The use of cryptocurrencies is growing, raising the important issue of how to keep these digital assets safe.
Laszlo Hanyecz, a Floridian programmer, had a yearning for pizza on May 22, 2010. He thus purchased two. The catch is that he made his payment using Bitcoin; 10,000 BTC for a pair of pizzas was the first-ever cryptocurrency transaction to be documented in real life. Ever since, i.e. in the next decade or so, the list of stuff that could be (and still can be) bought with cryptos or the variety of transactions that are completed using them has expanded to unimaginable limits: from buying cars, luxury clothing, tech equipment, and gambling on best Tron online casinos at Topcasinoexpert.com/paymentsystems/tron/ to butt lifts, liposuctions, and funerals.
While aficionados may recommend the best non-custodial cryptocurrency wallets for the highest level of ownership and security, it might be intimidating for novices to get started without knowing how important the custody concept is.
To begin with, there are two main types of crypto storage: custodial and non-custodial alternatives.
Wallets that give another party custody of your private keys are known as custodial storage. Comparable to storing your money in a bank, you entrust an outside entity to safeguard your assets and grant you access anytime you need to relocate or trade them. Custodial wallets are convenient and simple to use, but there’s a danger involved when entrusting someone else to protect your funds.
A non-custodial wallet, in which you have complete control over your private keys and, consequently, your digital assets, is a safer option. However, having control over your cryptocurrency implies that you alone must keep an eye on the safekeeping of your assets and secure your keys, which could be intimidating for novices.
In this article, the top non-custodial wallets are examined in terms of their hardware and software.
Key Takeaways:
- Because they provide users authority over their private keys and, consequently, their digital assets, non-custodial crypto wallets are safer than custodial wallets.
- Hardware and software wallets are the two categories of non-custodial wallets.
- There are many wallets available, each with a range of features, costs, and attributes.
A Non-Custodial Wallet: What Is It?
You are able to keep ownership and control over your cryptocurrency holdings with a non-custodial wallet. You have complete access to your money using it.
The fundamental idea is that since users are in charge of their account’s private keys, the non-custodial wallet operator shouldn’t be able to access them and thus be unable to manage or freeze your assets. To be clear, wallets aren’t really where cryptocurrency is kept. All they do is store the public and private keys and give users a way to deal with their cryptocurrency.
Thus, the following issue arises:
As Opposed to a Custodial Wallet, Why Pick a Non-Custodial Wallet?
It may be easier to let a third party handle and secure your cryptocurrency, but losing control exposes you to fraud, hacking, and theft.
Examine the tale of Mt. Gox, a prominent Bitcoin marketplace that declared bankruptcy in February 2014. In an announcement, they stated that roughly 850,000 customer bitcoins, valued at $450 million at the time, had vanished. The lost bitcoins were directly taken from Mt. Gox cryptocurrency wallets beginning in 2011, according to a security audit.
The case of FTX, a more recent custody tragedy, is well-known. It utilized billions of dollars worth of user assets before declaring Chapter 11 bankruptcy, which severely hurt users’ funds—hedge funds included—and left them stranded. Sales and use of noncustodial wallets increased significantly following this occurrence, which isn’t surprising.
There are further benefits to using a non-custodial wallet in addition to the terrifying danger of loss associated with giving up control of your money to a third party, as demonstrated by the events involving Mt. Gox and FTX.
A custodial wallet supplier has the authority to unilaterally establish charges for using its functionality or enforce a maximum withdrawal restriction. If the platform experiences technical difficulties and suspends withdrawals, you can momentarily lose the ability to access your cryptocurrency. If you don’t own your keys, your possessions are essentially in the hands of someone else. It’s true that “not your keys, not your coins”, as they say.
A non-custodial wallet, on the other hand, offers you total control over your digital assets. You can do with your money what you please. That being said, you bear sole responsibility for your keys’ security. It’s, therefore, essential to select from the top non-custodial wallets.
What Sets Hardware and Software Non-custodial Wallets Apart?
Hardware wallets are straightforward, safe devices that keep your cryptocurrency offline, protecting you from hackers. They resemble tiny external disks and are not dependent on online exchange systems; they are also referred to as “cold” wallets. In order to access your cryptocurrency with a hardware wallet, you must plug it into a device.
Conversely, software wallets are apps that you may download to your mobile device or computer. Because they are online and more vulnerable than cold wallets, they are also referred to as “hot” wallets. They offer an interface for trading and managing cryptocurrency, as well as storing your private keys. The keys kept in software wallets are protected by encryption and can only be accessed with a password.
Non-custodial cryptocurrency wallets differ in a number of ways between hardware and software. The three measurements that follow show how they differ from one another.
Security
Because they store private keys offline on a physical device, away from potential online dangers like malware or hacking attempts, hardware wallets offer a higher level of security than software wallets.
Contrarily, software wallets are kept on electronic devices like smartphones and computers, which puts them at risk of security lapses in the event that the electronic device is compromised.
