer-to-peer (P2P) crypto trading in decentralized exchanges (DEXs). It offers various wallet types, such as Trezor hardware, mobile, desktop, Web3, and more.
Electrum
Electrum is another popular crypto wallet that provides private keys to users only. It utilizes servers that index Bitcoin. From multi-sig to cold storage, the platform offers various features.
ZenGo
ZenGo is a non-custodial wallet without any private key. It creates two mathematical secret shares for the ZenGo server and a user’s device using multi-party computation (MPC) and threshold signatures.
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Summing Up
Nowadays, many crypto holders prefer non-custodial crypto wallets simply due to their offerings. Security, privacy, ownership rights, and various other features are making these wallets a popular choice among crypto users.
You can also step into non-custodial wallet development with the right partner. Crypto wallet developers at Oodles can assist you in developing a non-custodial wallet with advanced features. Contact us today to discuss your crypto project requirement.
Hire blockchain development company to create a non-custodial crypto wallet might provide numerous advantages. They can help assure the success of your wallet project by providing knowledge, customization, security, scalability, and continuous support and maintenance.
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