Decentralized Wallets

Why do you need a decentralised wallet?

You may want a decentralised wallet if you value control, flexibility, and independence from third-party custody. Exchanges are useful for buying, selling, and trading, but they are custodial by design, meaning the platform holds the keys and you access funds through your account. A decentralised wallet shifts that control back to you. This can be useful if you want to withdraw funds off an exchange, manage assets across multiple chains, access decentralised exchanges, or use DeFi tools without asking permission from a central provider. It can also be beneficial for privacy and resilience, because you are not relying on one platform’s operational decisions, outage risk, or account restrictions. That said, decentralised wallets are not a “set and forget” solution. You need to protect the recovery phrase, stay alert to phishing attempts, and understand approvals when using dApps, because self-custody removes the safety nets that come with custodial services. 

You keep control of your assets rather than relying on an exchange

You can connect to DeFi, dApps, and decentralised exchanges more directly

You reduce exposure to third-party account restrictions and platform risks

You gain flexibility across networks and wallet apps

You must manage your own security, backups, and recovery phrase

 

How do I know if a wallet is truly decentralised and non-custodial?

A wallet is truly decentralised (non-custodial, self-custody) when you control the private keys and the provider cannot access your funds or reset your wallet for you. In practice, the clearest sign is how the wallet is set up: a non-custodial wallet will generate a recovery phrase (seed phrase) and instruct you to store it safely, because that phrase is the master backup that restores your wallet on a new device. If the service can “recover your account” with an email and password alone, it is usually custodial, or at least involves custody or recovery controls that reduce your independence. Non-custodial wallets also typically state clearly that the user is responsible for key management and that losing the seed phrase can mean losing access permanently. When reviewing wallets, look for explicit wording like “self-custody” or “non-custodial”, plus documentation explaining that the wallet provider does not hold your keys. If you are unsure, check the provider’s help centre and product pages for direct statements about key ownership and recovery phrase responsibility, because that is where reputable providers make the custody model unambiguous.

Confirm the wallet is described as non-custodial or self-custody in official documentation

Check that it gives you a recovery phrase and tells you to store it offline 

Verify the provider states they do not control or store your private keys 

Be cautious if “password reset” restores full access without a recovery phrase

Treat custody clarity as essential, not a nice-to-have 

 

Can I use a decentralised wallet to store Bitcoin as well as other cryptocurrencies?

Yes, many decentralised wallets can store Bitcoin and other cryptocurrencies, but compatibility depends on the wallet and the networks it supports. Bitcoin uses its own blockchain, so you need a wallet that supports Bitcoin addresses and Bitcoin transactions specifically, rather than only Ethereum or other smart contract chains. Multi-chain self-custody wallets often provide separate address formats for different networks and guide you through receiving funds on the correct chain. This is where users can make costly mistakes: sending Bitcoin to a non-Bitcoin address or sending assets over an unsupported network can result in funds not appearing or being difficult to recover. A responsible approach is to check the wallet’s supported assets and networks before transferring, then test with a small amount if you are moving a larger balance. If your main goal is storing Bitcoin long term, some users prefer a Bitcoin-focused wallet or hardware wallet for simplicity and security, while still using a multi-chain hot wallet for day-to-day DeFi activity on other networks. Either way, the key is matching the asset to the correct address and network each time, because blockchain transfers are typically irreversible once confirmed. 

Choose a wallet that explicitly supports Bitcoin, not just “crypto” broadly

Always use the correct Bitcoin receiving address for BTC transfers

Confirm the network before sending, wrong networks can cause loss 

Do a small test transfer before moving larger amounts

Consider separating roles: Bitcoin storage vs multi-chain Web3 activity

 

What fees will I pay when using a decentralised wallet?

