Vault

What a bank does here: it keeps your money in its vault and its ledger, and you trust it to hand the money back when you ask. What you do instead: you hold the keys to your own crypto. Nobody can freeze it, lend it out or lose it in a bankruptcy — but nobody can reset your password either.

Self-custody is the foundation of everything else on this site. Before you earn on, borrow against or move your coins, you need to know exactly where they live and who can sign for them.

Key concepts

• Private key and seed phrase. A wallet is really a key. The 12- or 24-word seed phrase is a human-readable backup of that key. Whoever has the words has the coins.
• Hot vs cold wallets. A hot wallet lives on an internet-connected phone or browser and is convenient for small amounts. A hardware (“cold”) wallet keeps the key on a dedicated device that signs transactions without exposing it.
• Custodial vs self-custody. Coins on an exchange are an IOU from that exchange. Coins in your own wallet are yours, with all the responsibility that brings.
• Multisig. A wallet that needs, say, 2 of 3 keys to sign. It removes the single point of failure and lets families or partners share control without a middleman.
• Inheritance. If only you know how to reach your coins, they may die with you. A written, tested recovery plan matters as much as the hardware.

A sensible starting setup

1. Keep spending money in a hot wallet, like cash in your pocket.
2. Move long-term holdings to a hardware wallet you bought directly from the manufacturer.
3. Write the seed phrase on paper or steel, never in a photo, cloud note or email.
4. Send a small test transaction before moving anything large.
5. Once the balance would hurt to lose, consider a 2-of-3 multisig.

Check your understanding

Guides in this track

• How to Set Up a Hardware Wallet, Step by Step
• Seed Phrase Do’s and Don’ts
• Multisig for Families: Shared Custody Without a Bank

Education only, not financial advice. Rates change and are not guaranteed. CoinPayBank is not a bank.