Custodial vs self-custody

In plain words

Custodial means a company holds the keys and owes you bitcoin — you have a login and a promise. Self-custody means your own wallet holds the keys, and the coins answer to you alone. Custody feels easy: password resets, support desks. But you're trusting the company to stay honest, secure, and solvent. Self-custody trades that for responsibility: nobody can freeze or lose your coins but you — and nobody can undo your mistakes either.

Why it matters

• Exchange disasters — hacks, freezes, bankruptcies — hit custodial users, not key holders.
• Self-custody is Bitcoin as designed; custody re-adds the middleman.
• The honest answer can be "some of each" while you learn.

Not to be confused with

• Hot vs cold — that's where keys live; this is who has them.

Go deeper

• "Not your keys, not your coins"
• Seed backups
• Hot vs cold wallets