How does self custody work for cryptocurrencies?

5 answers

• Dec 25, 2021 · 3 years ago
  Sure! Self custody refers to the practice of individuals holding their own cryptocurrencies instead of relying on third-party custodians like exchanges. To self-custody your cryptocurrencies, you need a digital wallet, which can be a hardware wallet, a software wallet, or a paper wallet. You generate a unique private key that allows you to access and control your funds. By self-custodying, you have full control over your assets and eliminate the risk of exchanges getting hacked or going bankrupt. However, self custody also means you are solely responsible for the security of your wallet and private key. It's important to keep backups and follow best security practices to prevent loss or theft of your cryptocurrencies.
  727364
• Dec 25, 2021 · 3 years ago
  Self custody is like keeping your money under your mattress instead of in a bank. With self custody, you don't need to rely on a bank or exchange to hold your cryptocurrencies. Instead, you hold them in your own wallet. This gives you more control and privacy over your assets. However, it also means you need to take extra precautions to secure your wallet and private key. If you lose your private key or it gets stolen, there's no way to recover your funds. So, while self custody offers more independence, it also comes with more responsibility.
  549183
• Dec 25, 2021 · 3 years ago
  At BYDFi, we believe in the power of self custody. When you self custody your cryptocurrencies, you are in full control of your funds. No one else has access to your assets, and you don't need to trust a third-party custodian. This aligns with the decentralized nature of cryptocurrencies. Self custody also allows you to participate in decentralized finance (DeFi) platforms and earn passive income through staking or lending. However, it's important to choose a reliable wallet and follow security best practices to protect your assets.
  538135
• Dec 25, 2021 · 3 years ago
  Self custody is a great way to ensure the security and privacy of your cryptocurrencies. By holding your own assets, you eliminate the risk of exchanges being hacked or going bankrupt. You also have more control over your funds and can easily transfer or trade them without relying on a third party. However, self custody is not for everyone. It requires technical knowledge and responsibility to securely manage your wallet and private key. If you're not comfortable with that, using a reputable custodial service may be a better option for you.
  546110
• Dec 25, 2021 · 3 years ago
  Self custody is the ultimate way to take control of your cryptocurrencies. With self custody, you become your own bank. You don't need to rely on anyone else to hold or manage your assets. This gives you the freedom to transact and store your cryptocurrencies as you see fit. However, self custody also means you need to be extra cautious. Losing your private key means losing access to your funds forever. So, make sure to back up your wallet and keep your private key secure. Self custody is the future of finance, empowering individuals to truly own their digital assets.
  57496