• Self-custody of private keys has become more important than ever.
• Glassnode Lead On-Chain Analyst James Check explains why and how to do it in a few simple steps.
• He argues that while third-party custody and semi-custodial solutions may appear easier, they also have their own, bigger risk vectors.
Cryptocurrency users have become increasingly aware of the importance of self-custody when it comes to protecting their assets. With the growing popularity of digital assets, it is now more important than ever for users to understand the basics of securely storing their crypto. Glassnode Lead On-Chain Analyst James Check recently spoke with Cointelegraph to explain why self-custodying is so important and how to do it in a few simple steps.
Check began by emphasizing the importance of taking the time to research and understand how to properly protect one’s crypto. He compared it to owning gold or cash, saying that “you need to exercise a level of responsibility.” While third-party custody and semi-custodial solutions may appear more user-friendly, the analyst argued that they also have their own, even bigger, risk vectors. He said that when it comes to custody, “there are no solutions, only trade-offs,” and that being in full control of one’s own crypto and eliminating third-party risk is worth the effort of learning how to keep a wallet’s 12-word seed phrase safe.
Check then went on to provide some practical advice on how to self-custody crypto. He recommended that users invest in a hardware wallet, such as Ledger or Trezor, which provides a secure storage solution for private keys. He also said it’s important to remember that the wallet should be kept safe and secure — both physically and digitally — as well as backed up regularly.
Finally, the analyst suggested that users should also look into their jurisdiction’s laws and regulations when it comes to crypto storage. He said that depending on the country, users may need to be aware of certain rules and regulations when storing digital assets, or even face taxes or penalties if they don’t.
In the end, Check summarized his advice by saying that users need to take responsibility for their own crypto and exercise caution when it comes to protecting their assets. He concluded by saying that taking the time to understand and apply the proper security measures is worth it in the long run.