When it comes to custody of your crypto assets, many people approach me asking what is the best option: custody on your own or choosing brokers to take care of this part for you. I already say that there is no definite answer, there are advantages and disadvantages.
In this article, I will talk about it more and try to help you decide which one is best for you!
What does it mean to own your cryptocurrency?
Basically, as I said above, there are two possibilities for you to store your crypto assets: through self-custody or third-party custody. In the second option, you can trust a company to store your crypto assets.
In the case of self-holding, as the name suggests, you will take care of your own cryptocurrency, managing your private key. It is as if you are your own bank.
I need to stress here that if you choose self-guarding, you are solely responsible for properly storing your cryptocurrencies and protecting your private keys. If you lose them, there is no way to get them back. That is why it is important to think carefully about whether it is worth relying on the help of exchanges.
How do you choose between self custody and exchanges?
The choice between the two options boils down to two criteria, mainly: confidence and attacks.
Speaking of trust, do you need to consider whether you are willing to put your crypto assets in the hands of exchanges or do you trust that you know how to do better and do self-guarding?
Now, from the point of view of the attacks, you need to think: what are you trying to protect yourself from by choosing self-incubation? What are your concerns and fears?
While exchanges are an easier target for cybercriminals, as well as being subject to more government rules — even seizures — self-guards, when you take care of your crypto assets, are more vulnerable to hacks, bugs, raids, and much more.
Advantages and disadvantages of self-incubation
The main advantage of self-guarding is that you are in complete control of all your crypto assets. No one can take it from you if it is stored in the wallet. Also, you are free to do whatever you want with them and move them around at any time.
As I said above, self-holding also protects cryptocurrency holders from government takeovers and cyberattacks.
However, as a major drawback, you don’t have any support or help if something goes wrong or you can’t store properly. You can even lose all of your cryptocurrency if you do something wrong.
After all, what is the best option?
There is no correct answer to this. Everything will depend on what you are looking for and whether you have the ability to do self-incubation properly.
One of the main features of cryptocurrencies is resistance to censorship: no government controls them and no one can censor their transactions.
The downside to taking care of your transactions is that if you ever go wrong, someone manages to break into your wallet, find a flaw in your device’s cybersecurity, or if you lose your keys, there is no one who can help you recover your cryptocurrencies. . One mistake can be fatal to your assets.
Self-custodial cryptocurrencies involve risks, and require awareness and good knowledge of the market and how it moves, as well as an understanding of how to operate crypto assets safely and properly. Are you ready for this?