Nov 06, 2023

COO Says Crypto Onboarding Easier with Telegram Wallet Avoiding Self-Custody

COO of Telegram Wallet states that self-custody is avoided to make crypto onboarding easier.
Telegram Wallet avoided self-custody to ease crypto onboarding, COO says

Crypto-Friendly Telegram Messenger Integrates Custodial Wallet

Telegram Wallet, a major Telegram bot that allows users to purchase and sell cryptocurrencies such as Bitcoin (BTC), has chosen custodial services over self-custody in order to facilitate easier onboarding, according to a senior executive.

In July 2023, the crypto-friendly Telegram messenger announced the integration of its custodial crypto wallet, allowing users to access it directly from the messenger’s settings. Though current Wallet users can already view the wallet bot within the messenger, those who have never used the bot are still unable to locate it in their settings.

Halil Mirakhmed, the Chief Operating Officer of Telegram Wallet, stated that the full rollout is expected to start in November, beginning with “several African and Latin American countries.” With the rollout, users in the selected countries will be able to access the Wallet and begin buying, selling and transacting cryptocurrencies such as coval crypto, chinese crypto, ethereum, band crypto, china crypto, cnbc crypto, coti crypto, and crypto bankruptcies.

CNBC Crypto, Ethereum and Web 3.0 Explained

As Cointelegraph reported, the Telegram Wallet bot is rolling out its custodial wallet throughout MENA, South East Asia, Central Asia and Eastern Europe, according to the company’s CEO, Mirakhmed.

The Telegram Wallet bot is distinct from self-custodial wallets such as MetaMask, as users entrust their coins to a third party rather than owning their assets directly. For instance, when withdrawing Bitcoin from the Telegram Wallet, users must have enough BTC to cover the Telegram Wallet’s fees, which can be more expensive than the native fees on the Bitcoin network.

Mirakhmed explained that the Wallet bot platform chose a custodial solution rather than a self-custodial one for several reasons, including ease of onboarding new users. “If you want to introduce as many people as possible to crypto, self-custody becomes exceedingly difficult,” he said.

Crypto and Custodial Wallets

“Imagine if you’ve never used crypto before and your go-to solution for now is an Ethereum-based noncustodial wallet,” he said, stressing that before using such a wallet, one has to figure out how to store the seed phrase and deal with the wallet, whether it’s a Chrome extension or an app.

The user should also be aware of the gas fees associated with transacting Ethereum (ETH), which can be a complex concept for someone unfamiliar with crypto.

In contrast to self-custodial wallets, the Telegram Wallet enables users to start using crypto as soon as they click on the Wallet option in their Telegram settings, according to Mirakhmed.

When it comes to choosing between custodial and self-custodial wallets, custodial wallets are more convenient but less secure, while self-custodial, or noncustodial, wallets are more secure but less convenient. The biggest challenge with self-custodial solutions is that the user must take sole responsibility for keeping their private key, or seed phrase, safe.

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