Are there any risks associated with using a non custodial wallet for storing cryptocurrencies?

3 answers

• Edouard CourtyOct 26, 2021 · 4 years ago
  Using a non custodial wallet for storing cryptocurrencies can come with certain risks. One of the main risks is the possibility of losing access to your funds if you forget or misplace your private keys. It's important to keep your private keys safe and backed up in multiple secure locations to minimize this risk. Additionally, non custodial wallets are more susceptible to hacking attempts compared to custodial wallets provided by exchanges. It's crucial to choose a reputable and secure wallet and regularly update its software to protect against potential vulnerabilities. Lastly, non custodial wallets do not offer the same level of customer support and protection as custodial wallets. If you encounter any issues or become a victim of fraud, it may be more challenging to recover your funds. It's essential to educate yourself about the best practices for using non custodial wallets and stay vigilant to minimize these risks.
  935

  468
• Renan SouzaSep 10, 2020 · 5 years ago
  When using a non custodial wallet for storing cryptocurrencies, there are some risks to consider. One of the risks is the potential for human error, such as entering the wrong address when sending funds or falling victim to phishing attacks. It's important to double-check all transaction details and be cautious of suspicious emails or websites. Another risk is the lack of insurance coverage. Unlike custodial wallets provided by exchanges, non custodial wallets are not typically insured against theft or loss. It's advisable to only store a small amount of funds in a non custodial wallet and keep the majority of your holdings in a more secure offline storage solution. Additionally, non custodial wallets may not support certain cryptocurrencies or have limited functionality compared to custodial wallets. It's important to research and choose a wallet that meets your specific needs and preferences.
  907

  303
• Avraj AccountingJul 05, 2021 · 4 years ago
  Using a non custodial wallet for storing cryptocurrencies can be risky, but it also offers certain advantages. Non custodial wallets provide users with full control over their funds and eliminate the need to trust a third party with their assets. However, this control comes with responsibility. Users must take precautions to secure their private keys and protect against potential risks. It's recommended to use a hardware wallet or a well-established software wallet with strong security features. Regularly updating the wallet software and keeping backups of private keys are essential practices. Additionally, staying informed about the latest security threats and following best practices, such as enabling two-factor authentication, can further enhance the security of using a non custodial wallet.
  805

  202