🔸Non Custodial

One of the first conundrums faced by cryptocurrency beginners is the wallet , a place where all digital assets are "stored". Technically speaking, unlike money in a physical wallet, cryptoassets do not reside inside a digital asset wallet. Understanding cryptocurrency wallets is therefore a prerequisite for anyone who wants to participate in the rapidly growing decentralized cryptocurrency-based financial system.

Every cryptocurrency wallet has two main components:

• Public key: If you want to send cryptocurrencies to someone, you will need to know their public key and vice versa.

• Private key: The private key, as the name suggests, must be kept secret/private by the wallet owner. A wallet owner needs to sign off on any transaction that moves digital assets from a wallet using the private keys.

Wallet keys can be stored on the Internet or on your computer via the wallet software. The keys can also be printed/written on paper or stored on a hardware device. As a result, cryptocurrency wallets can take different forms.

Custody portfolio

Before diving into the discussion of the different physical/software forms a digital wallet can take, it is important to understand the difference between custodial and non-custodial wallets.

The former is essentially where a cryptocurrency investor entrusts a third party with the management/protection of their wallet keys. This third party takes on the role of "custodian," tasking them with preserving the cryptocurrency owners' property. Accounts at cryptocurrency exchanges comprise most custodial wallets. For example, let's say a new cryptocurrency investor creates an account at a major cryptocurrency exchange like Binance or WalletVPN. Imagine they buy cryptocurrency, but decide to leave it in their exchange account.

Their cryptocurrency is held in a custodial wallet by Binance/WalletVPN, which now takes responsibility for managing the wallet keys. The growth in popularity of custodial wallets is also increasing amid rising investor interest in cryptocurrency investment products. Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) of digital/cryptoactive assets continue to secure approval around the world. The issuers of ETFs/ETPs act as custodians of investors' funds, including in the case of cryptocurrencies. This means that they take responsibility for managing the keys to the portfolio in which the investors' cryptocurrencies are being held.