Crypto Wallets 101: Custodial vs Self-Custody

What a crypto wallet actually is

A wallet doesn't hold your coins — it holds the keys that prove you own them. There are two main kinds: custodial (the platform holds your keys) and self-custody (you hold your keys).

Custodial vs self-custody

With a custodial wallet, you trust the platform to keep your funds safe and to let you withdraw. With self-custody, you alone control access — and you alone are responsible for your seed phrase.

Which one for what?

• Trading and fast payouts — a custodial account on Barter Funds is simplest.
• Long-term holding — a self-custody hardware or mobile wallet.
• DeFi access — a self-custody wallet is required.

Golden rules

Back up your seed phrase offline, never type it into a website, and keep a small balance in a separate 'hot' wallet for daily use while your main stash stays cold.