Self-Custody
ownership • sovereignty • asset security
Self-custody refers to the practice of personally holding and managing your own cryptocurrency assets without relying on third parties like exchanges or custodians. This means you control your private keys and are fully responsible for the security and access to your funds. Self-custody is a core principle of decentralization and financial sovereignty in the crypto space.
Use Case: A crypto investor stores tokens in a hardware wallet and keeps seed phrases offline, ensuring no centralized exchange or custodian can freeze or seize their assets.
Key Concepts:
- Cold Wallet — Wallet kept offline to minimize hacking risk.
- Hot Wallet — Wallet connected to the internet for frequent access.
- Hardware Wallet — Physical device for secure offline storage.
- Software Wallet — App-based wallet running on a device.
- Custodial Wallet — Third party controls the private keys.
- Self-Custody — You control your keys and assets directly.
- Air-Gapped Wallet — Fully isolated device with no network access.
- Multisig Wallet — Requires multiple keys to authorize transactions.
- Watch-Only Wallet — Monitor balances without private keys.
- Paper Wallet — Physical printout of keys or QR codes.
- Desktop Wallet — Installed on a computer for local control.
- Mobile Wallet — Smartphone wallet for on-the-go use.
- Browser Wallet — Browser extension or web-based wallet.
- Private Keys — Secret cryptographic keys granting full control of assets.
- Seed Phrase — Backup recovery words used to restore wallets.
Summary: Self-custody gives individuals direct control of their crypto holdings, removing reliance on third parties but requiring strong personal responsibility for security.