What is the difference between custodial and non-custodial wallets?

If you are considering downloading a wallet for holding/transferring cryptocurrencies, one of the biggest considerations in your decision is whether to use a custodial or non-custodial wallet.

A custodial wallet is a type of cryptocurrency wallet where the private keys are held by a third party. This means that the user does not have full control over their funds, but relies on the third party (usually a company) to manage and secure their assets. This can be convenient as the user does not need to worry about losing their private keys, but it also means they are trusting the third party to not lose or misuse their funds.

A non-custodial wallet, on the other hand, is a type of cryptocurrency wallet where the user has full control over their private keys and therefore their funds. This means that the user is responsible for the security of their assets and must ensure they do not lose their private keys. While this gives the user more control, it also comes with more responsibility.

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