Two modes even people “already in crypto” mix up.

Custodial — the service holds the keys. An exchange, a web3 login via email, a “wallet” inside a banking app. You see a balance, but a transfer needs their permission.

Non-custodial — you hold the keys. MetaMask, Rabby, Phantom, Tonkeeper, Ledger. The service cannot move coins until you sign.

When custodial is fine

Buying crypto with fiat, a quick pair swap, holding pocket change. That is Bybit, BingX and almost every exchange. Convenient. The cost: you trust the firm, KYC, their cold wallets, and the hope that withdrawals do not close on a Friday night.

When you want your own

DeFi, NFTs, Telegram gifts, a long hold, an amount you would hate to lose to someone else's account. Your own wallet means the non-custodial types: extension, phone, hardware.

A simple rule: the exchange is the door into the market. Your address is the safe. The safe does not have to live in the same building as the till.

How to tell in ten seconds

  1. A 12- or 24-word seed shown once at creation — almost certainly non-custodial.
  2. Email and password, “forgot password — we emailed you” — custodial.
  3. A withdrawal “to an address” that hits the network in minutes — you are leaving the exchange for the non-custodial world.