Self-custody
Self-custody is the practice of directly managing and securing your own digital assets rather than relying on third-party institutions like banks or other traditional financial institutions.
With self-custody, you maintain complete responsibility for storing and protecting the private keys and seed phrases that secure access to your blockchain-based digital assets. Embodying the expression "Not your keys, not your coins,” self-custody of digital assets has grown in popularity along with public familiarity with crypto wallets and peer-to-peer finance.
Self-custody is used by institutions, high-net-worth individuals, and small-scale cryptocurrency holders alike. While this approach offers complete control over your digital assets, it also requires careful security planning and backup strategies to protect against loss or unauthorized access. Many digital asset owners use self-custody wallets for a portion of their holdings, and a third-party custodian for another portion, based on their individual goals, abilities, and perceived risks.
Implementation Methods
- Hardware wallets – Specialized physical devices that add security through extremely tailored functionality paired with high-security design. Like other types of wallet, hardware wallets require specific confirmation of transactions, with many models requiring stronger or additional mechanisms for approval.
- Cold storage – Completely offline storage methods with no access to the Internet. Cold storage wallets may take the form of hardware or software.
- Hot wallets – Internet-connected wallets that offer convenience, though they are more vulnerable to security risks.
Importance of Resilience and Security
Those who choose self-custody wallets must understand the risks of losing their wallet keys — and thus losing all of their digital assets. It is critical to have reliable and well-protected backups of seed phrases and other secrets.
Vault12 provides additional protection for self-custody wallets by decentralizing the storage of encrypted pieces (shards) of wallet seed phrases with trusted Guardians or devices in a distributed Digital Vault. This approach breaks up private keys and seed phrases into separate shares stored across multiple locations to eliminate single points of failure. These shares are not usable on their own, but can be recombined when needed to conveniently restore wallets.
Related Terms
Vault12
Vault12 is the pioneer in crypto inheritance and backup. The company was founded in 2015 to provide a way to enable everyday crypto customers to add a legacy contact to their cry[to wallets. The Vault12 Guard solution is blockchain-independent, runs on any mobile device with biometric security, and is available in Apple and Google app stores.
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You will lose your Bitcoin and other crypto when you die...
...unless you set up Crypto Inheritance Management today.
It's simple — if you don't worry about crypto inheritance, nobody else will — not your software or hardware wallet vendors, not your exchanges, and not your wealth managers. So it's up to you to think about how to protect the generational wealth you have created, and reduce the risks around passing that crypto wealth on to your family and heirs. What are the challenges with crypto inheritance?
- Crypto Wallets are difficult to use and do not offer crypto inheritance management. In fact, most of them tell you to write down your seed phrase on a piece of paper, which is practically useless.
- Some people back up their wallet seed phrases or private keys on paper, local devices like hardware wallets or USBs, or in the cloud. All of these options have severe drawbacks that range from hacking to accidental loss to disrupted cloud services.
- Software wallets operate onspecific blockchains, yet your crypto assets span multiple blockchains. For inheritance to work, you must be able to manage inheritance across every blockchain — now and forever.
Crypto Inheritance Management: Secure, Self-Custody Crypto Inheritance and Backup
Vault12 is the pioneer in Crypto Inheritance Management, offering a simple yet powerful way to designate a legacy contact and pass on your crypto assets—like Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) —to future generations. Built for everyday users yet robust enough for the most seasoned crypto enthusiasts, Vault12 Guard ensures your wallet seed phrases and private keys are preserved in a fully self-sovereign manner, across all Blockchains.
At the heart of Vault12 Guard is quantum-resistant cryptography and a decentralized, peer-to-peer network of trusted Guardians. Your critical information is never stored in the cloud, on Vault12 servers, or even on local devices—dramatically reducing the risk of a single point of failure. By fusing a powerful software layer with the Secure Element of iOS devices (Secure Enclave) and Google devices (Strongbox), Vault12 Guard locks down your private keys against present and future threats.
Our innovative approach harnesses social recovery, enabling you to appoint one or more trusted individuals or mobile devices as Guardians. These Guardians collectively safeguard your protected seed phrases in a decentralized digital Vault—so there’s no need for constant lawyer updates or bulky paperwork. Should the unexpected happen, your chosen legacy contact can seamlessly inherit your crypto assets without compromising your privacy or security.
Preserve your digital wealth for generations to come with Vault12 Guard—the simplest, most secure way to manage crypto inheritance and backup.
Take the first step and back up your crypto wallets.
Designed to be used alongside traditional hardware and software crypto wallets, Vault12 Guard helps cryptocurrency owners back up their wallet seed phrases and private keys (assets) without storing anything in the cloud, or in any single location. This increases protection and decreases the risk of loss.
The first step in crypto Inheritance Management is making sure you have an up-to-date backup.
The Vault12 Guard app enables secure decentralized backups, and provides inheritance for all your seed phrases and private keys across any blockchain, including Bitcoin, Ethereum, and others, and for any crypto wallet.
Note: For anyone unfamiliar with cryptocurrencies, Vault12 refers to wallet seed phrases and private keys as assets, crypto assets, and digital assets. The Vault12 Guard app includes a software wallet that works alongside your Digital Vault. The primary purpose of this is to guard your Bitcoin (BTC) and Ethereum (ETH) wallet seed phrases, private keys, and other essential data, now and for future generations.
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