Blockchain & Cryptocurrency Glossary

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Self-Custody

1 min read
Pronunciation
[self kuh-stuh-dee]
Analogy
Self-custody is like keeping your cash under your mattress instead of in a bank.
Definition
Practice where users retain full control over their private keys, without relying on third‑party custodians.
Key Points Intro
Self-custody empowers users by:
Key Points

Full control: Only user holds keys.

No intermediaries: Eliminates counterparty risk.

Responsibility: User handles backup and security.

Privacy: No KYC/AML required for wallet use.

Example
A user stores Bitcoin in a hardware wallet at home rather than on an exchange.
Technical Deep Dive
Self-custody wallets generate and store keys locally (hardware or software). Transactions signed client‑side and broadcast via public nodes. Recovery via seed phrase.
Security Warning
User error (lost seed, compromised device) leads to irreversible loss.
Caveat
High responsibility and technical knowledge required.
Related Terms
Hardware Wallet
Seed Phrase
Cold Storage

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