What is a custodial crypto wallet?
A Custodial Wallet is defined as a wallet in which the private keys are kept by a third party. Meaning, the third party has complete control over your funds, and all you have to do is provide authorization to make or receive payments.
Due to the decentralisation of blockchain technology, you may lose access to your wallet indefinitely if you misplace your private key. You may transfer responsibility for your private key by choosing a custodian. Even if you forget your exchange password, you should be able to regain access to your account with the help of customer support.
However, keep in mind that a third party controls your funds. Your cryptocurrency is just as secure as the custodian that maintains it. That is why it is important to choose a reputable exchange or service provider.
What is a non-custodial crypto wallet?
A non-custodial crypto wallet is one in which only the holder has access to and control over the private keys. Non-custodial wallets are the ideal alternative for users who want more control over their funds.
However, as previously stated, the wallet owner is responsible for keeping the key secure. If they misplace the keys or forget their backup seed phrase, the wallet and its contents are lost. Non-custodial wallets are accessible as applications, executables, and browser extensions.
Trust Wallet and MetaMask are two popular examples. You may also discover wallet services, such as Tor.us, that enable users to encrypt their keys via social logins, making the process more safe and easy.