Crypto Wallets

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A custodial wallet is run by a centralized group. Most of the time, these wallets just require a password to log in and maybe a PIN for transactions. They are normally laid out for ease of use and to attract individuals who are looking for an all-in-one kind of wallet. They can also offer tokens from multiple chains in one spot. . The fact that the wallet is centralized can bother some people. These types of wallets have had data breaches before, and since they hold the keys for you, there is a risk during an event that you can lose funds or have your KYC data leaked. 

The non-custodial wallet style is a wallet that is controlled by a single entity. They are responsible for the security of the keys. There is no KYC attached to the wallet, and no centralized group is controlling the usage of the wallet. Most of these wallets are chain-specific with some exceptions, such as Metamask. They tend to be less user-friendly friendly due to if you would like to exchange tokens you have to interact with a DEX. Also, you have to add every new coin you buy to your wallet. For example, if you are using Metamask on the Avax chain and buy Yak token it will not be displayed in your wallet until you add it. The chain will recognize it is there and when interacting with an exchange it will still be tradable. 

A software-based cryptocurrency wallet connected to the Internet. While more convenient for quickly accessing your crypto, these wallets are a bit more susceptible to hacking and cybersecurity attacks than offline wallets — just as files you store in the cloud may be more easily hacked than those locked in a safe in your home.

A secure method of storing your privet keys offline. Many cold wallets (also called hardware wallets) are a physical device that looks similar to a USB drive. This kind of wallet can help protect your crypto from hacking and theft, though it also comes with its own risks – like losing it, along with your crypto.