A non-custodial wallet, also known as a self-custody wallet, is a type of cryptocurrency wallet where the user has full control of their funds and private keys. In contrast, a custodial wallet is where a third party takes custody of private keys on behalf of users, and the third party has full control over the crypto assets.

Non-custodial wallets give users full ownership of their cryptocurrency, making them responsible for safeguarding their own private keys and funds. This means that users have complete control over their crypto holdings, manage their own private key, and handle transactions themselves. However, one drawback of non-custodial wallets is the lack of recovery options in case users lose their password.

On the other hand, custodial wallets are generally preferred by newcomers and those who value the set-and-forget nature of managing their crypto through an exchange or other centralized wallet provider. Custodial wallets are usually more convenient and have less responsibility held by users. However, users have to trust the custodian that holds their funds, which is usually a cryptocurrency exchange.

In summary, non-custodial wallets give users full control and ownership of their private keys and funds, while custodial wallets are generally preferred by those who prioritize ease of use and backup recovery options.