Beginner guides
Custody vs self-custody, explained without the ideology
Editorial desk · 1 min read ·
Leaving coins on an exchange is a trade-off, not a mistake. Here is how to decide which risks you would rather hold.
Custody is about who holds the key. On an exchange, they do. In your own wallet, you do — along with everything that comes with it.
What you gain by holding your own keys
- No counterparty can freeze, lend out or lose your balance
- Access does not depend on a company staying solvent
- No account can be closed for reasons outside your control
What you take on
Lost backups are unrecoverable. There is no password reset and no support line. In practice, self-custody transfers risk from a company to your own record-keeping.
A middle path
Many people keep spending money on a reputable exchange and long-term holdings in self-custody. That splits the failure modes instead of betting everything on one of them.
⚠ RISK WARNING Cryptocurrency is a volatile, high-risk asset. You may lose your entire investment. Nothing here is financial advice.