Self-custody refers to the practice of personally keeping and managing your cryptocurrency. This means that you won’t have to rely on any exchanges, banks, or other parties at all. In such a scenario, you are solely accountable for your private keys, which are the secret codes allowing you access to your digital assets. If you possess the private keys, the money is yours. If that is the case with another person, then it is theirs too.
Self-custody is mostly chosen by people who like to be the sole owners and the most liberated among others. No one can do freezing of your account, blocking of withdrawal, limiting your access, or causing your money to disappear. Your money is constantly with you, on the blockchain, in your wallet, and under your control.
To be able to carry out self-custody, users typically use hardware wallets, software wallets, or other non-custodial tools where they alone possess the private keys for their cryptocurrencies. This kind of storage offers very strong protection against hacker attacks on exchanges and corporate bankruptcies, but it also imposes a great responsibility on the user. If someone loses their private keys or recovery phrase, no entity can help them to regain access to their money.
Your completely free resource hub designed to boost your knowledge of cryptocurrencies
The concept of self-custody is straightforward: you are your own bank. It aligns with the principal tenet of cryptocurrency financial freedom, personal control, and trustless ownership. But along with such freedom comes the need for implementing very strict security measures and appropriate storage practices.