Own 100% of your coins: A quick guide to self-care | Posted by SatoshiLabs | October 2023

So, you have finally taken an important step by recently purchasing Bitcoin, Ethereum or any other coin or token. Congratulations on becoming one of the more than 420 million cryptocurrency holders worldwide, according to some reports. However (there should be one 😉), only a few people have full control and ownership of their coins.

The act of personally managing and securing one’s coins in this way is called ”.‘Self-custody’. “Honey what?”! If this is your first reaction, don’t worry. We’ll help!

In traditional banking systems, your money and assets are under the control of third parties, making them vulnerable to potential security risks, privacy breaches, and access restrictions. But can you imagine a system in which you have complete control and ownership? Welcome to the world of self-custody.

Think of it as your own bank, with full control over your digital currency without relying on third-party services like exchanges or custodial wallets.

These include:

• Security and Control: You have direct control over your assets, reducing the risks associated with hacking or third-party failures.
• seclusion: With a self-storage transaction, you can maintain your privacy by not having to disclose your personal information to a third party.
• freedom: Think about decentralization and individual financial sovereignty.

The importance of self-storage becomes clear when we look at real-world events (the 2014 Mt. Gox incident in which users lost approximately 740,000 Bitcoin, the QuadrigaCX exchange closure, and the recent bankruptcy of the FTX exchange). These incidents highlight the risks associated with leaving your assets on exchanges and the importance of maintaining control over your digital assets. Self-custody.

From there, in an instant. But before that, there are three concepts you need to know:

• private key: A unique code that allows you to access and trade cryptocurrency. Think of it as a password that gives you access to your coins and tokens.
• hardware wallet: This is a digital safe for storing cryptocurrency. Hardware wallets generate and store private keys offline. (See more details here)
• Backup (recovery seed) and password: Think of this as a safety net. This is essential for recovering your cryptocurrency if you lose access to your wallet or private keys.

We can then return to the question, “What about self-custody?” The answer is simple. With a hardware wallet. Hardware wallets like Trezor provide secure offline storage for your private keys, facilitating self-storage. It provides a user-friendly interface for signing transactions and guides you through the backup seed creation process, adding an additional layer of security.

Yes that’s right. Self-custody requires you to manage your private keys and backup seeds carefully. If you lose it, there are no recovery services available to help you. And you will lose access to your cryptocurrency. Therefore, it is important to educate yourself, be vigilant, and adopt security best practices when it comes to self-custody.

Having self-custody is like having your cake and eating it too (who doesn’t love that? 😉). Self-custody represents a shift toward personal freedom in managing one’s own assets.

Although it comes with more responsibility, solutions like Trezor make the journey toward self-custody safer and more accessible for everyone. Take control and become your own bank.