Fees in decentralised wallets usually come from three places: network fees, swap or service fees, and sometimes third-party provider fees for add-ons like buying crypto. Network fees are paid to the blockchain itself, not the wallet company, and they exist because validators or miners need to be compensated for processing transactions. On Ethereum and many EVM networks, users often call these gas fees, and the amount can vary based on network congestion and the complexity of what you are doing, sending a token, approving a contract, or swapping assets. If you swap tokens inside a wallet, there may also be an additional fee or spread related to routing, liquidity, or aggregator services, depending on how that wallet sources prices and executes trades. Some wallets also offer integrated purchase options through third-party on-ramps, which can include card processing and provider fees. Good practice is to review the fee breakdown before you confirm, because reputable wallets show you the estimated network cost and the total you will pay, and some allow you to adjust speed or fee levels. Understanding fees is part of safe self-custody because it prevents unpleasant surprises and reduces the chance of failed transactions due to insufficient funds for fees.

Network fees are paid to the blockchain, not the wallet provider

Swap features may include additional routing fees or spreads

On-ramp purchases can carry third-party processing fees

Fees vary with congestion and transaction complexity

Always check the full confirmation screen before approving

 

Can I buy crypto directly inside a decentralised wallet, or do I still need an exchange?

Many decentralised wallets allow users to buy crypto directly in the app, but these purchases are typically powered by third-party payment providers rather than the wallet itself acting as an exchange. In other words, you may not need to open an account with a traditional exchange for a simple purchase, but you will usually still interact with a regulated on-ramp provider that handles card payments, bank transfers, identity checks, and compliance. The advantage is convenience: you can buy and receive crypto directly into a self-custody wallet address, reducing the steps involved and avoiding leaving funds sitting on an exchange longer than necessary. The trade-off is that fees can be higher than exchange pricing, and availability may vary by country, payment method, and supported assets. If you plan to trade actively, an exchange can still be useful for deep liquidity, order types, and lower trading fees, but you can then withdraw to a decentralised wallet for storage and Web3 use. A sensible setup for many users is to use an exchange for larger buys or frequent trading, then use a self-custody wallet for holding and connecting to DeFi. That approach combines flexibility with clearer control of where your assets live. 

Many wallets offer in-app buys via third-party on-ramps

Fees and availability depend on region, payment method, and asset

Exchanges can still be better for active trading and liquidity

Buying directly to self-custody reduces time funds sit on platforms

Always verify the receiving address and network before confirming

 

What’s the safest way to transfer crypto from an exchange to a decentralised wallet?

The safest method is a careful, step-by-step process that prioritises correct addresses, correct networks, and confirmation checks before you send meaningful amounts. Start by opening your wallet and using the “Receive” function to copy the address for the exact asset and network you intend to use, then paste it into the exchange withdrawal page and verify it character by character, or use a QR code where possible to reduce errors. Next, confirm the network selection on the exchange matches the wallet’s network for that asset, because sending on the wrong network is a common reason funds do not arrive and may not be recoverable. Many reputable guides recommend sending a small test transaction first, especially if you are moving a large balance, then waiting for confirmation before sending the remainder. It is also wise to check whether the asset requires a memo or tag, and to ensure your wallet supports that requirement. Finally, keep screenshots or records of transaction IDs until funds arrive. These steps are simple but effective, and they align with the reality that blockchain transfers cannot normally be reversed.

 Copy the receiving address from your wallet’s “Receive” screen

Match the network on the exchange to the wallet’s network

Send a small test transaction before moving larger amounts

Check whether a memo or tag is required for that asset

Keep the transaction ID until the transfer is confirmed

 

What should I do if I accidentally send crypto to the wrong address or wrong network?

If you send crypto to the wrong address, the first thing to understand is that most blockchain transactions are final, and there is usually no central party that can reverse them. If you know who controls the destination address, you can try to contact them and ask for cooperation in returning the funds, but if the address owner is unknown, recovery is often impossible. If you sent crypto on the wrong network, outcomes vary: sometimes funds can be recovered if the receiving platform supports the network and can credit it internally, but many platforms explicitly state they cannot recover assets sent using an incorrect network. If this happens, contact the receiving exchange or wallet provider immediately with the transaction hash and details, because some providers may have limited recovery procedures in certain scenarios, although it can be slow and may involve fees. For wallet-to-wallet mistakes, recovery is typically only possible if you control the destination wallet on the relevant chain, for example the same seed phrase across compatible networks, and you understand how to add the network and token so it appears. The most reliable strategy is prevention: double-check addresses, networks, and asset types, and use small test transfers when possible.

