Coinbase, Exchanges

Is Coinbase Custodial or Non Custodial?

As one of the most popular cryptocurrency exchanges, Coinbase offers a variety of services to its users. In addition to acting as an exchange, Coinbase also provides a digital wallet for users to store their cryptocurrencies.

One question that often comes up is whether Coinbase is a custodial or non-custodial wallet.

A custodial wallet is one where the private keys are held by the service provider. This means that the service provider has control over the funds in the wallet.

In contrast, a non-custodial wallet is one where the user holds their own private keys. This means that the user has complete control over their funds and no one else can access them.

NOTE: Coinbase is a cryptocurrency platform that offers both custodial and non-custodial services. It is important to understand the difference between the two before investing. Custodial services allow Coinbase to hold and manage your digital assets for you, while non-custodial services provide you with the ability to store and manage those assets yourself.

It is important to note that when using custodial services, there is a risk of Coinbase losing or mismanaging your funds, which can lead to financial losses. Additionally, when using non-custodial services, there is also a risk of financial losses due to hacking or other malicious activities. Therefore, it is important to make sure that you understand the risks associated with each service before investing through Coinbase.

So, which type of wallet does Coinbase provide? It is actually both. When you create a Coinbase account, you are given a custodial wallet. This is because Coinbase holds the private keys for this wallet. However, you also have the option to create a non-custodial wallet.

This is done by using Coinbase’s Vault feature. With this feature, you can generate your own private keys and store them in a secure location. Only you will have access to these keys and no one else (including Coinbase).

Ultimately, it is up to you to decide whether you want to use a custodial or non-custodial wallet on Coinbase. If you value security and control over your funds, then a non-custodial option may be best for you.

However, if you are new to cryptocurrency and want an easy way to get started, then a custodial option may be more suitable.

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