Crypto Wallet Custody, Support, and Security Explained for Beginners

Crypto is in its heyday, and even beginners can appreciate the ability to send and receive assets at the speed of light, without borders, and peer-to-peer. Bitcoin’s bull cycle is expected to remain intact, with the flagship cryptocurrency delivering several all-time high closes in July 2025 alone. With more supportive legislation and a crypto-friendlier environment overall, interest in cryptocurrency is increasing. As more people start holding and trading cryptocurrency, having a secure crypto wallet is an essential first step for protecting and managing digital assets. A crypto wallet secures your private keys, allowing you to be in control of your cryptocurrencies and NFTs.

The Lines of Defense Against Theft and Hacking

Blockchain transactions are irreversible and impossible to recover should theft or hacking occur, making the focus on protection essential. Strong and effective wallet custody relies on constant attention to safety and security, especially in the context of cryptocurrency management. Security concerns are valid: the amount stolen from cryptocurrency services has exceeded $2.17 billion so far in 2025, Bloomberg reports, citing Chainalysis data.

Compared to 2022, the worst year on record so far, 17% more value had been stolen year-to-date by the end of June 2025. Personal wallet breaches represent an increasing share of the total losses, accounting for almost a quarter (23.35%) of all stolen assets YTD.

Secure custody, strong passwords, and multi-factor authentication are reliable forms of defense against theft and hacking. A strong password should be 14+ characters long and contain a unique mix of numbers, letters, and symbols. You should avoid using common words, addresses, birthdays, or other easily guessable information.

Hackers attempt to brute-force passwords through dictionary attacks, which involve trying lists of common patterns and passwords, or simple attacks, which affect all possible combinations. A strong password takes a deterrently long time to crack.

Two- or three-factor authentication, which is not new, adds security layers by requiring a second or a third verification method, such as a code sent to a mobile device. Activating MFA on all accounts associated with cryptocurrency, such as emails, wallets, and exchanges, will help avoid unauthorized access even if the attacker identifies the password.

Clarifying Custody: A Custodial or Non-Custodial Crypto Wallet?

Crypto wallets don’t contain funds, but a public and a private key. You initiate transactions with your public key and authorize them with your private key. A custodial wallet is controlled by a third party that’s responsible for protecting your funds, managing your wallet key, and signing transactions. Custodial wallet services or crypto exchanges generally provide wallets in the form of a mobile or web app.

Users trust the provider to store their tokens safely and implement reliable security measures to prevent breaches. These measures can include biometric authentication, such as fingerprint verification or facial recognition, cold storage, MPC, and hardware security modules.

Choosing reputable platforms that comply with the regulations in their respective jurisdictions is essential. Features such as regular security audits and insurance against theft provide additional layers of protection. The wallet provider must be registered with the respective authorities to avoid potential legal issues.

On the other hand, a non-custodial wallet leaves the responsibility of managing funds to the crypto owner. You handle transactions, manage your private key, and have complete control of holdings. Non-custodial wallets come in the form of downloadable mobile apps or browser-based wallets. You may opt for a hardware wallet, a type of non-custodial wallet, and a physical device that you can access and manage offline.

Hardware wallets are the most secure wallets as they are not connected to the internet. However, they require some technical knowledge, as you must navigate blockchain transactions and manage your keys. After you create a wallet, you will be asked to write down a seed phrase, which is a long string of randomly generated words. If you lose this phrase, you will be unable to recover your funds. What’s more, anyone with the seed phrase gains full control of them.

Key Reasons to Secure Application Programming Interfaces

APIs, or application programming interfaces, exchange information with multiple servers to obtain a wide variety of data. The newsfeed, weather apps, and updated cryptocurrency prices are all powered by APIs that interact with the data source and distribute the information to a website or a phone. Inadequate API protection can lead to service disruption, abuse, and data scraping. Ways to secure an API include IP whitelisting, simple keys, and token-based authentication.

An API is like a bridge that connects an application to a crypto wallet, playing a crucial role in sales transactions. For instance, crypto payment APIs connect the merchant page to the buyer’s wallet to facilitate the transfer of crypto funds to the seller’s wallet.

Choosing Between Hot and Cold Wallets

Even beginners are familiar with the concept of hot vs. cold crypto wallets. Hot wallets are connected to the internet, making them a suitable option for users who need instant access, but this convenience is associated with higher security risks. Hackers target hot wallets through exchange breaches, malware, or phishing. If you opt for a hot wallet, avoid using unencrypted or public Wi-Fi networks because they can reveal wallet details to interceptors.

Forms of cold storage, where private keys remain offline, include hardware wallets, physically isolated computers, and paper wallets, in which hacking becomes practically impossible. Cold wallets are best for high-value investors and long-term holders who prioritize security.

Around-the-Clock Support Gives New Users Peace of Mind

As a beginner, you’re recommended to seek out a service that offers 24/7 customer support via email or, ideally, 24/7 live support. You will also benefit from a detailed FAQ section and a blog with easy-to-digest, beginner-friendly posts. Few things are worse than taking to social media to seek help for technical support issues, such as losing access to a crypto wallet or forgetting a private key. Such posts attract fraudsters who might impersonate official support.

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