There are two main types of wallets, custodial (supervised) and non-custodial (non-custodial) wallets, for the storage of crypto money holders.
Cryptocurrencies are digital currencies. Crypto wallets are hardware tools that store private keys that allow you to access them. A crypto wallet consists of two main concepts, a public and private key. The private key is treated as a secret password as it signs transactions and provides access to funds. The public key can be shared with others. If people send crypto assets, they can transact to one of your addresses generated by the public key of your wallet.
Outside of the wallet type, you will always have a custodial or non-custodial crypto wallet. Non-Custodial crypto wallet is the name given to digital wallets whose private keys are controlled only by the wallet owner. Non-Custodial is an offline wallet type. Information such as the address or private key of the cryptocurrency wallet is stored in non-custodial wallets so that only wallet owners can control it.
Non-custodial wallets provide full control over cryptocurrencies. There are also some risks and disadvantages brought by this control. Because it is the person himself who must keep this key safely. If your private keys are lost in any way, you will lose access to your funds. One of the biggest drawbacks is the lack of customer service to turn to if you need any support. Since you manage everything yourself in this unattended wallet, you are still solely responsible for the consequences if anything goes wrong. Even a single typo can mean a huge loss of funds. If you make such a mistake, there is no undo.
What are the Non-Custodial Wallet Types?
There are 5 types of non-custodial wallets. Let’s examine these:
- Desktop Wallet:This type of non-custodial wallet can be downloaded to a computer like an application and you can use it without the need for internet access.
- Mobile Wallet: It is the version that is run on the mobile phone by downloading the application. It allows you to access your wallet from anywhere.
- Web Wallet: The web wallet works over the internet browser. When you access the web wallet, the information of your wallet cannot be seen or stored by the service providers.
- Paper Wallet: It is the oldest method among non-custodial wallet types. The wallet address is the paper on which the private and public key information is written. It can be operated with a QR code for ease of access.
- Hardware Wallet: This is the type of wallet that has reached the highest level of security among the sub-types of wallets. The hardware wallet is similar to a USB stick and can be run on any device with the appropriate input. Two-step verification and PIN option are available. This ensures a high level of security.
