Wallets play a critical role in cryptographic security, and depending on the option you choose, they can often be the difference between keeping or losing funds in certain situations.

Generally speaking, there are two main types of crypto wallet that you will need to consider.

Custodian.
No custody.

Each option has its own advantages and disadvantages, and suits different needs based on your investment objectives, technical expertise, and risk tolerance.

In the latest Kraken Learn Center article, we broke down the details of each of these wallet options so you can make a more informed decision about how you choose to keep your crypto secure. Check out one of our latest articles for all the details you need.

The key defining characteristic between a custodial and non-custodial crypto wallet is who ultimately controls the private keys.

With custodial wallets, private keys are managed by a third party. This involves trusting an intermediary, such as a cryptocurrency exchange like Kraken, to securely secure your funds on your behalf.

With non-custodial wallets, the responsibility for storing and protecting private keys rests solely with with the owner of the wallet. That means if you choose to secure your own assets, you must shoulder the burden of making sure they are properly stored and protected against physical and cyber threats.

Ultimately, when it comes to choosing between custodial and non-custodial wallets, you will need to weigh what is more important to you; comfort or safety.

If it’s the former, then custody options, like holding crypto on Kraken, might suit your needs better. If the latter is more important, then a hardware wallet device or web-based non-custodial solution is probably a better option.

Have more questions about the difference between custodial and non-custodial crypto wallets? Do you want to know more about the pros and cons of both options? Need more details on how to keep your crypto secure?

Check out the latest Kraken Learn Center article What are custodial and non-custodial crypto wallets?

These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell or hold any digital asset or to engage in any specific trading strategy. Some cryptographic products and markets are not regulated and you may not be protected by government compensation schemes and/or regulatory protection. The unpredictable nature of crypto asset markets can lead to loss of funds. Taxes may be payable on any returns and/or on any increase in the value of your crypto assets and you should seek independent advice on your tax position.

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This post Crypto 101: What are custodial and non-custodial crypto wallets?

was published first on https://blog.kraken.com/post/17402/crypto-101-what-are-custodial-and-non-custodial-crypto-wallets/

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