Wigwam is a non-custodial crypto wallet that supports all EVM-based blockchains.
What does the term “non-custodial” mean?
A non-custodial crypto wallet is a type of digital wallet used to store, send, and receive cryptocurrencies like BNB or Ethereum. Unlike a custodial wallet, where a third party like an exchange holds and manages the keys to your crypto assets, a non-custodial wallet gives you full control over your keys, and consequently, your assets.
Here's a simpler analogy: Think of a non-custodial crypto wallet like a personal safe at home, where only you have the key or combination. You're entirely responsible for keeping it secure and accessing it. In contrast, a custodial wallet is like a safety deposit box in a bank, where the bank also has a key and some control over it.
This means with a non-custodial wallet, you have more privacy and control, but it also comes with the responsibility of securing your keys. If you lose your private key, there's no way to recover your funds, unlike with custodial services that might offer recovery options.
Non-custodial wallets offer several advantages and disadvantages, especially when compared to their custodial counterparts. Here's a breakdown:
Advantages:
- Full Control Over Funds: You have complete control over your cryptocurrency, as the private keys are stored by you. This means you're not reliant on a third party to access your crypto.
- Enhanced Security: Since you're the only one with access to your private keys, there's a reduced risk of hacking and theft, as seen in some centralized exchanges and custodial wallets.
- Privacy: Non-custodial wallets typically require less personal information, offering more privacy than custodial wallets, where personal data might be needed for account creation and verification.
- No Third-Party Risk: You're not exposed to the risk of the third-party service going bankrupt, mismanaging funds, or freezing your assets due to legal or policy changes.
- Direct Transactions: These wallets facilitate direct transactions on the blockchain without intermediaries, potentially reducing fees and increasing transaction speed.
However, you must remember:
- Personal Responsibility for Security: The responsibility of securing the wallet rests entirely on you. If you lose your private keys or fall victim to scams or phishing attacks, your assets could be irrevocably lost. Read our guide to protect your funds from scammers.
- No Recovery Options: Unlike custodial wallets, if you forget your wallet's credentials or lose your private key, there is usually no way to recover the assets.
In summary, non-custodial wallets offer greater control and security at the cost of higher personal responsibility and potentially more complexity in usage. The choice between a non-custodial and a custodial wallet depends on your comfort with these trade-offs.
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