Self-custody gives people\u00a0total control\u00a0<\/strong>over their cryptocurrency without having to trust anyone<\/strong>.<\/p>\n This is a revolutionary concept that\u2019s present for the first time in human history. And yet, many ignore it \u2013 even investors with hundreds of thousands in the cryptocurrency market.<\/p>\n Of course, some of them may still be able to transact, trade, or send their assets\u2026 But they\u2019re not in control over them.<\/p>\n The custodians are.<\/p>\n The actual ownership\u00a0<\/strong>of a crypto wallet boils down to having the private keys<\/strong> that control it.<\/p>\n Period.<\/p>\n When you buy crypto on an exchange,\u00a0you don\u2019t really have any control over your assets. The exchange does \u2013 they have the keys to the wallet where the cyrpto actually is.<\/p>\n What you have is their promise\u00a0<\/strong>that, when you ask them to, they will allow<\/strong> you to transfer it or trade it for FIAT money.<\/p>\n So you need to trust them<\/strong> that they won\u2019t break this promise.<\/p>\n And this relationship can last for years, even with a happy ending for many\u2026 But technically, you\u2019re at the mercy of the exchange.<\/p>\n Technically, you don\u2019t own your crypto.<\/strong><\/p>\n Any exchange that you gave your coins to (i.e. where you hold your assets) can literally freeze your account, pause withdrawals, or simply disappear with your money. These actually happen more often than you\u2019d expect.<\/p>\n I often hear arguments that a certain exchange is \u201cestablished\u201d,<\/em> \u201creputable\u201d, \u201cnot a ponzi\u201d, \u201cnot a scam\u201d<\/em>, etc.<\/p>\n Nothing wrong with having an opinion.<\/p>\n Just let\u2019s not pretend that this doesn\u2019t boil down to\u00a0trust<\/strong>.<\/p>\n Okay, let\u2019s say we can be 100% sure that the exchange of choice won\u2019t run away with our money, although technically they can.<\/p>\n What we can\u2019t\u00a0<\/strong>be sure of is that the exchange itself won\u2019t suffer from a third-party attack, commonly referred to as \u201cget hacked\u201d<\/em>.<\/p>\n We can\u2019t<\/strong> be sure that your password and 2FA won\u2019t be bypassed by a social engineer, commonly referred to as \u201ca hacker\u201d<\/em>.<\/p>\n We also can\u2019t<\/strong> be sure that the local government won\u2019t tell them to \u201cfreeze all accounts of residents of country X\u201d<\/em> and they\u2019ll be forced to comply in order to stay in business.<\/p>\n And it\u2019s not only oligarchs and third-world countries that are susceptible to this\u2026 Canada froze bank accounts of its own citizens.<\/p>\n Whatever I say here, I won\u2019t communicate it better than Jesse Powell, the CEO of Kraken (one of the best exchanges out there at the moment of writing):<\/p>\n Link to the tweet<\/p>\n<\/p><\/div>\n\n\u201cNot Your Keys, Not Your Coins\u201d<\/em> Explained
\n<\/h2>\n\nCrypto Exchanges vs Self-Custody
\n<\/h3>\n\n\u201cReputable\u201d Exchanges
\n<\/h3>\n![\"self-custody\"](\"https:\/\/monkwealth.com\/wp-content\/uploads\/2022\/07\/KrakenCEO.png\")
<\/p>\n
![\"close\"](\"https:\/\/monkwealth.com\/wp-content\/plugins\/mailpoet\/assets\/img\/form_close_icon\/classic_white.svg?mailpoet_version=3.95.1\"\/)
<\/p><\/div>\n