Custodial vs Non-Custodial
Who holds the keys: a company (custodial) or you alone (non-custodial). Convenience versus sovereignty, with no third option.
A custodial service (exchange, broker, payment app) holds your crypto’s private keys for you — log in with a password, reset it if forgotten, and trust the company’s solvency and security. A non-custodial wallet puts keys solely in your hands: no one can freeze or lose your funds but you, and no one can recover them for you either.
Neither is universally right. Custody suits small balances and active trading; self-custody suits meaningful long-term holdings — the lesson repeatedly taught by exchange collapses. The mature setup most experienced holders converge on: a custodial account for liquidity, a cold wallet for savings.