๐ What is a cryptocurrency custodian?
When we buy cryptocurrencies, a key decision is figuring out who controls the private keys. Thatโs where the concept of custody comes in.
๐ฆ Third-party custody: a company or platform holds the keys and manages access to the funds. Itโs simpler, but it means trusting our assets to another entity.
๐ Self-custody: the user controls their private keys or seed phrase. It offers greater independence, but also full responsibility: if you lose your keys, no one can recover your funds.
๐ค Shared custody or multisig: control is distributed across multiple keys. To move funds, approval from multiple participants is required, adding security.
๐ก The key: there is no one ideal model for everyone. Before choosing, itโs worth evaluating security, ease of use, risks, and control.
๐ In cryptocurrencies, understanding who holds the keys is essential: whoever controls the keys controls the funds.
When we buy cryptocurrencies, a key decision is figuring out who controls the private keys. Thatโs where the concept of custody comes in.
๐ฆ Third-party custody: a company or platform holds the keys and manages access to the funds. Itโs simpler, but it means trusting our assets to another entity.
๐ Self-custody: the user controls their private keys or seed phrase. It offers greater independence, but also full responsibility: if you lose your keys, no one can recover your funds.
๐ค Shared custody or multisig: control is distributed across multiple keys. To move funds, approval from multiple participants is required, adding security.
๐ก The key: there is no one ideal model for everyone. Before choosing, itโs worth evaluating security, ease of use, risks, and control.
๐ In cryptocurrencies, understanding who holds the keys is essential: whoever controls the keys controls the funds.
