1. Custodial vs. Non-Custodial

Simple Definition:

The core difference is who controls your private keys - you or a third party.

Custodial Wallets

  • Your private keys are managed by someone else, like an exchange or fintech app.

  • You access your funds through a username/password, not a seed phrase.

  • If the platform is hacked, or freezes withdrawals, you’re at their mercy.

✅ Pros:

  • Easy to use (like using a bank app)

  • Ideal for beginners or quick trading

  • Can often recover accounts with email

❌ Cons:

  • You don’t really own your crypto (“Not your keys, not your coins”)

  • Vulnerable to exchange hacks (e.g., Mt. Gox, FTX)

  • Subject to KYC, surveillance, and frozen funds

Non-Custodial Wallets

  • You own and control your private keys.

  • You’re in charge of securing your seed phrase.

  • No middleman: Full sovereignty, full responsibility.

✅ Pros:

  • True ownership

  • Censorship-resistant

  • Required for DeFi, NFTs, airdrops

❌ Cons:

  • Lose your seed phrase = lose your crypto forever

  • No customer support

  • Steeper learning curve

2. Hot Wallets vs. Cold Wallets

Hot Wallets

  • Connected to the internet

  • Used for daily transactions, trading, DeFi, NFTs

Examples:

  • MetaMask (browser wallet)

  • Phantom (Solana)

  • Trust Wallet (mobile)

  • Rainbow (Ethereum mobile)

✅ Pros:

  • Convenient

  • Fast access

  • DApp (DeFi/NFT) compatible

❌ Cons:

  • More vulnerable to hacks, phishing, and malware

Cold Wallets

  • Stored offline = no internet connection

  • Safest form of crypto storage

Types:

  • Hardware Wallets - USB-style devices (Ledger, Trezor)

  • Paper Wallets - Printed private keys

  • Air-gapped Devices - Isolated computers

✅ Pros:

  • Immune to online attacks

  • Ideal for long-term HODLing or large amounts

❌ Cons:

  • Less convenient for frequent use

  • Need to keep device secure and updated

3. Private Key, Seed Phrase, Hardware Wallets

Private Key

  • A long alphanumeric string that gives you control of a wallet

  • Like the password to your crypto (but longer and cryptographically secure)

  • Keep it secret — if someone has it, they can drain your funds

Seed Phrase

  • A 12- or 24-word recovery phrase that can recreate your private key

  • Generated when you create a non-custodial wallet

  • Universal standard: Can restore your wallet on many platforms

Example:

simple energy dragon bamboo protect build refuse gentle piece skate modify gift

Whoever holds this phrase owns the wallet. Period.

Hardware Wallets (Ledger, Trezor)

  • USB-like devices that store your private key offline

  • Even when connected to a computer, the private key never leaves the device

  • Confirm all transactions on the hardware screen

LEDGER

  • Popular, secure

  • Supports many tokens

  • Ledger Live app integration

TREZOR

  • Open-source

  • Simple interface

  • High reputation for Bitcoin holders

4. How to Use DEXs (Decentralized Exchanges) like Uniswap, 1inch

What’s a DEX?

  • A platform that lets you swap tokens directly from your wallet

  • No KYC, no account, no middleman

Uniswap (Ethereum)

  • Most popular DEX on Ethereum

  • Uses liquidity pools to enable swaps

  • You just need a wallet (MetaMask, WalletConnect)

HOW TO USE:

  1. Go to uniswap.org

  2. Connect your wallet

  3. Select token to swap from and token to swap to

  4. Approve the token (first time only)

  5. Click “Swap” and confirm in your wallet

  6. Pay gas fees (ETH) - fees vary based on congestion

1inch (Aggregator)

  • Searched multiple DEXs for best price + lowest slippage

  • Great for large or rare token swaps

  • Same wallet-connect process

Tip: Always double-check token addresses on CoinGecko or CoinMarketCap to avoid fakes.

What Are You Paying?

  • Gas Fees: Network fees (ETH, MATIC, etc.)

  • Slippage: Price movement between start and end of swap

  • Approval Transactions: One-time cost to allow smart contracts to use your token

5. Avoiding Phishing, Rug Pulls, & Scams

Phishing

  • Fake websites or DApps that mimic real ones

  • Goal: Trick you into giving up your seed phrase or signing a malicious transaction

Tips:

  • Bookmark official sites

  • Never click wallet popups unless you initiated them

  • Never enter your seed phrase on a website

  • Use a browser wallet with phishing protection (like MetaMask)

Rug Pulls

  • Crypto project that launches hype, takes in money, and then disappears or dumps the token

  • Common in meme coins and fake DeFi projects

Red Flags:

  • Anonymous team

  • No audit or GitHub code

  • Unrealistic APYs (“10,000% ROI!”)

  • No long-term roadmap

  • No real use case

Scam Tactics to Avoid

Fake Airdrops

  • Description: Click bait to steal keys

  • Avoid It By: Never connect wallet randomly

Discord/Telegram DM

  • Description: Fake admins asking for info

  • Avoid It By: Never share private info

QR Code Scams

  • Description: QR code links to drain wallet

  • Avoid It By: Use only trusted scanners

Google Ads Scams

  • Description: Fake sites ranked above real ones

  • Avoid It By: Always type URL manually

Summary

Custodial Wallet

  • Core Idea: Third-party controls keys

  • Pro Tip: Good for beginners

Non-Custodial Wallet

  • Core Idea: You control keys + seed phrase

  • Pro Tip: Use for DeFi, NFTs, long-term investing

Hot Wallet

  • Core Idea: Online, fast access

  • Pro Tip: Use MetaMask or Phantom

Cold Wallet

  • Core Idea: Offline, ultra secure

  • Pro Tip: Use Ledger or Trezor

Private Key

  • Core Idea: Cryptographic password for your wallet

  • Pro Tip: Never share it

Seed Phrase

  • Core Idea: Recovery phrase for wallet access

  • Pro Tip: Write on paper, store offline

DEX (Uniswap, 1inch)

  • Core Idea: Swap tokens directly from wallet

  • Pro Tip: Always verify token addresses

Phishing/Rug Pulls

  • Core Idea: Common scams in crypto

  • Pro Tip: Use security hygiene, verify sources