The term cryptocurrency wallet is confusing because it has several different connotations depending on what you’re trying to do. Here’s a quick breakdown of some of the most common categories.
Here are some of the main cryptocurrency wallets:
A hosted (or “custodial”) cryptocurrency wallet are crypto wallets that centralized exchanges like Voyager manage on your behalf. When you set up an exchange account, they provide you with a hosted wallet to safely store your crypto for you. A hosted wallet allows you to make basic crypto transactions easily without the need to manage your own private keys (which work sort of like passwords for your crypto).
Self-custody wallets are popular with users who want to take more control over their assets and are interested in emerging crypto technology like DeFi. With these wallets, you’re responsible for securing your private keys, often with a recovery phrase. Importantly, exchanges will never have access to your private keys or recovery phrase and can’t help you recover them if you lose them. And anyone with your recovery phrase can get access to your crypto so keep it safe!
Hardware wallets like Ledger are physical devices for storing crypto. They are also self-custody, meaning the same responsibilities around securing your own recovery phrase apply. You can also think of a hardware wallet as a form of two-step authentication because the device acts as a physical key needed for completing any self-custody transactions.
Why it matters
Control of your private keys isn’t the only reason to get a self-custody wallet. Perhaps an even bigger reason is that a self-custody wallet is your passport to the entire universe of decentralized crypto apps (or dapps) that’s emerged over the last several years — in much the same way a web browser is your gateway to the internet
There is a lot of GREAT INFORMATION presented in this crypto trading bot webinar to allow you to make an informed decision on using a cryptocurrency trading bot. Using a trading bot takes a lot of emotion out of trading. Whether you join KarbonAI Elite or not, you will be a better crypto trader after watching the video. Give yourself the time.
Author makes no representation and assumes no liability as to the accuracy or completeness of the content of this article. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose.