What is a self-custodial wallet? And why TokenPocket?

TL; DR

• Custodial, in general, means a third party holds your funds on your behalf of you. While in crypto, self-custodial means that you hold and fully control your assets.
• Custodial wallets are offered by a third party that stores your asset on your behalf of you. It is easy for users who have no knowledge of blockchain to use, but there are some disadvantages as well like they can transfer your assets without noticing you. Currently, all the centralized exchanges are offering custodial wallets for their users.
• A self-custodial wallet gives you the private key and stores it on your device only. You are the only one to control your assets.
• TokenPocket is a fully self-custodial wallet that provides secure and easy-to-use features and also rich functionalities.

Do you have control over your assets? If you are an OG in crypto, this must be an unfailing topic for you. For most common users, people will regard the assets in an account belong to us, just like a bank account. But think further, we just deposit that money on a third party, they have control over our money. This is hard in traditional business, where we deposit the money and the other people have no control over it. But things are different in crypto.

What is a custodial wallet?

Custodial wallets are almost always web-based, usually offered by centralized cryptocurrency exchanges like Coinbase, Binance, etc. The interfaces of most exchanges are carefully designed so that users do not need to interact with their on-chain wallets directly. This simple and friendly approach is generally preferred by beginners. Because they don’t have to understand blockchain concepts such as private keys.

With custodial wallets, users don’t need to interact with their blockchain wallet, usually, it’s just a change in the escrow platform’s internal ledger, which means that the transaction never happened on-chain. When you need to interact on the chain, the escrow platform will use the private key they hold to help you publish the transaction on the chain.

Another problem with custodial wallets is theft. Exchanges are known to be the holders of private keys and their services interact with the blockchain, making them a big target for hackers. As a result, billions of dollars are lost to hacking every year. If the exchange holding your private keys goes bankrupt, all your assets will be lost as well.

What is a self-custodial wallet?

A self-custodial wallet often referred to as a decentralized wallet, is a crypto wallet in which users control their private keys. Only the user can access the cryptocurrencies held in the self-custodial wallet, thus achieving the user 100% control over their assets. In addition, self-custodial wallets also provide a guarantee for increasing the security of cryptocurrencies.

On the other hand, the advantages of self-custodial crypto wallets also bring some requirements for beginners, who should have basic knowledge of backing up and restoring wallets. Self-custodial wallets also hold users responsible for the security of their cryptocurrencies. Wallet users must be responsible for the security of their private keys, so there are certain requirements for users’ wallet security knowledge.

In most cases, self-custodial wallets are controlled by a 12-word recovery phrase. Users must store recovery phrases in a safe location. For example, you can write down your recovery phrase on a piece of paper and keep it in a safe.

The recovery phrase is the most important thing for any crypto wallet as it helps to regain access to the wallet. However, anyone with a recovery phrase can access the self-custodial wallet. Therefore, users should avoid storing their recovery phrases online or sharing them with others.

Custodial vs. Self-Custodial

Reasons why to choose TokenPocket

1. A multi-chain wallet that has stably operated for more than 5 years. Supporting over 30 public chains and a few thousand EVM-compatible chains.
2. Private keys are generated and stored in the user’s device only. The user is the only one to access their private keys and assets.
3. The multitude of features, DEX, DApps, and NFT integrated. You can easily and safely surf on the blockchain.
4. TokenPocket won’t charge any fee, you will only need to pay a gas fee to the blockchain when you need to send a transaction.
5. As we always said, not your keys, not your assets. From now on, let’s start to create our crypto wallet, to completely control our assets!

About TokenPocket

TokenPocket is the world’s leading multi-chain self-custodial wallet, which supports mainstream public chains including BTC, ETH, BSC, TRON, Polygon, Solana, HECO, Klaytn, Avalanche, OKC, HSC, Fantom, Polkadot, Kusama, etc. The trinity of TokenPocket mobile wallet, chrome extension wallet, and hardware wallet has been formally formed. The Secret Recovery Phrase and Private Key are stored in the user’s own device and the user can fully control his own crypto assets. TokenPocket has provided reliable services for over 20 million users around the world. The number of monthly active users exceeds 3.5 million and the users are located in more than 200 countries around the world.

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