Do you know what custodial crypto is? Can you name the key differences between custodial and non-custodial NFTs? If not, this explainer is for you.
and paying a fee to mint crypto that represents a valuable asset. After that, this digital item can be sold, traded, or gifted as an NFT.
Every crypto wallet has two main components: a public key and a private key. The ownership of any digital asset is linked to a public key. A crypto wallet’s public key is considered to be a wallet address, an identifier of the wallet that can be shared like a traditional account number. NFT wallets can be either custodial or non-custodial. Some wallets provide users with access to their wallets but do not store keys. Other wallets give users full control and access to their NFTs, providing full access to the private key.
The biggest pitfall of using a custodial wallet is a lack of autonomy and a loss of anonymity since users are often recommended to fulfill Know Your Customer requirements that verify users’ using personal documents like passport, driving license, etc.A non-custodial cryptocurrency wallet gives a wallet owner complete control of the safety of the crypto assets by storing the private key
The main drawback is the possibility to lose funds forever if the users lose or forget the backup mnemonic phrase. Also, non-custodial wallets can be less user-friendly for new users who aren’t familiar with crypto specifics.
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