Definition
Self-custody means that a user controls the cryptographic authority needed to move cryptocurrency rather than relying on a provider to approve withdrawals from an internal account. It can be implemented through a software wallet, hardware device, offline signing setup, or a carefully designed multisignature arrangement. The defining feature is control of spending authority, not the appearance of an application or the presence of a personal account name. Self-custody reduces some intermediary risks but transfers responsibility for backups, transaction review, device security, and recovery planning to the holder. Losing every usable recovery path can make funds inaccessible, while disclosing sufficient key material can allow unauthorized spending. It also does not protect against approving a harmful contract interaction or sending to the wrong address. A sound custody arrangement must address both theft prevention and the ability to recover access when devices or circumstances change.
Source references
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