Tech

How to Choose the Best Non-Custodial Wallet for You

7 April 2023facebook-icontwitter-iconlinkedin-icon

TL;DR:

  • As cryptocurrencies grow and evolve, non-custodial wallets are allowing more and more people to achieve real financial autonomy.

  • With the right non-custodial wallet, you’ll be able to safely and securely manage your digital assets, all while freely navigating the world of DeFi and web3 dapps.

  • Finding the perfect wallet will require you to learn more about your own needs and aligning them with a wallet that brings you the right level of autonomy, speed, security, and intuitiveness.


The growth of cryptocurrencies has revolutionized the way we look at financial freedom and self-sovereignty, and it’s safe to say non-custodial wallets (also known as self-custody wallets) have firmly stood at the center of that revolution.

Whether you plan on holding crypto for the long term or you want to leverage your funds daily inside Web3 and DeFi, you know very well you’re going to need a non-custodial wallet.

But you also know you don’t need just any crypto wallet.

To help you make an educated choice about the best self-custody wallet for you, we’ve created this comprehensive checklist of features and benefits you have to look for to find “the” wallet…

The wallet will guarantee you safety, autonomy, and a pleasant experience while managing your digital assets.

Before we start, what is a non-custodial wallet again?

A non-custodial wallet (or self-custody wallet) is a type of crypto wallet that allows you to become the sole custodian of your digital wealth by giving you access to the wallet’s recovery phrase.

As the world of crypto, Web3, and DeFi continues to grow and mature, non-custodial wallets are becoming critical tools for investors, traders, and everyday users.

A self-custody wallet gives you access to your funds at all times. This means you have the ability to sell, send, lend, store, and manage your digital assets without needing third-party approval.

You’ll be able to access your funds on the blockchain at any given moment, participate in decentralized finance (DeFi), and interact with decentralized applications (dapps) built on top of blockchain technology.

Why it matters what crypto wallet you use

The wallet you choose will determine how safe your assets are, how easily you interact with the world of digital assets, and, ultimately, your financial autonomy and success.

Unless you’re someone just dabbling in the world of crypto, you already know that your path to self-custody and financial autonomy will require you to create a non-custodial wallet.

(While custodial wallets do have their benefits, financial sovereignty can be achieved only if you have access to the recovery phrase to your wallet. Even if you choose a custodial wallet that’s reputable, there are apparent delays in transactions when you need to sell or lend your crypto assets quickly. Not to mention security, privacy, and management risks.)

Further reading: What is a Self-custody Wallet and Why You Need One

What key factors to look for when choosing the best non-custodial wallet

What factors, features, and benefits should you consider when choosing the right self-custody wallet for you?

(You’ll be able to explore a comparison chart that compares non-custodial and custodial wallets across these factors. To learn more, explore Valora’s comparison article Custodial vs. Non-custodial Wallets.)

 

Platform compatibility

When choosing the right self-custody wallet, you should make an effort to find a wallet compatible with the operating system you’ll most often find yourself on.

Will you be using your wallet on Desktop or mobile, or perhaps a web-based version? 

 

Dapp and blockchain compatibility

Think about the dapps and blockchains you plan to use. Because different wallets are designed to work with specific blockchains, you need a wallet compatible with the native platform of the dapps you plan to use.

For example, Valora is a wallet on the Celo blockchain, giving you access to a broad ecosystem of dapps and financial tools that help you swap, borrow, lend, and earn cryptocurrency.

Security

Your wallet’s security is as important as the key is to a lock. It’s one of the most crucial aspects of your journey into the world of crypto and Web3.

If you’re looking for a self-custody wallet, you’re already on the right track when it comes to finding a secure wallet. That’s because non-custodial wallets give you access to the wallet’s private keys, allowing you to secure them with additional measures.

With that said, it’s still important to choose a wallet with strong encryption, two-factor authentication, and biometric authentication.

Design / User Friendliness

Naturally, you want to make your experience as smooth and as seamless as possible. That’s why you should be looking for a wallet with an intuitive user interface that makes it easy to send and receive funds.

Just as your smartphone’s interface allows you to navigate through apps and features with ease, so should your digital wallet enable you to freely interact with the broader ecosystem of digital assets.

Hot vs. Cold storage

One of the best things about self-custody wallets is that you get to decide whether you’d prefer hot or cold storage.

Hot storage means that your device will be connected to the Internet, while cold storage means your recovery phrase will be stored offline.

Cold storage is considered safer and more secure. On the other hand, hot wallets let you buy, sell, and trade at any time and interact with dapps and Web3 applications. - If you want to secure your cryptocurrency for the long term, consider cold storage to be a pretty safe bet. - If you plan on trying out decentralized applications and using your funds on a daily basis, a hot wallet might be a much better option.

Multiple accounts

Are you going to keep all your funds in one wallet/account?

Some self-custody wallets allow you to manage multiple accounts all within the same wallet.

This can help you navigate your portfolio more easily, keep your funds organized, and separate the different types of cryptocurrencies you’re holding.

Reputation

While reputation is entirely subjective, it’s still an important factor for you to look at.

Explore user reviews, check for regular updates and maintenance, take a look at the development team, and consider the longevity of the wallet as some of the genuine factors that contribute to a good reputation and a successful track record.

Speed of transactions

While the speed of your wallet will be largely affected by its native blockchain’s network capacity and the size of the transactions, it’s still an important factor to consider, as speeds may vary greatly from wallet to wallet.

Confirmation times and transaction speeds will determine how quickly you can send and receive funds. Naturally, this makes them a crucial aspect of your wallet’s performance.

Fees and transaction costs

Some wallets might charge users high fees for transactions, while others offer lower fees at the expense of longer confirmation times for transactions.

If you’re in it for the long run, you should look for a wallet that minimizes fees at no expense to transaction speed and confirmation times.

While it’s important to strike a balance between speed and cost, a wallet like Valora that’s built on the Celo blockchain offers the best of both worlds – gas fees as low as $0.001 and near-instant transactions.

Community and development activity

Does the wallet you’re considering have an active community of users and developers constantly looking to improve? Look for wallets with active communities and engaged dev teams, as this will indicate a healthy ecosystem of people committed to continuously developing and improving the wallet.

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The Bottom Line

The first question you should ask yourself when looking for the perfect crypto wallet is what type of trader or investor you’re going to be.

Whether you’re someone completely new to crypto or a seasoned veteran with diamond hands, the perfect non-custodial wallet for you will be one that will give you autonomy, security, and a pleasant user experience as you’re navigating the exciting world of Web3.

Looking for our personal recommendation?

Explore our guide on how to create a crypto wallet, and you can start your journey with Valora today.

In as little as a few minutes, you can have your very own Valora wallet ready, where you have access to your recovery phrase, complete autonomy over your funds, and the absolute freedom to buy, sell, send, stake, and grow your crypto.

7 April 2023

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