Custodial wallet
Also · Custodian · Exchange wallet · Not your keys
A custodial wallet is a service that holds the keys for you. You have a claim on bitcoin, not bitcoin. It is simple to start with and exposes you to freezes, hacks and bankruptcy.
In a custodial wallet, an exchange, an app or a bank controls the private keys. What you see as a balance is an entry in their database, a promise to pay you bitcoin on request. Most people’s first bitcoins sit in such a wallet, because buying with a bank transfer requires an intermediary.
“Not your keys, not your coins” sums up the risk. The custodian can be hacked, go bankrupt, freeze your account under legal pressure or simply fail, and your recourse is a claim in court. Custodial wallets also see everything you do. For small operational balances the convenience may be worth it. For savings, moving to self-custody is the step that makes Bitcoin different from a bank.
In French · Portefeuille dépositaire (custodial)
