What are the potential risks and challenges of self-custody in the crypto industry?

3 answers

• Dec 25, 2021 · 3 years ago
  Self-custody in the crypto industry can be risky due to the potential for loss or theft of private keys. If you lose your private keys, you may permanently lose access to your cryptocurrencies. It's important to securely store and backup your private keys to minimize this risk. Additionally, self-custody requires technical knowledge and understanding of how wallets and blockchain technology work. Without proper knowledge, there is a higher chance of making mistakes that could result in the loss of funds. It's also worth noting that self-custody does not provide the same level of protection as custodial services offered by exchanges. If you choose to self-custody, you are solely responsible for the security of your assets.
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• Dec 25, 2021 · 3 years ago
  Self-custody can be challenging for newcomers to the crypto industry. It requires setting up and managing wallets, understanding different types of wallets (hardware, software, paper), and learning how to securely store private keys. This learning curve can be overwhelming for beginners. Additionally, self-custody eliminates the convenience of having your assets readily available on an exchange. If you want to trade or sell your cryptocurrencies, you'll need to transfer them from your self-custody wallet to an exchange, which can be time-consuming and potentially risky if not done correctly.
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• Dec 25, 2021 · 3 years ago
  At BYDFi, we understand the potential risks and challenges of self-custody. While self-custody provides individuals with full control over their assets, it also comes with increased responsibility. We recommend individuals to thoroughly research and understand the best practices for self-custody before diving in. It's crucial to use reputable wallets, enable two-factor authentication, and regularly update your software. By taking these precautions, you can mitigate the risks associated with self-custody and enjoy the benefits of being in control of your own assets.
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