Custodial vs self-custody

Lesson 2 of 3 · 4 min

Custodial

On an exchange or a faucet site, the service holds the keys. You log in with a password. It is convenient, but you trust the service to stay solvent and honest. Balances on CoinHarbor are custodial too: they are a record in our database until you withdraw.

Self-custody

In your own wallet (for example a mobile or hardware wallet) only you hold the keys. Nobody can freeze your coins, but nobody can recover them if you lose the seed phrase.

A practical mix

Keep small amounts you use often where it is convenient.
Move larger amounts to a wallet you control.
Turn on two-factor sign-in wherever you keep custodial balances.

For education only. Not financial advice.