Home Reviews Wallet What Is a Non-Custodial Wallet? Part 2

What Is a Non-Custodial Wallet? Part 2

Non-custodial wallets are in high demand at the moment. Especially the collapse of FTX proofs the need for a non-custodial wallet.

what is a non custodial wallet

Non-custodial wallets are currently the safest crypto wallets available. You keep control over the keys. Not your keys, not your coins. This is Part 2 of our explanation about non-custodial wallets. Here’s Part 1.

So, let’s look at 4 new questions about what a non-custodial wallet is.

How to Create a Non-Custodial Wallet?

There’s a wide variety of non-custodial wallets. You will need to make a choice if you want a software or hardware wallet. It’s also possible to have both! A software wallet connects to the internet or Wi-Fi. So, they are web-based, and we also refer to them as hot wallets. On the other hand, a hardware wallet doesn’t do this. This is why we refer to them as cold wallets. However, setting up a non-custodial wallet works almost the same for both options.

 

There’s a difference, though. Almost all software wallets are free to download. In contrast, you will need to buy a hardware wallet. 

So, here is a list of steps to follow for creating a non-custodial wallet.

  • Choose your preferred wallet. For example, MetaMask, Trust Wallet, Phantom, or a Ledger.
  • Install on your mobile or browser, or both.
  • Create an account. You may need a password as well.
  • Copy your recovery or seed phrase. Make copies and store them in a safe place. Do NOT share this recovery phrase. Everybody with access to your recovery phrase also has access to your assets.
  • Extra security layers may be an option. For example, 2FA or biometrics.
  • You’re all set, you can start trading, sending, or receiving crypto or NFTs.

Make sure that you read the instructions carefully for each wallet. There may be slight variations in the set-up procedure. For example, some wallets use a 12-word recovery phrase. Other wallets may use 24 words.

The Best Non-Custodial Wallets for Bitcoin

The best non-custodial wallets for Bitcoin are cold storage hardware wallets. As already mentioned, they don’t connect to the internet or to Wi-Fi. Here are a few options.

  • Ledger Nano X — This is the most popular hardware wallet around. You connect your wallet with a USB cable to your computer and need to install Ledger Live. This is your dashboard that allows you to access any Ledger product. The Nano X is the flagship product. A good and cheaper alternative is the new Nano S Plus model.
  • Trezor — Their T model is the top model. It offers all the features of the Model One, except that it also boasts a large touchscreen. As a result, you can enter the seed phrase straight into the wallet. You don’t need to go through a computer. This reduces the chances of getting hacked through your computer. Both Trezor and Ledger have a good reputation.
  • SafePal — The first hardware wallet back by Binance Labs. We recently wrote a dedicated article about SafePal. Among others, they offer unlimited currency storage. 
  • BitBox — This is a multi-sig hardware wallet. They use a unique backup system. It uses a micro SD card for this. It’s also a wallet that you can set up quickly.
  • Coldcard  —  They also use a SD card for back-up. However, they only accommodate BTC. It offers great security with decoy wallets and lock-out timers. It works with an air-gapped system, just like SafePal. This means that there’s no need to connect to an internet or Wi-Fi-connected device, like a computer.

The following video is made by Ledger and explains why you should keep your crypto on a hardware wallet.

Best Non-Custodial Wallet With Staking

It should come as no surprise that the abovementioned hardware wallets allow staking. So, you can use them, and they come highly recommended. However, we would also like to give you some alternatives. Most are all hot wallets, that connect to the internet or Wi-Fi. For example,

  • Coinomi — This is a free downloadable wallet for mobile and desktop use. It supports a built-in exchange and has zero fees. However, it doesn’t offer 2FA and has a closed source code. 
  • MetaMask — The MetaMask wallet is the most popular crypto-staking wallet. They support all ETH-based tokens, like ERC-20 or ERC-721. MetaMask is non-custodial but is also a hot wallet. 
  • Atomic Wallet — This is a cold software wallet and is available as a free download. However, your device keeps all passwords and data. So, the moment you connect your device to the internet, your Atomic Wallet is also connected.
  • Trust Wallet — Another popular hot wallet choice. As an extra security layer, they offer a fingerprint and PIN scanning option. Binance has owned this wallet since 2018, and it’s user-friendly. Staking is only available for popular coins.

Best Non-Custodial Wallet for XRP

There are a few non-custodial wallets available for XRP. Most or all wallets, already mentioned, will accept XRP. However, here’s a list of a few extra wallets, that proof to be good choices for XRP.

  • Electrum — You can integrate this software wallet with some hardware wallets. For instance, Ledger or Trezor. 
  • Edge Wallet — If you’re looking for a mobile wallet, Edge Wallet is a suitable option. This wallet has advanced security options. It also allows you to spend your crypto with it.  Edge offers FaceID and TouchID login.
  • KeepKey — This is an offline hardware wallet. It doesn’t have a built-in exchange, but connects to the ShapeShift exchange. However, it offers a limited number of coins and has few other functions to offer. In other words, a limited option. The picture below shows a KeepKey hardware wallet.
non-custodial wallet
KeepKey website
Conclusion

This is Part 2 on explaining what non-custodial wallets are. We answered 4 popular questions, related to non-custodial wallets.

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