Topic: How safe is a custodial wallet to a hardware wallet - page 3. (Read 363 times)

It is a good thing to see that as a newbie to buying bitcoins, you are already taking the safety of your bitcoins seriously. A hardware wallet is the first option for optimally keeping your bitcoins safe but it is not affordable to everyone, and usually recommended for people who have a large amount of bitcoin, not really newbies in bitcoins who just purchased a small amount. As a new person in bitcoins, a non-custodial wallet can work for you so far as you practice safety measures until you can afford a hardware wallet.

There are many things you should not buy as fairly used or second hand, and a hardware wallet is one of them majorly, no matter how cheap.

Custodial vs. Non Custodial Wallets - "Not your keys, not your coin" Explained.
[General] Bitcoin Wallets - Which, what, why?

Custodial wallets are like exchange, online accounts and you only have a public address that is given to you by that exchange, that online platform. You don't own a private key of that public address, so you rely on that platform to receive and spend your bitcoins. It's not your coins, it's that platform coin.

Non custodial wallets are different and you own its private keys, you own your coins. You are completely free to do everything you want with your coin with coin control features.

Hardware wallet is most recommended because when you spend your coins, you don't have to leak your private key to Internet, so no risk to be hacked. Of course, there are back doors if you buy second hand hard ware wallets from bad people.

the feeling of putting your money or cryptocurrencies inside a custodial wallet is the same feeling as going inside a comfort room and being watched by a CCTV camera. what's the hardest part about those custodial wallets is that, they can implement their own rules to their platforms and you didn't have any choice but to abide those laws. in my case for example, here in our country there are only few providers of custodial wallets, and all of them will be asking for your verified identity or ID/KYC for you to be verified and to be able to use their platform. even if I personally don't have issues on providing personal information, what i am heavily concern is that, they will attach limits on your account depending on what level of verification you have. there are even cases here that even if they provided their information they are not yet verified or their account is still under review for the sake of "user security" which is just utter b*llsh*t, and if you mistakenly transfer your money on that wallet, you won't have any choice but to verify it since you cannot withdraw it unless the system recognized you as a verified user.

providing personal information alone has already become a huge problem, there was this one friend of mine, who's account got locked due to him being unemployed but he transferred big amount of money from an exchange. i speculated that maybe the wallet provider thought that he is laundering money, and because of that incident other wallet providers here will require us to tell them what or where is the source of funds came from and they will still put limits on that, if we exceed that limits either the account will be in question or it will be locked forever, the worst part is that since you provided personal information initially, there is a high chance you'd get arrested if you cannot provide proper explanation.

now compare that to non-custodial wallets or hard wallets? you can just easily plug in/out anywhere and transfer funds without worries other than transaction fees.

You already admitted to seeing a few posts here that talk about how unsafe it is to save your coins in a custodial wallet. 
Just grab yourself a hardware wallet from a trusted seller and set it up. If you can't also grab a hardware wallet for now, for the time being, I will recommend you try using the Electrum mobile or desktop wallet; it's kind of safer from there. 

Just as @OmegaStarScream has said above, every coin held in a custodial wallet is to some point not yours; they can be frozen, stolen, or sometimes you might be restricted from having access to them because the service providers of those custodial wallets can decide what ever they want to do with your funds.

Custodial wallets are the worst type of wallets you can use.
When you're using that, you're trusting someone else to keep the funds safe for you (from hacks when someone is targeting that service's hot wallet directly or your personal account, the wallet provider running away with the funds, etc.).

You don't have to deal with any of that when using an HW. But make sure you're buying the wallet directly from the manufacturer, and keep your seed phrase somewhere safe.

I recently purchased some Bitcoins butAccording to most posts and replies on this forum it seem the best way to hodl Bitcoin is to use a hardware wallet as long as you can keep it safe.
Well is the hard ware wallet better than a custodial wallet??