![]() Once you get a non-custodial wallet, be sure to protect those seed words they give you for backup. If it starts climbing into a 6-12 month salary or more, I'd recommend a hardware wallet. If this is a "medium" amount of money like a month or two of salary, a non-custodial wallet on your phone is fine. So if you ever get to the point that the bitcoin you have is worth more than you would carry in your wallet, you should move it to a non-custodial wallet where you control the keys. Now if you had $5k, you probably wouldn’t carry that in your wallet. If you lose your wallet, it’s gonna suck, but it’s not the end of the world. So if you carry around $100 in your wallet, no biggie. ![]() Only keep an amount of bitcoin in a custodial wallet that you would feel comfortable with in your real wallet. For larger amounts of bitcoin, I would highly recommend using a non-custodial wallet. I keep a little bitcoin in a custodial wallet like cash app or coinbase because it’s convenient. There is a saying in bitcoin circles: “Not your keys? Not your coin.”įor small amounts of bitcoin, a custodial wallet is no problem. Keys to a bitcoin wallet are represented by a series of random words that you can write down or memorize.Īs long as you never digitize these words (no pics, no email, etc) just in your head or on paper, you cannot lose your money, and nobody can take it from you by hacking. You’re responsible for security, and if you lose the wallet no biggie, as long as you have your secure “keys” saved somewhere. Most exchanges' wallet (coinbase, kraken, etc.) is this kind of wallet.Ī non-custodial wallet puts you in full control. Now usually banks have better security than you normally do, so it might be ok, but there’s nobody to complain to if the custodian gets hacked. If a “bank robber” (aka hacker) robs the old West Bank (custodian) you’re out of luck. When you put your money in a custodial wallet, the company that runs that wallet has your actual money, but you have access to it. Custodial wallets are like unsecured bank accounts. Custodial wallets and non-custodial wallets. Bitcoin wallets can be sorted into two categories.
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