Convenience and UX
In general, software wallets provide a more convenient and user-friendly experience. On gadgets that consumers already own, like PCs and smartphones, they are easily accessible. Software wallets make managing and transacting with cryptocurrencies easier since they frequently feature user-friendly interfaces.
Even while hardware wallets are more secure, some users may find them less convenient because they need to link the device to a computer or mobile device in order to conduct transactions, which might make them less user-friendly. Furthermore, the majority of software wallets are free, but hardware wallets can cost up to several hundred dollars.
Mobility
Software wallets allow users to access their account balances from different locations and are quite portable because they can be implemented on several devices. The software wallet application is easy to install on a computer or smartphone, and it even allows you to manage your cryptocurrency while on the road. Hardware wallets, on the other hand, are tangible items that must be carried separately. Even while they provide higher protection, they might not be as practical for regular or spur-of-the-moment transactions because users must carry a physical technological device in order to access their funds.
Investors typically disagree when it comes to choosing between these non-custodial wallets. Hardware wallets are more trustworthy than software wallets because they are offline. Larger quantities of cryptocurrency are therefore best stored in these wallets. However, because software wallets are online, there’s a chance that they could be hacked or compromised. They do, however, provide greater ease and are ideal for consumers who need immediate access to what they own and often transact.
Best Hardware Wallets for Noncustodial Use:
The best non-custodial hardware wallets work on the totally isolated approach, which provides them with higher security. This keeps them apart from your computer and other linked devices, which is extremely vulnerable.
These are three of the top hardware wallets to take into account:
#1. Ledger
Of all the non-custodial wallets available, Ledger is the most well-known. It’s the trustworthy business that created the well-liked Ledger line of hardware wallets. Ledger Live, a free desktop tool that’s proprietary and allows you to transfer funds, receive cryptocurrency, and check your balance, offers you total control over all of your Ledger devices and is how you access your Ledger wallet. Ledger presently provides the Ledger Nano X and Ledger Nano S Plus hardware wallets. The Ledger Stax, a brand-new product, is currently up for preorder.
But Ledger’s most recent ID-based “Ledger Recover” feature—which keeps a backup of the user’s recovery seed phrase—has recently garnered attention. Ledger has faced intense criticism from users who believe that this goes against the entire idea of possessing a non-custodial wallet. The introduction of this is meant to provide users with a method of retrieving their private keys in the unlikely scenario that they misplace their recovery phrase. Additionally, because the recovery solution is ID-based, each user would need to produce a government-issued identification as part of the KYC registration process.
- Nano X
The flagship wallet from Ledger is the Nano X. It’s unique for supporting over 5,000 tokens and managing as many as 100 crypto assets at once. With the Ledger Nano X’s Bluetooth capabilities and OLED display, you can verify your transactions while on the road without having to deal with the inconveniences of plugging in a USB wire.
- Nano S Plus
Considering its low cost of $79, the Ledger Nano S Plus provides the best value. It supports a large variety of cryptocurrencies and has an easy-to-use interface and minimalist style. It needs a physical connection and doesn’t support Bluetooth, even though it can hold more than 5,000 tokens.
- Stax
Ledger’s most recent offering, the Ledger Stax offers smooth and intuitive NFT and cryptocurrency utilization. The world’s first curved E-ink touchscreen allows users to easily sign transactions. They can also personalize the lock screen by adding their favorite NFT or photo to make it exclusively theirs.
#2. Trezor
With its hardware cryptocurrency wallet technology, Trezor created the first-ever non-custodial wallet market, and it enjoys a strong reputation in the sector. Because they are the only hardware wallets that provide native support for ERC-20 tokens, the company’s wallets are distinctive. Conversely, deleting the entire wallet is a common result of changing the firmware on Trezor wallets. For a novice user, this might be frightening, but you can instantly restore your wallet by entering your backup word.
Trezor, like Ledger, offers several types of hardware wallets: the Trezor Model One and Trezor Model T.
- Model One
The most reliable hardware wallet available today is the Trezor Model One, which was the first to hit the market. It supports more than 1,000 cryptocurrencies and has a simple, user-friendly interface.
- Model T
The Trezor Model T is identical to the Model One in terms of functions, with the exception of a recently added big touchscreen—a significant improvement that lets users input their seed word right on the device without using a computer. It’s possible that malware has invaded your machine, in which case typing your seed phrase would be extremely dangerous. The Trezor Model T eliminates any hacking risks because it only accepts touchscreen input for the seed phrase and is malware-free because it isn’t linked to the Internet. Compared to the Trezor Model One, the Trezor Model T supports a greater number of cryptocurrencies.
#3. SafePal
SafePal is a hybrid hardware wallet that combines online and offline features, and it is extremely safe. The hardware device stores cryptocurrency, which can then be utilized to engage with SafePal’s software solutions, like as their browser extension and mobile application, which enable services like trading, purchasing, and selling.
