Incessant hacks of crypto exchanges have driven crypto investors to find new ways of keeping their crypto safe and as it seems, some users have found solace in decentralized wallets and they have no plan of turning to digital asset platforms, who offer custodial wallets, for storing their cryptocurrencies.
Industry media platform MYCrypto.com collaborated with mobile blockchain startup Ambo to conduct a survey on the various money management and wallet applications used to keep crypto safe. The survey was conducted on 200 crypto customers, and while it did make a wide array of discoveries, one that was particularly striking was that a lot of them didn’t trust platforms like Bitfinex to secure their assets.
According to the survey released by MyCrypto, 66 percent of the respondents reported making use of non-custodial wallet apps. The report went on to reveal that most of these people were either those who had a working understanding of the concept of decentralization, or people who just didn’t trust crypto exchanges to hold their assets.
In addition to that, only 37 percent of the survey’s respondents reported to managing their non-crypto assets with the use of mobile wallets.
Custodial v. Non-custodial wallets
For better clarity, custodial wallet help users store their assets on servers without providing them with access to private keys. This is what you find on most crypto exchanges. While they provide users with the ability to reset their passwords in case of a hack or any form of loss, the problem with using these services is the amount of control they possess. They can literally freeze your assets at any point.
On the flip side, a non-custodial wallet will hand the control of your funds to you, while providing non-server solutions. As expected, while these wallets provide you with full control over your assets, losing your login details could be fatal.
What type of crypto investor are you?
While a lot of wallet applications and exchange work as custodial services, they have been able to become more popular because a lot of crypto investors see cryptocurrencies as investment vehicles. As such, they require their assets to be safer and redeemable- even if they lose their passwords.
According to the report, most people who don’t trust custodial services see crypto as a store of value, and as such, they prioritize asset functionality much more than its security.
Concluding, the report says:’
“While it appears that crypto applications are alive and well, 46% of those surveyed see crypto as a long-term investment which allows us to concur that from a mobile app and money management standpoint there is room to grow in the development of wallet security that promotes long-term protection.”