Self-Custody
wallet · security
Holding and securing your own private keys instead of relying on an exchange, custodian, or broker.
Self-custody means you control the private keys needed to spend your cryptocurrency. It removes dependence on an exchange or custodian for withdrawals, but it also makes backup, device security, and recovery your responsibility.
The main benefit is reduced counterparty risk: no third party can freeze withdrawals, rehypothecate balances, or fail while holding your coins. The main risk is user error, including lost seed phrases, malware, phishing, or poor inheritance planning.
Common practices include using reputable wallets, storing seed phrases offline, testing recovery, keeping software updated, and considering hardware wallets or multi-sig for larger balances.
Related terms
Non-Custodial Wallet
→A wallet in which the user controls the signing keys or authorization needed to move funds.
wallet · custody
Custodial Wallet
→A wallet where a third party controls the private keys on your behalf.
wallet · security
Seed Phrase
→A human-readable backup that can recreate a wallet’s private keys, addresses, and spend authority.
wallet · security