tl;dr
Clearly, I will have to make a couple of videos to explain the difference between all of the wallets. There are custodial wallets and non-custodial wallets.Centralized exchanges are Coinbase, FTX, Binance, Crypto.com, Robinhood etc. are all examples of custodial wallets, meaning they hold coins for ...
Clearly, I will have to make a couple of videos to explain the difference between all of the wallets. There are custodial wallets and non-custodial wallets.
Centralized exchanges are Coinbase, FTX, Binance, Crypto.com, Robinhood etc. are all examples of custodial wallets, meaning they hold coins for you, and they also hold the private keys.
Non-custodial wallets are where you hold the coin and the keys directly. This means you do not have a service standing between you and your crypto. There are different flavors of non-custodial wallets: web-based or browser-based, mobile and cold storage devices. Each serves a purpose and can be used for various reasons. Non-custodial wallets are also anonymous since anyone with the keys can be the owner and can change hands without using names, etc.
A web-based/browser-based wallet is exactly what it sounds like. I use MetaMask which is a browser-based plugin I log in and see what is in my wallet. The convenience of this type of wallet is that it can securely connect to various platforms where you can use or acquire crypto. This is a non-custodial wallet, and you are in control of your keys and your crypto.
A Mobile wallet runs on your mobile phone and is also non-custodial. Coinomi, Coinbase Wallet, Trust Wallet, etc. are examples of mobile wallets. Their functionality is much like browser-based wallets, but on your mobile phone. They are very convenient since they do not require you to be glued to a computer to use them.
A cold wallet is a hardware wallet, like Ledger Nano. This is a wallet that connects locally to a computer or mobile device so you can see what is currently on the wallet. Many use this type of wallet for very long-term holding. This is one of the most secure ways to hold crypto and is also anonymous.
Do your own research on the various wallets that are out there and make sure they do what you need them to do. For example, not all wallets can work with all coins. Make sure you are getting the wallet from a reputable place. There are a lot of imposters out there. So, you must be careful with what and who you work with. There are a lot of criteria I use to determine what wallet I may use: security, coins it works with, other platforms it connects to, ease of use, etc.
Once you have chosen your wallets you want to audit them regularly. Check to make sure they are still secure and that all of your coins are still there. Make sure they still work with platforms you need. Basically, you are verifying the parameters you used to choose them still hold true. You may have also come up with new parameters. At the end of the day, your choices should be fit for purpose.
I hope this helps!