Cryptocurrency adoption is on the rise, along with the vital question of how to securely store the keys that unlock access to these digital assets. For starters, cryptocurrency storage falls under two broad categories: custodial and non custodial storage solutions.
The safer alternative is a non custodial wallet. This way you have sole control of your private keys and, by extension, your digital assets. But being in charge of your cryptocurrency means you are solely responsible for securing your keys and staying on top of the security of your assets.
This article explores the non custodial meaning in cryptocurrency wallets and a few of the best ones on the market today.
Non Custodial Meaning: What Is A Non Custodial Crypto Wallet
A non custodial wallet allows you to own and control the private keys to your cryptocurrency, giving you full access to your funds. The underlying principle is that users control the private keys to their accounts, and the noncustodial wallet provider shouldn’t have any access to the keys, which therefore means they can’t freeze or manage your assets in any way.
However to clarify, wallets don’t actually store cryptocurrencies. They merely hold the private and public keys, and provide users with an interface to interact with their digital assets, which are decentrally kept on the public ledger or blockchain.
Why Use A Non Custodial Wallet?
While allowing a third party to manage and secure your cryptocurrencies is convenient, giving up control can create susceptibility to exit scams, hacking and theft.
A custodial wallet provider can impose a maximum withdrawal limit or unilaterally set fees for using their services. You can temporarily lose access to your crypto if the platform has technical issues. Basically, your assets are at someone else’s mercy if you don’t own your keys. After all, as they say, “not your keys, not your coins.”
On the other hand, a noncustodial wallet gives you complete charge of your hard-earned digital assets. You set your own rules and do with your funds as you wish. However, you alone are responsible for the safety of your keys. Hence, choosing from the best non custodial wallets is critical.
What’s The Difference Between Software and Hardware Non Custodial Wallets?
Software wallets are applications that you can download on your computer or mobile device. They securely store your private keys, and provide an interface for you to trade and manage your crypto. Software wallets are encrypted, and require a password to access the keys that are stored in them.
Hardware wallets are secure and simple devices that store your cryptocurrency offline so you can’t be hacked. Also known as cold wallets, they look like small external drives and are independent of online exchange platforms. Hardware wallets require you to plug them into a device before you can access your cryptocurrency.
When it comes to deciding between either of these best non custodial wallets, investors tend to have differing opinions. By virtue of their offline status, hardware wallets are more secure than software wallets. Thus, these crypto wallets are better for storing large amounts of crypto. On the other hand, software wallets are connected to the Internet, so there’s a theoretical risk of possible breach or attack. However, they offer more convenience and are well-suited for users who transact frequently and need quick access to their assets.
Best Non Custodial Software Wallets
Although possibly less secure than hardware wallets, software wallets have the advantage of convenience. Users can freely buy, exchange and make purchases with crypto without leaving the app. Ultimately, software wallet apps are free to download, and are therefore ideal for beginners on a low budget.
Metamask
Metamask is one of the best noncustodial wallets thanks to its incredible ease of use. As a software crypto wallet that’s also a browser extension, Metamask can be accessed on popular browsers like Firefox, Chrome and Brave. Metamask only supports the ETHereum blockchain, and it only stores keys for Ether and other ERC20 tokens. The wallet also allows users to interact with DApps built on the Ethereum blockchain.
In terms of security, Metamask offers password encryption for your private keys, which remain stored on your browser and not on any remote server. This gives you complete control over your private and public keys. However, it’s still not as secure as a hardware or paper wallet, since it’s online. Metamask is best used for storing small amounts of cryptocurrencies and tokens that you need to explore DApps on ETHereum.
Trust Wallet
Ask anyone what’s the best noncustodial wallet they recommend and you’ll likely hear of Trust Wallet. Built for convenience, Trust Wallet makes it easy to manage and secure your cryptocurrencies. It’s available for iOS, Android and desktop.
Trust Wallet offers users multiple options to buy crypto, including cards, and supports a wide range of cryptocurrencies. You can stake your crypto for interest and exchange it instantly while maintaining utmost privacy and security. You can also track prices and charts without leaving the wallet.
Trust Wallet also allows you to view your NFTs, art and collectibles in a single place. You can use your favorite DApps and explore new ones on the Trust Wallet platform. The app employs fingerprint and PIN code scanning for an extra layer of security. Trust Wallet doesn’t store users’ data on its server. Rather, it allows users to store data on their devices, putting them in full control of their keys. Trust Wallet supports 40 blockchains and over 160 digital assets. Overall, it’s a secure and versatile software wallet that’s ideal for most types of users.
Best Non Custodial Hardware Wallets
The principle behind the best noncustodial hardware wallets that makes them more superior security-wise is that they’re fully isolated. This separates them from your highly vulnerable computer or connected device. Here are the hardware wallets worth considering.
Ledger
When it comes to the best non custodial wallets, Ledger is the most recognizable. They’re the established and reputable company behind the popular Ledger suite of hardware wallets. Your Ledger wallet is accessed through Ledger Live, a proprietary free desktop app that enables you to send and receive cryptocurrencies and check your balance, and gives you complete control of all your Ledger devices. Ledger currently offers two hardware wallets: Ledger Nano X and Ledger Nano S.
Ledger Nano X: This is Ledger’s flagship wallet device. It’s remarkable for its ability to manage over 100 crypto assets simultaneously, and it supports over 1,800 tokens. The Ledger Nano X features an OLED display and Bluetooth support, which means you can confirm your transactions on the go without the hassles of connecting a USB cable.
The Ledger Nano X is a bit pricey at $119, but it delivers solid security for your digital assets in a sleek and robust package.
Ledger Nano S: With an affordable price tag of $59, the Ledger Nano S offers the best bang for your buck. It comes with a user-friendly interface and clean design and provides support for a wide range of cryptocurrencies.
Trezor
Trezor pioneered the best noncustodial wallets market with its hardware crypto wallet technology, and consequently has a solid reputation in the industry. Trezor wallets are unique in that they’re the only hardware wallets to offer native support to ERC20 tokens. On the flip side, updating the firmware on Trezor wallets often causes the whole wallet to be deleted. This can be scary for a new user; however, you can easily enter your backup phrase and restore your wallet quickly.
Like Ledger, Trezor offers two hardware wallet devices: Trezor Model One and Trezor Model T.
Trezor Model T: The Trezor Model T shares the same features as the Trezor Model One, except for its newly introduced large touchscreen. The touchscreen is an important upgrade, since it allows users to enter their seed phrase directly on the device without going through a computer. Your computer could be infected with malware, which would make entering your seed phrase on it very risky. By only allowing you to enter the seed phrase through the touchscreen, the Trezor Model T removes all threats of hacking since the device isn’t connected to the Internet and is therefore malware-free.
Trezor Model One: The Trezor Model One is the earliest hardware wallet on the market and still the most reputable. It features a clean design with a user-friendly interface, and supports over 1,000 cryptocurrencies. The only major altcoin it doesn’t support is Ripple Labs’ XRP. You can get the Trezor Model One for $55, which makes it quite affordable.
Closing Thoughts
All in all, the best non custodial wallets connect you directly to either a blockchain or non custodial exchange. This lets you have complete control of your keys, and third-party interference is very minimal. Apart from being more secure, noncustodial storage allows you to transact anonymously and reduces third-party risk. You also have the freedom to buy crypto directly, giving you access to more cryptocurrencies.
Now that you’ve understood non custodial meaning in crypto, more specifically, non custodial wallets and their uses and types, what are your thoughts on them and will you be purchasing one sooner or later?
