Custodial v.s. Non-Custodial Bitcoin Wallets


Jake Morr


August 25, 2023

A wallet in the Bitcoin realm is a digital tool that lets you manage, send, and receive Bitcoin. Custodial wallets are managed by a third party, often an exchange, which holds your Bitcoin's private keys on your behalf. This offers convenience and customer support, but the user doesn't have direct control over their funds, making them vulnerable to hacks or service restrictions. Non-custodial wallets, in contrast, allow users to keep their private keys, ensuring total control over their Bitcoin and placing the responsibility of safekeeping squarely on the user. Different traders value the pros and cons differently, leading them to choose one over the other based on personal preference and comfort level.

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