What is Custody?
Custody refers to who holds the private keys that control crypto assets. With self-custody the user holds their own keys (and full responsibility). With third-party custody, an exchange or custodian holds the keys on the user's behalf, trading sovereignty for convenience and recoverability.
Why Custody matters
Understanding Custody is part of building a solid mental model of how Bitcoin, blockchain and Web3 systems actually work. Concepts in the Security category sit at the foundation of the broader stack — get them right and the rest is far easier.
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- Bitcoin 101 — interactive fundamentals course
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Related terms
- Private Key — The secret number that authorises spending from an address.
- Wallet — Software or hardware that manages your private keys.
- Cold Storage — Keeping private keys offline for security.
More security terms
- Seed Phrase — A human-readable backup of a wallet's private keys.
- 51% Attack — An attack where one party controls majority hash power.
- Slashing — Destroying part of a validator's stake as punishment.
- Multi-Signature (Multisig) — A wallet requiring multiple keys to spend.
- Hardware Wallet — A dedicated device that signs transactions offline.
- Hot Wallet — A wallet whose keys live on an internet-connected device.
- HD Wallet (BIP-32) — A wallet that derives many keys from one seed.
- Address Reuse — Receiving multiple payments to the same address.
Keep exploring
Continue with the full blockchain glossary — 136 terms in total — or read the developer blog and FAQ for deeper context.