In the world of cryptocurrency , there are many development news we heard in our daily life through newspaper , tv, internet, seminar , exhibition . the adoption of cryptocurrency by mass community is rapidly increasing and we see lots of movement on exchanges and crypto wallet where they consider to store their coins , tokens or trade But because of less awareness about how to invest and secure cryptocurrency is still in beginning stage.
Here we going to learn about 'WHAT and WHY' in the concern of custodial and non custodial .
CUSTODIAL :
Custodial is basically a term which is significantly used for dealing with your virtual coins, tokens and trading platform .there are 400+ well known and high trading volume exchanges and staking and storing wallets are established to take care of your cryptocurrency in the form of investment, and Trading.
Custodial exchange and custodial wallet have same function with the dealing with customer funds and cryptos . custodial platform actually provide you user friendly service where customer can make entry to their account from any device any countries without private keys of your wallet, means these companies are fully responsible for your funds and crypto which you keep in their wallet .
if we think about quick buying and selling and take the advantage of market during bull run, these platforms are quite hassle free and convenient but also risky and not fully secured as we see in everyday news ,there are some serious cases of cyber attack on their exchange and wallet where chances becomes too high to loose your coins or remaining funds .
Advantage:
- instant trading , deposit ,withdrawal .
- in case of lost sign in password ,fund delayed ,withdrawal ,direct communication available .
- no need to worry about private keys
- 2fa authentication protection, email and contact numbers are linked to protect your identity for any activities.
- instant airdrop ,promotional offer, affiliation program.
- leverage and marginal trading
- social chat during trading
- accessible worldwide
Dis-advantage:
- cyber attack vulnerability
- manipulation
- instant lock the fund
- scam
- government control
- money laundering
- identity exposed
NON-CUSTODIAL :
Non- custodial basically the activities where nobody control. in a word its 'decentralised' where you self control your all activities .in the world of cryptocurrency , This is also trending and increasing the ratio of adoption by communities .This facility is more friendly for institutional investors or for those who thinks the price of their coins will grow in next few years and it should be stored offline wallet or decentralised exchange where only and only the wallet will activate from your private keys .
Advantage:
- safe and secured.
- better long term investment
- staking and earn
- full control by own
- convenient to gift someone.
Dis-Advantage :
- always keep hold or remember your wallet or exchange private keys.
- stressful for quick traders
- slow your desktop and mobile after install these app.
- less option for social chat
- during posting something, wrongly paste you copied private keys to be compromised .
Resources:
https://www.investopedia.com/news/what-are-cryptocurrency-custody-solutions/
https://cointelegraph.com/explained/crypto-custody-explained
https://cointelegraph.com/news/experts-consider-the-security-and-risks-of-noncustodial-exchanges
https://freewallet.org/blog/custodial-vs-non-custodial-wallet
https://nowpayments.io/blog/how-it-matters-to-be-free-of-custody/
