How does self custody of bitcoin work?

3 answers

• Dec 16, 2021 · 3 years ago
  Self custody of bitcoin refers to the practice of individuals holding and managing their own bitcoin without relying on third-party custodians such as exchanges or wallets. It involves taking full control of your private keys, which are used to access and transfer your bitcoin. By self-custodying bitcoin, you have complete ownership and control over your funds, but it also comes with the responsibility of securely storing and managing your private keys. This can be done through various methods, such as using hardware wallets, paper wallets, or software wallets that allow you to generate and store your private keys offline. It's important to follow best practices for securing your private keys and regularly backup your wallet to avoid the risk of losing access to your bitcoin.
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• Dec 16, 2021 · 3 years ago
  Self custody of bitcoin is like being your own bank. Instead of relying on a third-party to hold and secure your bitcoin, you take on the responsibility yourself. This means you have full control over your funds and don't have to worry about the security of an exchange or wallet provider. However, it also means that if you lose your private keys or they get stolen, there is no way to recover your funds. It's crucial to understand the risks and take necessary precautions when self-custodying bitcoin. Make sure to use a secure wallet, keep backups of your private keys, and never share them with anyone.
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• Dec 16, 2021 · 3 years ago
  Self custody of bitcoin is a fundamental principle of decentralized finance (DeFi). It allows individuals to have complete control over their funds and removes the need for intermediaries. With self custody, you don't have to rely on centralized exchanges or custodians to hold your bitcoin. Instead, you can use hardware wallets, which are physical devices that securely store your private keys offline. This ensures that your bitcoin remains safe even if your computer or smartphone gets hacked. Self custody also aligns with the ethos of privacy and security that cryptocurrencies like bitcoin aim to provide. At BYDFi, we believe in empowering individuals with self custody options and providing them with the necessary tools and resources to securely manage their bitcoin.
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