What is Self-Custody?
Self-custody means holding your own Bitcoin private keys rather than trusting a third party like an exchange. In the Bitcoin world, there’s a saying: “Not your keys, not your coins.”
When you leave your Bitcoin on an exchange, you’re trusting that company to safeguard your funds. History has shown that this trust can be misplaced — exchanges have been hacked, gone bankrupt, or simply disappeared with users’ funds.
Why It Matters
Self-custody is the foundation of Bitcoin’s promise of financial sovereignty. The whole point of Bitcoin is to remove the need to trust intermediaries. If you keep your Bitcoin on an exchange, you’re reintroducing the very trust assumptions that Bitcoin was designed to eliminate.
How to Self-Custody
The basic steps are straightforward:
- Get a wallet — Choose a reputable Bitcoin wallet (hardware wallets like Coldcard or Trezor are recommended for larger amounts)
- Write down your seed phrase — This is a set of 12 or 24 words that can recover your wallet. Write it on paper or metal. Never store it digitally.
- Send your Bitcoin to your wallet — Withdraw from the exchange to your own wallet address
- Verify the transaction — Check that the Bitcoin arrived using a block explorer or your own node
Security Best Practices
- Never share your seed phrase with anyone
- Store your seed phrase in a secure, fireproof location
- Consider using a passphrase (25th word) for additional security
- Test your backup by recovering your wallet before storing large amounts
- Use a hardware wallet for amounts you can’t afford to lose
The Responsibility
Self-custody comes with responsibility. There’s no customer support number to call if you lose your keys. But this tradeoff is exactly what makes Bitcoin powerful — you have complete, unconditional control over your own wealth.