My journey in crypto has been a long one. Not early enough to be buying Bitcoin at ridiculously low prices but early enough to have seen it below $5,000 and Ethereum sitting at prices below $30. When I entered the space I had an overwhelming feeling that blockchain technology was going to completely change the world and I would make tons of money along the way. Both are true, maybe not at the speed at which I would have liked and maybe not what I had originally thought.

Being that I now consider myself a native, I find myself having a deep understanding of crypto and most of the time when you are considered “advantaged” you lose sight that not everyone is there with you. I wish I started this blog back in 2017 when I first got into it but the next best time is now.

If you are still new to space, welcome. I truly feel grateful to be experiencing a whole new world being created before my eyes. With my knowledge and expertise, I hope to guide new people to understand the space that is bound to turn everyone’s world upside down, just like the internet did.

High-Level Key Takeaways

• Self-Custody Crypto Wallet: A type of crypto wallet that you have full control over. Custodial wallets do not give you a private key and therefore do not give you complete control of your coins in that wallet

• Private Keys: Private keys are used to represent ownership

• Seed Phrase: A 12 or 24-word passcode to access crypto in the wallet and its private keys. This passcode should be recorded and not shared with anyone. It is best to have it written and stored securely.

• Hot Wallets vs Cold Wallets: Hot wallets are connected to the internet, cold wallets are not and remain offline to enhance your security.

What is a Self-Custody Crypto Wallet?

When I started out in crypto I knew I was overwhelmed by all the people that were seemingly making millions of dollars. I watched every price prediction video imaginable and made every mistake under the sun to find the knowledge that I had. What I notice is that most people these days do not even make it off Coinbase (Centralized Exchange not even the wallet app).

This both concerned me and inspired me to write this post.

A Self custody crypto wallet is one that is truly owned by you, the person behind this screen. There are many providers to choose from when it comes to choosing a self-custody wallet and at this stage in the game, I use more than 5. At the same time.

How Do You Know If You Own Your Crypto Wallet or Not?

This is simple. Did you get a seed phase when signing up?

If you did not receive a seed phrase when creating an account you my friend, do not own your crypto. You have a fancy IOU that can be taken away from you, at any moment. Right now, if you have your entire net worth on Coinbase or Robinhood (or any other centralized exchange) you are opening yourself to unneeded risk.

Here Are The Wallet Providers I Use:

• MetaMask for the Ethereum Network

• Phantom and Backpack for Solana

• Argent for Stark

• Trust Wallet for Bitcoin Network and Ethereum Network

There are many other providers out there like Rabby Wallet, Coinbase, Core, or SolFlare. Please, do not keep crypto on centralized exchanges, again, if you do you open yourself up to risks of having everything wiped from an account that you do not technically own. A lot of trust has been built with these crypto companies over the past decade but what we have seen in recent memory is that central authorities can act in nefarious ways that may harm users.

Remember the Wall St. Bets fiasco when Robinhood ceased trading on assets because bankers were losing too much money shorting stocks? Or maybe when banks in Canada froze people’s funds from moving back and forth due to supporting causes that went against the current regime’s will.

These are possibilities that we will live through in today’s world. Protect yourself and get into self-custody, it is time to actually venture into the world of crypto and truly become bankless.

There are different types of Self-Custody Wallet

As mentioned in the key takeaways, there are two types of self-custody wallets: Hot Wallets and Cold Wallets.

Hot Wallets vs Cold Wallets

Hot Wallets will be connected to the internet and inherently carry more risks due to the fact you are opening yourself up to interacting with bad smart contracts. Hot Wallets are important because they will actually give you access to the world of DeFi and other Decentralized Applications (apps) that allow you to witness the true power that cryptographically secured money allows you to experience.

Hot Wallet Allows for the Following:

• Staking Crypto to Earn Yield

• Lending and borrowing

• Participate in Liquidity pools

• Trade (not advised for beginners)

Hot wallets will give you access to more coins and make it so you do not have to trust intermediaries to process your transactions.

Cold Wallets are wallets that are offline and are the most secure because they are not constantly connected to the web. Popular companies like Ledger and Trezor do an excellent job at keeping this space safe and securing your assets.

Not Your Keys, Not Your Crypto

If you are not assigned a seed phrase, the crypto in your wallet is not yours. We want to beat this point over and over again like a drum.

What is a Private Key?

Private keys are similar to a passcode that you would have for your bank. Whoever has the passcode, has access to what is inside the account.

Private keys are used to create public keys, which are ultimately turned into public wallet addresses. These two are mathematically linked together but a private key can never be derived from a public wallet address.

What is a Seed Phrase?

A seed phrase (or recovery phrase) is a 12 or 24-word code that gives you access to the crypto wallet and all the private keys inside of it. This passcode is generated randomly and acts as the ‘master key’ to your wallet.

If you have a seed phrase, you do not need your private keys to access your wallet. They are linked together.

Risks to Self-Custody Wallets

In crypto, you open yourself to risk. This is the nature of the beast. There are many ways you can be proactive and ways to keep yourself safe from people trying to scam you out of your hard-earned money. Use software like Mint Defense to help you identify bad actors before they get access to anything you own.

Here are three risks you need to be aware of.

1) Losing Your Seed Phrase

When you create a self custody wallet you are now responsible for maintaining the record of your seed phrase. In the future, there may be solutions created to ‘decentralize’ the access to a wallet and allow for trusted members to grant access in case someone forgets their seed phrase but for now, go into this understanding that you are now the one that is in control of your own ship.

2) Hacks

The ecosystem is full of bad actors. When you have a self-custody wallet, you must take the extra step to protect yourself and your funds. This may mean paying for software to help you stay safe (like Mint Defense) or revoking access to projects that seem suspicious (with revoke.cash).

3) Protocol Risks

In order to transact with your self-custody wallet, you must connect and interact with Web3 protocols. Before we ever connect to a protocol we always make sure the project is trusted and popular as well has had the proper amount of audits to make sure the code is reliable and nothing fishy is going on in the background.

Real Crypto Experiences (DeFi & Beyond)

Self-custody wallets offer users an unparalleled experience with the money that they have in their wallets. I believe the future looks incredibly bright as more users come on-chain and start to interact with projects. Due to the latest upgrades in Ethereum and widespread competition to lower gas fees, I believe that we are almost at a point where mass adoption is possible, truly an incredible time to be alive.

When you have access to your own private keys the possibilities become endless with what you can do. You can participate in DeFi, collect rare collectibles like NFTs from your favorite games or from your favorite projects, you can lend your crypto and become your own market maker, or borrow money without paperwork!

This next decade will be one to remember and we hope to lead the charge in building an incredible community of people. Digital Whale Club is a private members club that will own real estate across the globe granting access to members whenever they please. Here, on our blog, we will educate future Sovereigns about how to navigate the digital landscape as crypto continues to evolve and teach them the skills to build an income online.