Custody models side by side

Custody describes who controls the keys that move an account's assets. With a custodial service, the company holds the keys and shows you a balance inside its own system. You sign in with a password, and the company decides how withdrawals, limits and account recovery work. With self-custody, a wallet app or a hardware device holds the keys on equipment you control, and the blockchain itself shows what the address holds. The difference is easiest to see when something goes wrong. A forgotten custodial password can be reset through identity checks, while a lost self-custody key usually cannot be rebuilt by anyone. The trade is convenience on one side and direct control on the other.

Each model has its own failure points. A custodial account depends on the company's security, its financial health, its terms of service and its willingness to process requests. If it freezes or closes the account, you deal with its support process rather than with a network. Self-custody removes that dependence but adds device loss, damaged backups, malware and mistakes such as sending to the wrong address. Some people use both, keeping a small working balance in one place and the rest in another, though that is a personal arrangement rather than a rule. Before choosing, write down who holds the keys, who can reverse an error, who answers if access is lost and what the written terms say about each of those.