Telegram Wallet, a major Telegram bot that allows users to buy and sell cryptocurrencies like Bitcoin (btc), has chosen custody over self-custody to pursue easier onboarding goals, according to a senior executive.
In July 2023, Telegram Messenger supports cryptocurrencies officially announced the integration of custodial crypto wallet, Telegram Wallet, to allow users to access the wallet directly from the messenger settings.
Although Telegram has allowed existing Wallet users to see the wallet bot directly in the messenger, those who have never used the bot still do not see the crypto wallet in their messenger settings section.
According to Telegram Wallet COO Halil Mirakhmed, the full launch of the Wallet is expected to begin in November 2023, starting with "several African and Latin American countries." With the launch, Telegram users in select countries can access Wallet and start buying, selling and transacting cryptocurrencies like Bitcoin (btc).
โThe launch will continue in MENA, Southeast Asia, Central Asia and Eastern Europe,โ Mirakhmed told Cointelegraph, adding:
"Once the global launch has concluded, Wallet will be available in the Telegram settings menu worldwide, with the exception of jurisdictions where Wallet does not operate."
As Telegram Wallet anticipates the upcoming launch of its crypto wallet for millions of Telegram users, it is important to note that the wallet bot has no self-custody.
Unlike leading self-custody walletslike MetaMask, the Telegram Wallet bot operates a custodial wallet Currently, meaning that users trust their coins to a third party and do not own their assets directly. For example, to withdraw Bitcoin from Telegram Wallet, users must have enough BTC to cover Telegram Wallet fees, which can sometimes be more expensive than the native Bitcoin network fees.
According to Telegram Wallet's COO, the wallet bot platform opted for a custodial solution instead of a self-custody one for several reasons, including easy onboarding of new users.
โIf you want to introduce cryptocurrencies to as many people as possible, self-custody becomes extremely difficult,โ Mirakhmed said in an interview with Cointelegraph.
โImagine if you've never used cryptocurrency before and your preferred solution for now, say, is a non-custodial wallet on Ether,โ the COO said. The executive emphasized that before using a self-custodial wallet, one must decide how to store the seed phrase and figure out how to manage the wallet, whether it is a Chrome extension or an app.
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Also one should be willing to pay gas fees to transact with Ether (ETH), which adds too much complexity for a native non-crypto user, Telegram Wallet COO believes.
Unlike self-custodial wallets, Telegram Wallet aims to help users start using cryptocurrencies the exact moment they click Wallet in their Telegram settings, Mirakhmed said:
โFirst of all, onboarding is very simple. Second, you already have some strings there. And thirdly, when you want to send some asset to someone, you simply use a phone contact. This way I can send you money via Telegram instead of having to know your address. โEverything happens within Telegram.โ
Cointelegraph previously reported on the issue of understanding cryptocurrency custody and choose between custodial and self-custodial wallet solutions. Simply put, custodial wallets are more convenient but significantly less secure, while self-custodial or non-custodial wallets are less convenient but more secure. The biggest problem when using a self-custody solution is the It is the sole responsibility of the user to keep the private key or seed phrase secure.to continue being the owner of a crypto asset.
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