I don't understand how this is safer than storing my bitcoins on Binance???
Exchanges are often hacked
If you use exchange, you are not having the full control of your bitcoin, the exchanges have the full control so far they have the private key
For privacy, noncustodial wallet, but also open source recommendable
With noncustodial wallet, you have the private key, no one to unlock the bitcoin for you on blockchain, but you alone.
for you to write down and remember right? So they are in control of seed phrase?
For exchanges, the exchanges are in control of the seed phrase and private key, but on noncustodial wallets, you are in control of your seed phrase and private key.
Basically when they give passwords, aren't they supposed to know the passwords too?
I do not know, but they do not need your password to send your coins, the password is for user's to access the coins the user's is having on the exchange platform, but the exchange can still override it and make it useless and have access to your coins without need for anything because they have the private key, they have the full control.
So how is this different than storing my funds on exchange??? Because every company are in control of your private key, Yoroi, Exodus, Trust Wallet and the lists go on.
On noncustodial, you have the private key and the seed phrase, I am not sure of trust wallet as it is close source wallet, but on open source wallet, nobody but only you will have and know the private key and the seed phrase.