#51 Untangling: Crypto Custody

In this episode of the Untangling Web 3 podcast, we tackle one of the most pressing questions in the world of cryptocurrency: how should you custody your assets to keep them secure?

The phrase "not your keys, not your coins" highlights the perceived risks of storing digital assets on centralized exchanges. In this episode, we delve into the various custody options available to crypto users and provide insights on what to consider when choosing the best method for safeguarding your assets.

Highlights from the episode:

• Custodial Services: We explore the fully custodial model where a third party manages and secures your digital assets. This method is analogous to traditional banking, offering ease of use but also central points of failure. We discuss the pros and cons of using major exchanges like Coinbase and Kraken, and highlight the potential risks of technical issues, hacks, and regulatory challenges.
• Non-Custodial and Self-Custody Solutions: Moving on to non-custodial options, we explain how wallets allow users to maintain control over their private keys. This includes software wallets like MetaMask and hardware wallets like Ledger and Trezor. We emphasize the importance of securely backing up seed phrases and the potential pitfalls of managing your own security.
• Innovative Security Techniques: We touch on advanced cryptographic techniques such as multi-signature and threshold cryptography, which enhance security by distributing control across multiple parties. These methods strike a balance between security and convenience and are increasingly used by institutional custodians like BitGo and Fireblocks.

This episode underscores the importance of understanding your options for crypto custody. While custodial services offer convenience and user-friendly experiences, they come with significant risks. Non-custodial and self-custody solutions provide greater control and security but require careful management of private keys and seed phrases.

As the crypto market evolves, it is crucial to stay informed about best practices for securing your assets. Remember to do thorough research, consider insurance options, and stay vigilant about potential security threats. Join us next time as we continue to untangle the complexities of Web 3 and help you navigate the ever-changing landscape of cryptocurrency.

Learn more about Web3 at:

https://untanglingweb3.com/

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Untangling Web3 is brought to you by hosts Jack Davies and Alec Burns, with music by Daniel Paigge. Got a question or topic suggestion? Send us an email at [email protected].

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The views we express here are our own, and do not represent the views of our employers. Nothing discussed or stated in the show should be considered advice.