Deciphr Academy
Track 2 · Keeping crypto safe · Module 8

Self-custody

Holding your own keys without losing them or having them stolen.

Lessons
6
Reading
37 min
Quiz
15 questions
Pass mark
80%
  1. 1Not your keys, not your coinsWhat does "not your keys, not your coins" mean?6 min
  2. 2Hardware walletsHow does a hardware wallet keep crypto safe?6 min
  3. 3Backing up a seed phraseHow do you back up a seed phrase without losing it or leaking it?7 min
  4. 4Inheritance and recoveryWhat happens to self-custodied crypto when the owner dies or loses access?6 min
  5. 5Threats at home and onlineWhat are the main threats to a self-custody wallet, at home and online?7 min
  6. 6A self-custody checklistWhat do official guides say to check when you hold your own crypto?5 min

The case used in this module

Each module tells its own made-up Brindlecove story, so details can differ from one module to the next.

Key words

Self-custody
Holding your own private keys, so you alone control your crypto and are responsible for keeping it safe.1
Third-party custody
A company, such as an exchange or custody firm, holds the private keys for you.1
Private key
A secret code that approves transactions from a wallet. It can't be changed, and losing it with no backup, such as a recovery phrase, means losing access.1
Recovery phrase (seed phrase)
A list of words that can rebuild a wallet. Anyone who has it can take everything in the wallet.12
Hot wallet
A wallet connected to the internet, such as a phone or web app. Convenient, but exposed to online attacks.1
Cold wallet
A wallet kept off the internet, usually a physical device or even paper. Safer from online attacks, but it can be lost or stolen.1
Hardware wallet
A small device built only to be a wallet. It keeps private keys offline, away from the internet.32
Pre-seeding
A trick where a crook sets up a recovery phrase before a device reaches you, keeps a copy, and waits for you to add funds.4
Split backup
A backup split into shares, where a set number of shares rebuild the wallet and fewer reveal nothing. SLIP-39 is one standard for it.5
Passphrase
An optional extra secret added to a recovery phrase. Every passphrase opens a valid wallet, but only the right one opens yours.6
SIM swap
Getting someone's phone number moved to a SIM card a criminal controls, so their calls and texts go to the criminal.7
Sources
  1. Crypto Asset Custody Basics for Retail Investors – Investor Bulletin. US Securities and Exchange Commission, Office of Investor Education and Assistance (Investor.gov), 12 December 2025.
  2. Ethereum security and scam prevention. ethereum.org, page updated 6 June 2026.
  3. Securing your wallet. Bitcoin.org, checked 22 October 2026.
  4. Best Practices To Securely Buy Your Ledger Signer. Ledger Academy (hardware-wallet maker's documentation), updated 18 September 2026.
  5. SLIP-0039: Shamir's Secret-Sharing for Mnemonic Codes. SatoshiLabs Improvement Proposals (github.com/satoshilabs/slips), Created 18 December 2017.
  6. BIP 39: Mnemonic code for generating deterministic keys. Bitcoin Improvement Proposals (github.com/bitcoin/bips), Assigned 10 September 2013.
  7. Criminals Increasing SIM Swap Schemes to Steal Millions of Dollars from US Public (Alert I-020822-PSA). FBI Internet Crime Complaint Center, 8 February 2022.