This content originally appeared on HackerNoon and was authored by Maksim Boiarov
Cryptocurrency is stored at some address (“wallet”), from which and to which the owner sends and receives coins. The difference between wallets lies in how the user interacts with the address/(-es). The process of accepting/sending coins includes monitoring transactions on the blockchain. Such management can be carried out by the user independently or with the help of processing companies that provide services for creating addresses and tracking transactions, charging a commission for such assistance. This article will help to find out the pros and cons of interacting with such services and how to decide whether to deal with crypto payment tracking on your own or delegate such duties in full or partly (and which part) to professionals.
There are three types of interaction with specialized services:
- payment forwarding
- custodial processing
- non-custodial processing
Payment forwarding
Forwarding is an instant transfer of payments from temporary processing addresses to the specified address of the owner. Thus, the processing service owns the payment coins for a short time and does not store them.
| Pros | Cons | |----|----| | The service does not store payments but owns them for a short time when transferring. \n At the end of the chain, the payment goes to the owner's address. \n No KYC, KYB. | Double network fees \n You can only accept payments; \n automatic payouts must be implemented separately. |
Currently, it's a rare method. Only one Crypto Payment Gateway provides crypto-forwarding Apirone. BTW they provide forwarding of Ethereum, Tron, stablecoins and etc. There are unique methods.
Custodial crypto processing
This means that a processing company creates private keys, stores them, and monitors the network. Also, when choosing a custodial wallet, the services include tracking transactions and notifying the owner about the facts of receiving coins to addresses. In this case, the company completely manages your money. It is convenient if you need to not only accept but also pay your counterparties. Among other things, the list of services may include exchange or conversion into fiat currency with the possibility of withdrawing to a card or bank account.
| Pros | Cons | |----|----| | Ease of use Works like a regular account on the exchange. \n Uses the familiar login-password mechanism. \n Many ways to restore access via sms, email, KYC, or through the support service. \n Simple control You do not have to learn all the intricacies of working with various blockchains. \n No need to worry about errors; most likely, before sending funds, the transaction is checked several times. | Less securityThird-party platforms have more vulnerabilities. \n Users' personal data is stored in a single centralized repository. \n Third-party platforms are often targeted by hackers. \n No confidentialityTo create an account, identity verification is required, i.e. the provision of passport data, or a bank account. \n No direct ownership"Not your keys - not your money", i.e. a third-party service owns your funds. \n Crypto processing can freeze your cryptocurrency, withhold or detain funds due to blocking by your line of business, country, or other reasons. \n There is a high probability of scam exit or embezzlement of customer funds, as often happens with crypto exchanges. |
Most crypto companies use this method. It is more difficult to find someone who does not use this method.
Non-custodial processing of cryptocurrencies
This method assumes that you own the private keys and no one else. You provide the processing service only with addresses for tracking transactions and notifications of payments.
| Pros | Cons | |----|----| | You are responsible for your securityIt will be harder for attackers to steal your data, especially if you use cold storage or a hardware wallet. \n Full control over stored funds. \n The cryptocurrency on the wallet is in total ownership of the user. \n There is no risk of third-party interference. | No possibility to restore accessIf you lose your private key or mnemonic phrase, then access to your funds may be closed forever. \n Difficult for beginners. \n The interfaces of non-custodial wallets can be quite complex. \n At least basic knowledge of blockchain and cryptocurrencies is required. \n A higher degree of responsibility. |
Most popular is a BTCPay standalone Server, OpenNode and forks. But these servers only support Bitcoin, require good developer skills and powerful server instances.
Differences between custodial, non-custodial, and forwarding payments
This table clearly shows the difference between the three methods, which allows you to make the right choice by evaluating your capabilities and reducing risks when interacting with processing companies.
| \n | Custodial crypto wallet | Forwarding | Non-custodial crypto wallet | |----|----|----|----| | Private key keeper | Third party | Third party temporarily, then the owner | owner | | Access recovery | Many ways | not applicable | impossible | | Economic security | The service is responsible for the funds’ security, that is why its credibility shall be 100% | Partial credibility | Owners are responsible for their funds’ security | | Procedures of KYB, KYC, and AML | compulsory passing | no | not applicable | | Restrictions | by countries, by a line of business | no | no |
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Conclusion:
If you value full control and security, choose non-custodial but you will have BTC only and spend a lot of time developing.
If you want maximum simplicity and trust the platform, custodial processing will do.
If you want a balance between convenience and control, forwarding may be a good option. \n
This content originally appeared on HackerNoon and was authored by Maksim Boiarov
Maksim Boiarov | Sciencx (2025-06-20T08:34:56+00:00) Methods of Accepting Cryptocurrencies: Forwarding, Non-custodial, and Custodial. Retrieved from https://www.scien.cx/2025/06/20/methods-of-accepting-cryptocurrencies-forwarding-non-custodial-and-custodial/
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