Custody and control

Who can move the funds?

A wallet lets someone view a balance and approve transfers. Custody describes who has that control.

With a personal, non-custodial wallet, you control the keys that approve transfers. The wallet usually gives you recovery information, often a list of words, that can restore access if your device is lost.

With a custodial account, a company controls the keys. You sign in and ask the company to make a withdrawal or payment for you. The balance shown in the account is a promise from that company until the funds reach an address you control.

Why use a personal wallet?

A personal wallet lets you pay directly and does not depend on a purchase provider remaining available for every transfer. It also makes the payment path easier to understand: buy, receive in your wallet, then pay the recipient.

Control also brings responsibility. There may be no password-reset desk that can restore a lost recovery phrase. This is manageable when you set up the wallet carefully and keep the recovery information private and offline.

If a vendor holds the funds first

Some purchase services place cryptocurrency in a hosted account before allowing a withdrawal. That is temporary vendor custody. A complete purchase process is not finished until the withdrawal arrives in the intended external wallet.

Before buying, check:

• whether withdrawal to a personal or third-party wallet is available;
• which exact currencies and networks the service supports;
• the withdrawal fee and minimum amount;
• whether the service delays new withdrawals;
• what identity checks apply in your location.

Protecting recovery information

Recovery words can give full control of a wallet. Never type them into a website because someone claims to offer support, a refund, or account verification. A legitimate recipient only needs your receiving address, not your recovery phrase or private key.

Store recovery information where device loss, theft, or damage will not remove both the wallet and its backup. Follow the wallet maker's official setup instructions.

A useful distinction

A wallet app is not the same thing as the wallet's control. Deleting an app does not necessarily destroy the wallet if the recovery information is safe. Conversely, knowing an account password does not mean you control a vendor's wallet keys.

Next, compare self-custody wallet options, set up a personal wallet, or see how control changes hands as a payment moves from purchase to confirmation.