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Non-Custodial Wallet – What Is It and Why Do We Have To Use It?

lnhngn 17/11/2021 12:57 531 views

All About Non-Custodial Wallet

What is a non-custodial wallet?

A non-custodial wallet is a type of software on a computer or phone that helps to store Crypto assets, allowing users to have full control of their assets with the private key or passphrase associated with the wallet.

It can be understood that no one (including the wallet provider) has the right to freeze, access or trade user assets except themselves. The non-custodial wallet only provides users with an interface to directly interact with the capital stored on the Blockchain.

To create or restore a non-custodial wallet or transaction, you need to use a private key. There are two types of private keys:

Passphrase (Mnemonic Seed): Contains 12 to 24 keywords in order. The passphrase is saved on your device allowing you to access multiple accounts at the same time.

Private key: Is a string of characters in alphanumeric format that is also stored on your device.

The above two information is extremely important, so after creating a non-custodial wallet, you must save your private key/passphrase immediately to back-up the wallet or restore the wallet for later use cases.

Why do we have to use non-custodial wallet?

There are 3 main reasons that we should use non-custodial wallet:

1. Users have full control of assets: This is the biggest advantage that users find in non-custodial wallets. You do not need to depend on any third party, not afraid of the floor collapsing, not afraid of the floor being hacked because the property is still in your hands. In addition, you can also transfer assets to the exchange to trade or receive coins to your wallet anytime and anywhere.

2. Security: The risk of information theft in non-custodial wallets is very low.

3. Instant withdrawal: No need for third-party authentication, all transactions are done on non-custodial wallets almost instantly.

Frequently asked questions about Non-custodial Wallet

What are non-custodial wallets used for?

  • To store Crypto assets of different blockchains. Depending on the application, you can trade coins directly and manage assets on different wallet applications.
  • In addition, non-custodial wallets also help you access and use services and features of decentralized finance (DeFi) applications. Something that custodial wallet does not allow you to do. 

What kind of crypto asset is suitable to store in this wallet?

  • Depending on the non-custodial wallet application, it will support different blockchains, such as Bitcoin, Ethereum, Binance Chain, Binance Smart Chain, TRON, Solana,…
  • If the custodial wallet only stores the coins listed on the exchange platform, then you can store any coin/token as long as they are in the token standard supported on the blockchains of the non-custodial wallet.
  • Some popular token standards such as: ERC-20 (Ethereum Blockchain), TRC-20 (TRON Blockchain), SPL (Solana Blockchain), BEP2 (Binance Chain), BEP20 (Binance Smart Chain),…

Is there a price for storing in a non-custodial wallet?

  • You will not have to pay a charge to the developer of the non-custodial wallet application in order to send or receive coins to it.
  • You will, however, pay a small cost to the miner/validator to validate the transaction on the blockchain, also known as the gas fee.

Is there a connection between the wallet and the exchange platform?

  • Non-custodial wallets aren’t connected to a centralized exchange platform in any way (CEX). To purchase and sell cryptocurrency, you must first transfer the quantity of coins in your non-custodial wallet to the CEX exchange platform.
  • Non-custodial wallets, on the other hand, can connect directly to a decentralized exchange (DEX). Non-custodial wallets can be linked to exchanges like Uniswap, Sushiswap, 1Inch, and others to trade coins as usual.

Popular non-custodial wallets

  • Non-custodial wallets are becoming increasingly popular. You can choose Coin98 Wallet (mobile version and Extension), Metamask, Trust Wallet, Zapper, Zerion, and other popular non-custodial wallets.
  • Coin98 Wallet is now being favored by many users over other wallets, thanks to its user-friendly UI and convenient features such as the ability to store multiple coins/tokens on multiple chains. Coin98 Wallet also incorporates a number of AMMs, allowing users to trade and sell coins directly from the wallet with the lowest possible fees.
  • NFT Wallet has also been added to the current version of Coin98 Wallet, bringing the NFT ecosystem on Ethereum, Binance Smart Chain, and Solana into Coin98 Wallet, along with support for NFT storage, Animated GameFi, and an improved user experience.

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lnhngn

"Don't invest in what you don't know. Learn first then invest"