In the event of a malware attack, SafePal has a number of security safeguards, such as self-destructive mechanisms, 2FA, and recovery seed phrases. To further enhance user-friendliness, round-the-clock community support is provided in addition to this security. Additionally, SafePal supports 54 blockchains in addition to a huge selection of coins.
Nevertheless, the wallet’s drawbacks include its inability to be carried about and its lack of Bluetooth compatibility.
Best Software Wallets for Non-Custodial Use:
Software wallets are more convenient than hardware wallets, but they might not be as safe. Without ever leaving the app, users may easily exchange, buy, and purchase with cryptocurrency. Software wallet programs are ultimately free to use, making them perfect for novices on a tight budget.
Below are the best three software wallets:
#1. MetaMask
Because MetaMask is so easy to set up, it comes in first place on our ranking of the top non-custodial web3 wallets. MetaMask is a software cryptocurrency wallet that works as a browser extension. It’s compatible with common browsers such as Firefox, Chrome, and Brave. It lacks a desktop app but does have a wallet for mobile devices.
Only blockchains that are compatible with the Ethereum virtual machine (EVM) are supported by MetaMask, and it solely stores keys for ETHER and other ERC-20 and ERC-721 tokens. Additionally, it enables communication between users and decentralized apps (DApps) constructed on the Ethereum network.
The seed phrases ensure simplicity in the event that you lose access to your MetaMask wallet by utilizing hierarchical deterministic settings to assist users in backing up their accounts. If the user enters the seed phrase in the right order, they can safely recover their lost account information. Since the MetaMask code is open-source, updates are made on a regular basis. A further great feature is the integrated cryptocurrency purchase. MetaMask facilitates trades of Ether, ERC-20, and ERC-721 tokens between users and two exchanges: Coinbase and ShapeShift.
MetaMask provides password encryption for your private keys, which are kept locally on your browser and not on a distant server, for added protection. You now have total control over both your public and private keys. Because it’s online, it’s still not as safe as a physical or paper wallet. The best use case for MetaMask is to hold tiny quantities of tokens and coins that you require to investigate Ethereum DApps.A new MetaMask token that might be airdropped to MetaMask users is another rumor.
It should be mentioned that although staking is not integrated into the wallet, users can still stake their coins by linking MetaMask to the relevant DApps. Because MetaMask is interoperable with all DApps built on the Ethereum ecosystem, this capability is made available.
Note: If you enter your seed phrase into one of the fictitious MetaMask web pages that online criminals have set up, your wallet may be emptied entirely.
#2. ZenGo
Of the many popular non-custodial software wallets, ZenGo bills itself as the first to support several cryptocurrencies. The ZenGo wallet is simple to set up and use, and it works with both iOS and Android. You may trade or earn interest on Bitcoin, Ether, and Binance coins for a charge, and it supports these cryptocurrencies. Additionally, it offers the ease of using Apple Pay or a credit card to purchase cryptocurrency.
ZenGo’s threshold signatures technique, an advanced security feature that divides your private key into two pieces, sets it apart from other similar non-custodial wallets. The user’s phone stores the second part, while ZenGo’s servers store the first. The two parties must engage in order for the transaction to be completed.
In the event that a user misplaces their gadget, ZenGo utilizes face recognition to recover their private key share from cloud storage. These cutting-edge security capabilities are available in the ZenGo app, which has an intuitive user experience that’s been created with beginners in mind.
#3. Trust Wallet
You’ll probably hear that Trust Wallet is the greatest non-custodial wallet when you ask around. It’s designed to be convenient and is Binance’s official wallet. Keeping your cryptocurrency safe and easy to manage is made possible by Trust Wallet. It works with desktop, Android, and iOS platforms.
Trust Wallet supports a large number of cryptocurrencies and gives users several ways to purchase cryptocurrency, including cards. You may swap your cryptocurrency instantaneously and stake it for interest while still keeping the highest level of security and anonymity. Furthermore, you can monitor charts and pricing without taking your money out.
You can browse all of your NFTs, artwork, and collectibles in one location with Trust Wallet. The Trust Wallet infrastructure allows you to use DApps that you already love as well as discover new ones.
The application utilizes fingerprint and PIN code recognition to provide an additional security measure. Users’ data is not kept on Trust Wallet’s server. Instead, it gives consumers complete control over their keys by enabling them to keep data on their own devices.
With over 60 million downloads, over 10 million active users each month, support for over 4.5 million digital assets, and 65 blockchains, Trust Wallet is a popular tool. All things considered, it’s a feature-rich and safe software wallet that works well for most users.
Conclusion:
All things considered, the top non-custodial wallets give you direct access to a non-custodial exchange or blockchain. You will have total control over your keys with these, and there’s very little interference from outside parties.
Non-custodial storage lowers third-party risk and enables anonymous transactions in addition to security. You also have the option to purchase cryptocurrency directly, which increases your access to a wider variety of cryptocurrencies.
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