Custody

Who holds the private keys. The single most important question to ask any wallet or exchange.

Custody is the question of who holds the private keys to a Bitcoin wallet. Two answers exist: someone else (custodial) or you (self-custody). Every wallet, every exchange, every Bitcoin product is one or the other.

Custodial wallets are convenient. The provider handles backups, account recovery, and you can usually log in with email and password. The trade-off is that they hold your keys, which means they can freeze your account, lose your funds in a hack, or go bankrupt and take your money with them. Mt. Gox, Celsius, FTX — the historical pattern is well-established.

Self-custody flips the trade-off. You hold the keys; nobody can freeze you, hack the company, or run away with your money. The flip side is that the responsibility for keeping your seed phrase safe is yours alone. BTCBitByBit is self-custody only. We never hold your funds.

Learn this in our courses

Course topic

Wallets & self-custody

How to store Bitcoin so that nobody — not even us — can take it.

Related terms

Glossary

Self-custody

Holding your own Bitcoin private keys. Nobody can freeze, seize, or lose your sats — except you.

Glossary

Private key

The cryptographic secret that authorises spending Bitcoin. If someone gets your private key, they can spend your sats.

Glossary

Seed phrase

A 12 or 24-word phrase that backs up your entire wallet. Lose it, lose your sats. Share it, lose your sats.

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