The advancement in blockchain technology has brought a revolution in the world. This advancement has introduced us to digital money, also known as cryptocurrency. The popularity of these currencies is growing far and wide. It is expected to have a promising future, opening a wide range of investment opportunities.
Trading and exchanging these currencies is impossible without crypto wallet. They are held securely by these wallet and managed using them. They have been divided into custodial and non-custodial wallet with distinct features and functionality. In this blog, we will cover custodial wallet, their types, risks and benefits, and the future of these wallet.
Custodial wallet, as the name suggests, are wallet in which a third party holds private keys. Third-party has the authority to manage the keys, sign the transactions and protect the users’ assets. Coinbase, Kraken, and Binance are popular examples of custodial wallet.These are technical products so they are developed with the guidance of custodial crypto wallet providers who can customize the product as per your preferences.
The crypto wallet development market has grown significantly in the past few years. The capital of this segment escalated in 2021 and continues to startle investors and traders in the present times. Therefore, enterprises will introduce new and innovative wallet with the rise in wallet users. As per ZionMarketReseach, the wallet market will rise to 686 million in the next 6 years.
Crypto custodial wallet performs the main role of storing and managing digital assets. We store digital assets in physical wallet, which don’t hold crypto assets. These wallet hold the seed phrase or private keys that help to access or retrieve the wallet content. Losing the wallet keys would mean losing control over the currency.
1. Conversion Rates Updates
Due to constant volatility, the currency rates keep updating. The application is synced with blockchain networks and reveals the latest information on conversion rates while the transactions are taking place.
2. Cross-Platform Compatability
Crypto custodial wallet can be launched on platforms like Android and iOS simultaneously. This is only possible with ReactNative, where one code base is used to develop two applications.
3. Unique Access Key
Every wallet has unique public and private keys. The third parties hold these keys and are entered to initiate the transaction process.
4. Supports Numerous Currencies
The increase in cryptocurrencies has led to a surge in demand for multi-currency-supported wallet. This gives investors and traders with a diverse portfolio of assets to be stored at a single location.
5. Multi-Chain Support
You can deploy the crypto wallet on blockchain platforms of your choice.
6. Payment Gateways
You can make merchant payments using cryptocurrencies. The platform helps you convert cryptos into fiat currency.
7. QR Code
QR codes are used to perform transactions, receive digital assets, log into the crypto wallet application, authorizing a user or carry out any other functions.
8. Combining with Crypto Exchanges
Several wallet can be connected to a web version of a decentralized exchange or NFT marketplace to purchase or sell assets.
Staking has become crucial to popular platforms like Binance and CoinBase.Cryptos are stored to maintain network performance and give a chance to earn passive income.
Like other wallet, custodial wallet don’t charge any wallet fees from users. This helps you save money and perform crypto transactions without paying any charges.
These wallet offer a high-end user experience to help you access the wallet without concerns. The wallet navigation is so simple that first-time and experienced users can use it without any hassle.
As discussed earlier, the funds and private keys are handled by third parties. This creates a transaction backup. Also, you can undo or restore a transaction with the assistance of a wallet provider.
Once you lose private keys, the exchange authority can help you regain access to the wallet. No need to worry about authority issues while getting the keys, as the intermediaries are helpful.
In case of crypto custodial wallet, all the sensitive data is held by hot and cold storage. These wallets, when left unattended, are susceptible to hacks and breaches. Strong security approaches can prevent the wallet content from unauthorised access.
Apart from strong security practices, you can enhance asset security in the following ways:
1. Set a Strong Wallet Password
Make sure that you set a strong password to protect your currency from intruders.
Two-factor authentication is a unique code generated and must be entered while logging into the device to help you access the wallet securely.
Don’t click on unknown links online, as hacks create them to access wallet contents.
Binance is a popular type of crypto custodial wallet. You can extract funds from Binance Smart Chain wallet accounts and send them anywhere. Using the platform, you can connect with the wallet accounts speedily. This saves time to copy-paste the address before performing the transactions.
FreeWallet has been created to simplify the crypto specifics and access process. It is basically a multi-wallet app with a web interface and holds more than 20 currencies of Android and iOS.
BitGo tops the custodial wallet list and allows users to navigate the digital asset landscape. It offers a connected and secure solution which makes it reliable. The platform has been developed on a robust technological foundation in the market.
Bitmex helps you manage cryptocurrencies in a hassle-free way. It is one of the advanced crypto trading Bitcoin wallets. This crypto custodial wallet takes steps to help users have a safe wallet experience. It is a high-rated trading platform that gives maximum returns on investment.
Both custodial and non-custodial wallet are excellent investment options. Most enterprises prefer to harness the capabilities of both wallet in distinct situations. If you cannot take responsibility for the crypto assets, allow third-party to handle it on your behalf. On the other hand, if you wish to have complete control over the assets, then investing in a non-custodial wallet is the best course of action.
The process of custodial crypto wallet development has been divided into steps. After completing these steps, you will get a robust and scalable solution. Let us look at them:
#Step 1: Project Analysis
The process of developing a simple or complex application begins with project analysis. Discuss your ideas, define the target audience, choose features and state references, budget and timeframe of crypto wallet development.
#Step 2 : Create a Design
Share some designs, as they will serve as a reference for future apps. Once the design has been developed, it is shared for feedback and alterations are performed based on the feedback.
#Step 3 : Developing a Web or Mobile Application
Search for developers working on architecture and interface both from the client and server side.
#Step 4 : Test the App
Testing helps you control every aspect of the application. The testers will identify and fix bugs before releasing the app’s final version.
#Step 5 : App Release & Feedback
Launch the application and get feedback from the users. Keep on updating the application from time to time.
With the right skills, you can create a wallet by yourself. If you cannot do so, consulting custodial crypto wallet development professionals will be the suitable course of action.
If you are planning to develop a custodial wallet partner with Antier.We have delivered world-class and robust solutions for over 250 enterprises globally. Our subject matter experts and seasoned blockchain engineers know how to develop custodial wallet from scratch also, we are known for providing white-label wallet solutions with high-graded security and features that perform exceptionally well.
Schedule a free demo or a no-cost estimate with our subject matter experts to learn more about creating a custodial wallet.