Using self-custody means taking personal responsibility for the secure storage and management of your Bitcoin. In self-custody, you control your private keys, which provide access to your bitcoin, as opposed to relying on custodial services where a third party holds your private keys on your behalf.
To use self-custody, follow these steps:
- Choose a wallet: Select a non-custodial wallet that suits your needs. There are different types of wallets, including hardware wallets, software wallets, and paper wallets. Each has its advantages and disadvantages in terms of security, convenience, and ease of use. Some popular hardware wallets are Ledger Nano S/X, Trezor One/Model T, and Coldcard, while software wallets include Blue Wallet, Muun, Keeper, etc.
- Set up the wallet: Follow the wallet provider’s instructions for setting up the wallet. This process usually involves creating a new wallet, generating a recovery seed phrase, and setting up a PIN or password.
- Backup your recovery seed phrase: Your recovery seed phrase is a series of 12 to 24 words that act as a backup for your private keys. Store this phrase securely and separately from your wallet. Ideally, keep multiple copies in different secure locations.
- Transfer your bitcoin: Once your wallet is set up, you can transfer your bitcoin from a custodial service, like an exchange, or another non-custodial wallet. Make sure to double-check the destination address before initiating the transfer.
- Maintain security: Practice good security habits to keep your digital assets safe. This includes keeping your wallet software updated, using strong and unique passwords for all accounts, and enabling two-factor authentication (2FA) where available. Be cautious of phishing attacks and never share your private keys or recovery seed phrase with anyone.
- Manage your bitcoin: With self-custody, you have full control over your bitcoin. You can send, receive, and store your Bitcoin as you wish. Always double-check transaction details before confirming any transaction.
Remember that with self-custody comes increased responsibility for the security of your bitcoin. It is worth taking the effort to stay informed about good practices and potential risks to protect your bitcoin effectively.