"Traditional Banks Vs Custodial Wallets"

Assalam O Alaikum

Hello dear friends! Well come to my post. How are you all? I hope you will be doing well by the grace of Almighty Allah. I'm also fine and enjoying my day. Today I'm here to share my knowledge with you about the topic "Traditional Banks Vs Custodial Wallets" in this Steem Alliance. So let's start without any more delay of time.

---

_{Created With Canva}

---

Friends, in the landscape of finance and digital currencies, the custodial wallets and traditional banks emerged as a transformative force due to their enormous benefits. With the rise of digital technology and digital currencies, the custodial wallets have changed the financial systems by converting traditional currencies into digital currencies and then keeping them in the custodial wallets instead of traditional banks.

These both methods servers as the guardians of assets as they help us in saving our money in both traditional and in digital form. But they are quite different from each other in terms of security, privacy and reliability. Since the past few years, the digital assets have been proved as the cornerstones for the global financial systems due to their unique benefits and security features.

---

_Pixabay

---

This is because, the financial banks provide us a lot of benefits include the money saving, loans, credit facilities and insurance of our assets. The banks are regulated and managed by different authorities on the basis of governmental policies and regulatory frameworks. These things increase the security and reliability of banking systems because they are backed by different governmental schemes such as Federal Deposit Insurance Corporation (FDIC).

Besides all these things, the key advantages of banks are their established, reputation and security because the people believe that their money is safe in their banks account and they have a full control over it. So in this regard, they can withdraw their money anytime they want through the ATMs and from the banks also. The banks provide these facilities in a wider range by establishing their branches in different parts of the country.

Furthermore, the banks provide us an opportunity to manage our assets through online means, sitting in our houses. This is because, the banks offer us to manage our assets through their banking apps through them, we can do online transactions in the form of online payments, pay utility bills and online tickets as well. But besides all these advantages, the banks also have many significant disadvantages.

---

_Pixabay

---

In them, bank robberies, thefts, frauds and governmental policies can be a real threat to our assets which we think are saved in the banks. Also we may have to pay a large amount of fees on validating transactions seamlessly and quickly. But since the past few years, the digital wallet has been emerged as an alternative way of managing our assets by converting them into the digital currencies.

This is because, the use of cryptocurrencies are getting a huge attention of people across the globe as they are the need in that era filled with technology. So we can say that the custodial wallet is a digital wallet where we can save and manage our assets through the Private keys of our wallet. In this way through these wallets, we can send, receive and manage our assets without the need of any central authority just like traditional banking systems.

---

_Pixabay

---

Here the digital wallets provide us a full control over our assets and we can do anything with them within seconds through the strong internet connection and a safe digital wallet. In addition, the custodial wallets provide us a user friendly interfere because they are very easy to use. In them, the main thing is the security of our keys because all the functions of our wallet depends on these private keys so if we lose them, we will lose our wallet and the assets present in them.

Also these wallets, provide us an asset swapping opportunity through which we can convert our assets onto other. For example, we can swap USD to Ethereum our BTC etc. We can also trade our assets directly with others through the digital wallets. Despite all these advantages, the custodial wallets also contain risks which can affect our assets negatively. So it is very important to do your own research before diving into them.

What is Defi?

In conclusion, we can say that the both traditional banks and digital wallet comes with several advantages and significant challenges also. So it all depends upon the people who want to take the services of banks or custodial wallets. The traditional banks offer us a level of security, privacy and reliability and also many other financial services. But the digital wallet take us to the world of digital currencies and ecosystem of financial systems.

---

Written by @abdullahw2

---

---

Thanks All ❤️

---