Keys, Wallets & Self-Custody

Your keys, your crypto. Private keys, seed phrases, hardware wallets, and everything about keeping your assets safe.

• What Is a Private Key?

  A private key is a secret 256-bit number that gives you, and only you, the ability to spend the cryptocurrency associated with its corresponding public address. Whoever knows this number controls the funds. There is no password reset, no customer support, and no recovery if it is lost or exposed.

• What Is a Seed Phrase?

  A seed phrase (also called a recovery phrase or mnemonic) is a sequence of 12 or 24 ordinary English words that encodes your master private key. The single backup for all accounts in your wallet, write it down on paper, store it safely, and you can recover all your funds on any compatible wallet software if your device is lost or destroyed.

• What Is a Hardware Wallet?

  A hardware wallet is a dedicated physical device that stores your private keys in a secure chip, isolated from your computer and the internet. Transactions are signed inside the device itself, your keys never touch a network-connected machine, making them immune to malware, phishing, and remote hacking.

• What Is a Hot Wallet vs. a Cold Wallet?

  A hot wallet is connected to the internet and ready for immediate transactions (phone apps, browser extensions). A cold wallet is kept offline and only connects briefly to sign transactions (hardware devices, paper wallets, air-gapped computers). The tradeoff is convenience versus security, hot for spending, cold for saving.

• What Is Self-Custody?

  Self-custody means you personally hold the private keys to your cryptocurrency, no exchange, no bank, no intermediary has access to or control over your funds. You are the sole party who can authorize transactions. This gives you full sovereignty over your assets but also full responsibility for their security.

• What Is a Public Key?

  A public key is a cryptographic value derived from your private key through one-way elliptic curve multiplication. It can be shared freely, anyone can use it to verify your digital signatures and derive your wallet address. Unlike your private key, exposing your public key does not compromise your funds.

• What Is a Wallet Address Derivation Path?

  A derivation path is the specific route a wallet takes to generate individual private keys from your master seed. It follows a standard notation (like m/44'/60'/0'/0/0) that tells the wallet which coin, account, and address index to derive. Different paths produce entirely different addresses from the same seed phrase.

• What Is a BIP-39 Word List?

  The BIP-39 word list is a standardized set of exactly 2,048 English words from which seed phrases are constructed. Each word maps to an 11-bit number (0-2047), making a 12-word phrase encode 128 bits of entropy plus a 4-bit checksum. The list was carefully curated so that no two words share the same first four letters, reducing transcription errors.

• What Is a Watch-Only Wallet?

  A watch-only wallet lets you monitor an address's balance and transaction history without holding the private key needed to spend from it. You can see all incoming and outgoing activity, but you cannot sign or broadcast transactions. It is a read-only view of on-chain activity.

• What Is an Air-Gapped Wallet?

  An air-gapped wallet is a signing device that has never connected and will never connect to the internet or any networked device via cable. It communicates transaction data only through physically isolated channels, typically QR codes displayed on screen or microSD cards, eliminating any digital attack surface between the wallet and the outside world.

• What Is a Passphrase (25th Word) on a Hardware Wallet?

  A passphrase (sometimes called the "25th word") is an additional user-chosen string added to your seed phrase during key derivation. It creates an entirely separate set of wallets from the same 24 words, effectively a hidden wallet that only exists when the correct passphrase is entered. Without the passphrase, the hidden wallet is invisible and inaccessible.

• What Is Wallet Software vs. a Wallet (The Account)?

  Wallet software (MetaMask, Ledger Live, Trust Wallet) is the application you use to interact with the blockchain. The "wallet" in the ownership sense is your key pair, the private key and its associated addresses. You can use many different wallet apps to access the same wallet (key pair) because the wallet exists on the blockchain, not inside any particular app.

• What Is a Custodial Wallet?

  A custodial wallet is one where a third party (usually an exchange like Coinbase, Binance, or Kraken) holds the private keys on your behalf. You access your funds through a username and password, not a private key. This is convenient but means you trust the custodian with your assets, they control the keys, and ultimately, the funds.

• What Is a Non-Custodial Wallet?

  A non-custodial wallet is any wallet where you, and only you, hold the private keys. No company, service, or third party has access to your keys or the ability to move your funds. MetaMask, Trust Wallet, Ledger, and Trezor are all non-custodial. If you created a seed phrase during setup, you have a non-custodial wallet.

• What Is a Smart Contract Wallet (Account Abstraction)?

  A smart contract wallet is a wallet whose logic lives in a smart contract on the blockchain rather than being a simple externally owned account (EOA) controlled by a single private key. It can implement features impossible with traditional wallets: social recovery, spending limits, multisig approval, session keys, and gas sponsorship, while still being non-custodial.

• What Is Social Recovery for a Wallet?

  Social recovery is a wallet recovery mechanism where a group of pre-designated trusted parties (guardians) can collectively authorize a new signing key if you lose access to your wallet. No single guardian can access your funds alone, only a threshold (like 3-of-5) acting together can trigger recovery. It eliminates the "lose your seed phrase, lose everything" failure mode.