Claudio Koller ยท 3/9/2023

Why are Non-Custodial Wallets so important?

Many of us have certainly heard that it is important to keep your own private keys in connection with bitcoin. But what exactly does that actually mean? How is this related to Non-Custodial Wallets and why is it so important to use such a wallet?

What are Non-Custodial Wallets?

In a wallet, not your bitcoin, but the access, the private keys, are stored.

With a custodial wallet, you place your private keys in the hands of others you trust (such as an exchange or broker). Whereas with a Non-Custodial Wallet, the private keys remain with you.

This means that the person is responsible for the security of their bitcoin themselves, rather than trusting a third party.

> Learn more about the different bitcoin wallets, as well as their Advantages and Disadvantages.

Bitcoin Philosophy = Non-Custodial Wallets

It is the Non-Custodial Wallets that are much more in line with this philosophy of bitcoin. With a Non-Custodial wallet, only you can access and control your bitcoin funds. No one else has access to it as long as you keep your private keys secret.

Non Custodial = High Personal Responsibility

Taking responsibility for managing one's own private keys is a big challenge for any person. This is especially true when larger holdings are involved.

In the article How do I create a secure backup? you will find additional recommendations on how to create a secure backup for your non-custodial wallet with the appropriate security measures.


With a non-custodial wallet, users have full control over their private keys. This means that they can ensure that their bitcoin is kept safe without a third party having access to it.

Users can keep their private keys on their own devices on a hot wallet or, for larger amounts, a hardware wallet. This ensures that the private key is offline and secure from hackers and theft.


Another advantage of non-custodial wallets is independence. Since users have full control over their bitcoin, they are not dependent on third parties. This means that they can use and trade their bitcoin anytime, anywhere without relying on the approval or support of a third party.


With non-custodial wallets, users have full control over their private keys and are not dependent on a third party. This is also in line with Bitcoin's philosophy.

However, this comes with a lot of personal responsibility for the security of your bitcoin. In case of loss or theft, your Bitcoin balance cannot be recovered. Therefore, it is important to take the right security measures.

> Learn more about how to inherit Bitcoin and how to do it properly.

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