Transactions are usually irreversible, so act quickly and stay organised 

If you know the recipient, contact them and request a return

Wrong network transfers depend on platform support and policies

Contact support with the transaction hash and full details immediately

Use test sends and network checks to prevent repeat issues 

 

How do I back up my wallet properly, and how often should I check my backup?

Backing up a decentralised wallet properly means protecting the recovery phrase, as this phrase is the only way to restore access to your wallet if your device is lost, damaged, or replaced. During wallet setup, you are usually shown a sequence of words and asked to confirm them. This step should never be rushed, because once setup is complete, the wallet provider cannot retrieve or reset the phrase for you. The safest approach is to write the recovery phrase down clearly on paper or another offline medium and store it somewhere private, secure, and protected from damage such as fire or water.

It is strongly advised not to store recovery phrases digitally in screenshots, cloud storage, emails, or notes apps, as these can be exposed through hacking, malware, or account breaches. Some users choose to create more than one physical copy and store them in separate secure locations to reduce the risk of total loss. You should periodically check that your backup is still readable, complete, and accessible to you, especially after moving house, changing storage locations, or making significant changes to your setup. A good habit is to review backups every few months or after any major life change to ensure nothing has been misplaced.

 Write the recovery phrase clearly and store it offline

Avoid digital storage such as photos or cloud notes

Keep backups protected from theft, fire, and water

Consider multiple secure physical locations

Review backups periodically to ensure they remain accessible

 

How do I safely connect my wallet to a decentralised exchange or DeFi app without getting scammed?

Connecting a wallet to a decentralised exchange or DeFi app should always be done cautiously, because this step grants the app visibility of your wallet address and may involve permissions that affect your funds. The safest starting point is to verify the website address carefully, ensuring it is the correct domain and not a lookalike site designed to steal approvals or signatures. Bookmarking trusted platforms and accessing them only through those bookmarks helps reduce the risk of phishing.

Before approving any transaction or connection request, read the prompts carefully and understand what you are authorising. Legitimate platforms will never ask for your recovery phrase. Be particularly cautious with requests that ask for unlimited token approvals, as these can expose your funds if the contract is compromised later. Using a wallet that clearly displays permissions and allows you to review and revoke approvals is a strong security advantage. It is also sensible to disconnect your wallet from platforms you no longer use and to keep only small, active balances in hot wallets when interacting with DeFi. These habits significantly reduce exposure while still allowing you to benefit from decentralised services.

 Verify the website address carefully before connecting

Never enter or share your recovery phrase

Read approval and transaction prompts closely

Avoid unlimited token approvals where possible

Disconnect and revoke access for apps you no longer use

 

What security settings should I enable on my phone or computer when using a hot wallet?

Using a hot wallet safely starts with securing the device it runs on, because device-level weaknesses can undermine even the best wallet software. At a minimum, your phone or computer should be protected with a strong passcode or password that is difficult to guess, along with biometric security such as fingerprint or facial recognition where available. Automatic locking should be enabled so the device locks quickly when not in use.

Keeping the operating system and all apps fully updated is essential, as updates often fix known security vulnerabilities. You should also install software only from trusted sources and remove unused apps or browser extensions, as these can increase the attack surface. For computers, reputable antivirus or anti-malware software can add an extra layer of protection. It is also wise to separate activities where possible, for example avoiding installing experimental software or browser extensions on the same device you use for crypto. These measures do not eliminate risk entirely, but they significantly reduce the likelihood of compromise.

Use strong passcodes and biometric security

Enable automatic device locking

Keep operating systems and apps updated

Remove unnecessary apps and browser extensions

Avoid risky downloads or software on wallet devices