Lesson 2 of 6 10 min read
Wallets, keys and custody
Who really holds your coins, and how to keep them safe.
Keys, not coins
A wallet doesn't store coins — it stores the private key that proves you own them. Anyone with your key or seed phrase can move your funds. There's no bank to call.
Custodial vs self-custody
On an exchange, the exchange holds the keys for you (custodial). In a self-custody wallet, you hold them. Exchanges are convenient for trading; self-custody removes exchange risk but puts full responsibility on you.
Basic security
Write your seed phrase on paper, never in a screenshot or cloud note. Use two-factor authentication on exchanges. Nobody legitimate will ever ask for your seed phrase.
Key takeaways
- Whoever has the key controls the funds.
- Keep only trading capital on exchanges.
- Never share a seed phrase — with anyone.
Exercise
Audit your setup: is 2FA on every exchange account? Where is your seed phrase stored? Fix one weak point today.
Educational content only, not financial advice. Crypto is volatile and you can lose money.