Main Takeaways

  • Binance Wallet is a self-custody Web3 wallet where users have ultimate ownership of their assets and private keys. This contrasts with custodial wallets where a third party has control, and the user has to trust that centralized service.

  • The Binance Wallet uses ‘keyless’ tech, dividing access into three key shares stored in different locations. The wallet cannot be accessed with a single share. Two are always held by the user. The result is robust security without the traditional seed phrase. 

  • To emphasize user control and a commitment to self-custody, the Binance Wallet also offers an “Emergency Export” function allowing users to export their private keys. 

When it comes to managing your crypto assets, the type of wallet you choose plays a crucial role in ensuring the safety of your funds. Among the various options available, the concept of self-custody wallets stands out due to the fact they give users complete control over their own assets. Still new to all this? Let’s break down the difference between self-custody and custodial services as your starting point. 

What Is a Crypto Wallet? Understanding Private Keys and Self-Custody

Self-Custody (Non-Custodial) Wallet: In a self-custody wallet, you hold and control your private keys, meaning you have full ownership of your funds. You are responsible for securing your keys, and if they are lost or stolen, there's no way to recover them — making your funds irretrievably lost.

Custodial Wallet: In a custodial wallet, a third party (such as a cryptocurrency exchange or managed wallet service) holds the private keys and controls your funds. While this can offer convenience and recovery options if you lose access, the downside is that your funds could be frozen, stolen, or restricted if the provider faces issues like hacks, bankruptcy, or freezes access to your account.

Private Keys: Both of the above explanations assume you know what a private key is. For clarity, a private key is a secret, alphanumeric password that allows you to access and control your digital assets, similar to how a physical key grants access to your home. It is the cornerstone of ownership in crypto — anyone with your private key can transfer your assets. Therefore, safeguarding your private key is essential.

Private keys are long and complex, making them difficult to remember. If you lose your private key, you lose access to your assets permanently. To mitigate this, many wallets provide a "seed phrase" — a set of 12-24 words that act as a human-readable backup to restore and protect access to your keys.

How Binance Wallet Stands Out: No Seed Phrases, Full Self-Custody

With Binance Wallet, you are the true owner of your assets. It gives you complete control over your funds through a self-custody model, ensuring that only you have access to your crypto. One key feature of the Binance Wallet is its use of keyless multi-party computation (MPC) technology. This allows you to enjoy the benefits of a self-custody wallet without needing to remember a traditional seed phrase, while still retaining full, unrestricted control over your assets.

How does this technology work? To learn more, check out our Keyless Wallet blog. In essence, Binance Wallet is secured by three key-shares and a recovery password known only to you. These key-shares are generated when you create the wallet and stored in different locations for added security:

  • Share 1: Secured by Binance

  • Share 2: Stored on your device 

  • Share 3: Encrypted by your recovery password, stored on your device, and backed up to your personal cloud storage (such as iCloud or Google Drive)

To access your Binance Wallet, you need at least two of the key-shares. Binance only holds one of them, meaning there is no way for Binance to access your wallet without you. If you lose your device (and the key share on it), you can still restore your wallet using the key share backed up to your personal cloud storage combined with the key share secured by Binance.

However, please note that you, and only you, have access to two of the three key-shares. As a result, you are fully responsible for safeguarding your wallet’s assets and access. If you forget your recovery password and lose your device or delete the Binance app, you will not be able to regain access to your Binance Wallet, and Binance cannot restore it for you. This is the nature of self-custody — you are in full control.

How to Set Up and Secure Your Binance Wallet in 3 Easy Steps

To get started with Binance Wallet, you’ll need to download the Binance app. Once you’ve done this, log in to the app and tap [Wallets]. Switch to the [Web3] tab at the top and tap [Create Wallet] or [Import Wallet].

Exporting Your Keys: A Testament to Self-Custody

A hallmark of self-custody is the ability to export one’s private keys. With Binance Wallet, users are not only in full control of their assets, but also have the option to export their private keys should they wish to migrate elsewhere.

Traditional wallets often rely on seed phrases — mnemonic phrases designed to restore access to all of a user’s keys. In contrast, the Binance Wallet utilizes Multi-Party Computation (MPC) to foster enhanced security. In this setup, private key-shares are split and stored across locations, removing the need for a seed phrase.

Enter the “Emergency Export” function. This feature is designed to provide users with a way to immediately export their private keys should they wish, and for any reason. It’s a testament to Binance’s promise that Web3 wallet users always retain control. 

However, please note that once the “Emergency Export” function is activated and private keys are exported, the Binance Wallet becomes inaccessible. It’s a definitive move — a nod to the wallet’s dedication to the spirit of self-custody.

Final Thoughts

The Binance Wallet embodies the core principles of blockchain and crypto: total control and ownership of your assets. Understanding the critical role of private keys in securing digital assets, Binance Wallet introduces an innovative self-custody solution using keyless multi-party computation (MPC) technology.

The addition of the “Emergency Export” function reinforces Binance’s commitment to user control and autonomy. While self-custody comes with its responsibilities, Binance is dedicated to simplifying the process and addressing potential concerns to enhance the user experience. With a blend of innovation, robust security, and empowering features, Binance Wallet represents a significant advance in cryptocurrency wallets. Web3 is better with Binance. Create a free Binance account today!

Further Reading

Disclaimer: Binance Wallet is an optional product. It is your responsibility to determine if this product is suitable for you. Binance is not responsible for your access or use of third-party applications (including functionality embedded within the Binance Wallet) and shall have no liability whatsoever in connection with your use of such third-party applications, including, without limitation, any transactions you dispute. Please carefully review the Binance Wallet Terms of Use and always do your own research.