About Self Custody
Mastering Self-Custody
#1
Why Self-Custody Matters
Bitcoin empowers its users to act as their own bank, enabling direct peer-to-peer transactions without intermediaries and granting complete sovereignty over their money. However, to fully enjoy these benefits and eliminate the risks associated with keeping Bitcoin on exchanges, it’s essential to take self-custody of your coins.
#2
Setting Up a Cold Wallet
The first step in self-custody is typically setting up a cold wallet using a trusted hardware wallet, securely backing up your seed phrase, and withdrawing your Bitcoin from the exchange to your cold wallet. This initial setup is crucial, as it gives you control over your assets and mitigates most cybersecurity risks.
#3
Facing the Responsibilities of Self-Custody
While this first step is empowering for any Bitcoiner, we believe that the journey toward secure self-custody doesn’t end here—it’s just the beginning. Being your own bank introduces new responsibilities and challenges. Self-custody means you’re responsible for securely storing your Bitcoin and mitigating attack vectors that banks traditionally handled. This includes protecting against cyberattacks, physical threats, and ensuring the security of your backups. Additionally, you want to plan for inheritance, so your assets can be passed on to your family and loved ones.
#4
Tailoring Self-Custody to Your Needs
Understanding the risks and challenges of self-custody is the first step toward addressing them. It’s important to recognise that these challenges vary from person to person. For example, the needs of a twenty-something digital nomad saving earnings in Bitcoin differ greatly from those of a family father in his fifties, who has a substantial portion of his savings in Bitcoin and is planning for retirement and future inheritance. By understanding your personal circumstances and responsibilities, you can create a cold storage solution that best fits your needs.
#5
How We Can Help You Achieve Secure Self-Custody
Our consulting services are designed to help you identify the specific risks and challenges of your situation and guide you in setting up a secure cold wallet accordingly. We’ll also assist you with the technical setup to ensure you’re fully prepared to manage your Bitcoin safely.
Risks & Challenges
- Loss of Access to Private Keys: If you lose your private keys or seed phrase, you may lose access to your funds permanently.
- Security Risks: Self-custody requires implementing robust security measures to protect against cyberattacks, phishing scams, and malware.
- Physical Theft or Damage: Physical devices like hardware wallets can be lost, stolen, or damaged. This risk requires users to take precautions in storing their wallets securely.
- Backup Management: You are responsible for creating and maintaining secure backups of their seed phrase.
- Inadequate Knowledge: Many Bitcoiners lack the technical knowledge necessary for secure self-custody. Misconfigurations or poor practices can lead to vulnerabilities.
- Inheritance Planning: Self-custody necessitates planning for the transfer of assets in case of death or incapacity, ensuring that heirs can access the funds.
- Privacy Considerations: Self-custody also involves safeguarding your privacy, as Bitcoin transactions are transparent. Without careful management, you could expose sensitive information about your holdings, compromising both security and anonymity.
Managing the risks of Bitcoin self-custody can be complex, but you don’t have to do it alone. Our consulting sessions provide expert guidance, helping you secure your assets and avoid costly mistakes. Book a session today and ensure your Bitcoin is safe for the long term.