The Importance of Non-Custodial Wallets for Your Crypto – Part 2

Recently, quite a few CeFi platforms suspended withdrawals. This had a big impact on their customers. They could not access their investments anymore. In our recent article, we looked at the rights of a customer in such a case. Unfortunately, that didn’t look good at all.

As a follow-up to our previous article, we’re going to look at the various non-custodial wallets options out there. The way you can keep control over your coins. So, let’s dig in and see what is available.

Why Is a Non-custodial Wallet Important?

With non-custodial wallets, you keep control over your digital assets. In one of the latest cases in the industry, Voyager suspended trading and withdrawals from its platform. As a result, their customers didn’t fare well at all. Voyager’s agreement was one-sided, and very much in favor of Voyager.

You can see the following comparison video between custodial and non-custodial wallets:

One of the main problems is that Voyager, and similar platforms, have control over your assets. They have the keys to the omnibus accounts and wallets. That’s where they hold all the assets.

There are better, non-custodial wallet options available. These allow you to keep full control over your digital assets. They are safer and more private. It works for crypto, NFTs, and everything else that’s available in the crypto space. They also don’t require lengthy KYC or AML procedures. So, if you want safer and easier control over your tokens, non-custodial is the way to go. 

Non-Custodial Wallet Options

You need to find out which one fits best for you. Look at your trading or investment strategy and make a choice. However, before doing that, you need to know what your options are. So, here we go. Have a look and see what suits you best.

1) Hardware Wallets

Hardware wallets allow you to store your assets offline. As a result, the crypto community considers them to be the safest option. That is because they are not connected to the internet. Therefore, we also call this ‘cold storage’ or a cold wallet. These wallets are an excellent option for long-term storing crypto. If you trade a lot, they are not so handy. Here’s a short review of the two leading brands.

a) Ledger—Their two bestsellers are the Ledger Nano X and the Nano S. Each supports up to 1800 coins. However, the S version can only store 3 to 6, and the X version stores up to 100. You control the wallet through an online platform, Ledger Live. Still, the wallet is not connected to the internet. Ledger Live also supports an exchange, and they offer a staking feature.

b) Trezor—Their flagship is the model T. In contrast to Ledger, it has a touch screen. It also supports a unique micro-SD card slot. Without the card, the wallet is useless in case you lose your wallet. It also has a built-in crypto exchange.

The picture below shows the Trezor T on the left and the Nano X and S on the right.

Source: Zenledger

2) Desktop Wallets

You download and install a desktop wallet on your PC or desktop. These non-custodial wallets are only accessible from the computer you downloaded them on. We consider them to be secure, but not at the same level as a hardware wallet. With a hack or a virus, you can lose all your assets. Also, desktop wallets are, in general, incompatible with hardware wallets. Because they connect to the Internet, they are also known as hot wallets. Here are two good options. 

a) Atomic—It’s free to download, and it supports around 500 coins. It offers to stake but has limited buy options for only a handful of coins. It has encrypted private keys and is best used with a VPN connection.

b) Exodus—Many consider this wallet to be the top choice for beginners. It supports 150 coins and easily links to CEXs and DEXs. Although it doesn’t offer 2FA, it links to the Trezor hardware wallet. It offers staking options and exchange. Exodus also integrated the Lightning Network.

? How to keep your crypto safe?!

⚡️ Never share 12 words with anyone, never fill in any «recovery» web forms!
⚡️ Avoid impostors who pretend to be us, we will never contact you first!
⚡️ Write down 12 words, keep them offline & don’t lose!

? More tips: https://t.co/j4TnZxmOXL pic.twitter.com/PuTLuRGKTM

— AtomicWallet.io (@AtomicWallet) April 29, 2021

3) Mobile Wallets

As the name indicates, these are non-custodial wallets specifically for mobile phones. They should be available for iOS and Android. Since they are hot wallets, security filters like 2FA and storage options for seed phrases are very important. Most often they are small and simple, because of the limited space mobile offers. Here are some good options:

a) Edge—Easy to set up with a simple UI. Supports over 30 tokens and offers an exchange. software wallet has high security and privacy features. It encrypts your data and offers 2FA. However, it doesn’t store fiat.

b) Coinomi—Supports a wide variety of crypto assets. They also support 125 blockchains. Has an exchange, staking, and an easy UI. However, there’s no 2FA option, but it does offer a desktop version.

c) TrustWallet—It supports over 1 million cryptos with staking options. However, with customer support, you can’t recover a lost account. You can only use your 12-word recovery phrase. It also sees many phishing attacks. This wallet works on some Macs. However, the mobile version may be hard to use with NFT marketplaces and DEXs.

1️⃣ How do you keep your wallet secure?
2️⃣ What are the common crypto scams?
3️⃣ What happens if you’ve been compromised?

We answer all these key #TrustWallet security questions in this complete security guide with @Binance ?

— Trust – Crypto Wallet (@TrustWallet) July 14, 2022

4) Browser or Online Wallets

These wallets run in a cloud service, and you can access them anywhere from any computing device. They work as browser extensions, although, there are also browsers with bbuild-inwallets. Here are some options.

a) MetaMask—This is the browser wallet that is most widely supported. Connects with hardware wallets and has a swap system built in. It sees many phishing attacks, because of its popularity. Supported by Chrome, Brave, Firefox, Edge, and all EVM blockchains. Good explanation of recovery phrase and storage backup.

b) Coinbase—Only runs on Chrome and all EVM blockchains. Has a token swap for a variety of networks. A bit weak on recovery phrase and storage backup explanation.

c) Phantom—A wallet only for the Solana network. It has a built-in exchange for the Solana ecosystem. It supports NFTs and Solana has a big NFT market. Hardware wallet support and multiple browsers.

d) Paper Wallet—This is old style, but still works. You just write your keys on a piece of paper. Keep it in a safe place and check regularly that the paper hasn’t deteriorated. They are fragile and you can lose them easily. That’s why they are not used that often anymore.

Some Other Useful Options

a) WalletConnect—This connects many wallets with any chain in any browser. As such, it’s not a wallet itself, but rather a protocol connecting DeFi dApps with any wallet. 

b) Name Services—ENS or Unstoppable are such services. They make blockchain addresses human readable. Instead of a long string of numbers and letters, you replace it with your name. You can use any human-readable combination you like. They keep your wallet address hidden, but you can still get paid.

c) Muun—This is a Lightning Network and Bitcoin wallet. The Lightning Network is a layer 2 payment option built on top of Bitcoin. It allows for fast and low-cost micropayments in BTC. Muun offers three backup options. This makes it hard to lose your funds.

Conclusion

We already emphasized the importance of having full control over your crypto. Non-custodial wallets do just that. However, with this also comes responsibility. You are really in control, meaning, that if you lose your keys, you lose access to your wallet. Make sure to have backups of the seed phrases. Furthermore, keep them in at least 2-3 different and safe places.

You can also add other extra security layers. Have long passwords that are complex, and make sure that each withdrawal requires a password.

However, non-custodial wallets have better control and privacy. They are also safe, although this varies, pending on which kind of wallet you use, cold or hot. So, make full use of all safety measures, like 2FA. Now it’s time to find the wallet that suits you best.

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