Self-Custody vs. Third-Party Storage: How Should You Store Your Crypto
You’ve been working hard slowly building up your crypto gains. You’ve had some big wins and also suffered some losses, but that hopefully isn’t what keeps you up at night. Knowing where to store your assets and worrying whether or not they are truly safe likely does.
So, where should you store your crypto? This is a question that separates the casual investors from the serious ones. And truthfully, there is no “one-size-fits-all” solution here.
But one thing you need to keep in mind is that the decision to store your digital assets yourself (self-custody), or with a third party can have a massive impact on how you build wealth, your peace of mind, and even your entire financial future. Here’s everything you need to know.
What Self-Custody Really Means
To put it simply, self-custody simply means that you are the ONLY one in control of your private keys. That means you are the bank and you are the vault.
Think of it like having a couple of gold bars under your mattress instead of in a bank safe deposit box. You are in total control, but the main drawback is that you are also responsible for everything (including keeping it safe).
Understanding how a crypto wallet works is essential here. Whether it’s a hardware wallet or software wallet in which only you know the seed phrase, this means you are practicing self-custody. No one can freeze the account; no one can tell you what you can do with your assets; and no one can deny you access for any reason.
That is very powerful, and for many people, this complete ownership is one of the core principles that the cryptocurrency industry was built upon. For everyday people, it’s an empowering concept, but in reality, it can be a heavy and stressful burden to carry, especially if you’re unprepared.
The Case for Self-Custody
So, why do millions of investors, especially the crypto-natives, swear by self-custody? Let’s dig into the key benefits:
- You own your assets outright. Not your keys, not your coins. You’ve heard that phrase a million times. Why? Because it’s the truth. When you hold your own keys, you don’t have to trust any corporation or any other human with the security of your wealth. You are eliminating counter-party risk altogether.
- There is no platform that can fail on you. Remember Mount …
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