Self-custody 101: get your bitcoin off the exchange

Why leave the exchange at all

When your bitcoin sits on an exchange, you don't own bitcoin. You own an IOU from a company that says it holds bitcoin for you. Usually that's fine, until it isn't. Mt. Gox halted withdrawals in 2014. Celsius froze customer accounts in 2022. FTX collapsed months later with customer funds missing. In every case, people who had withdrawn to their own wallets were unaffected.

"Not your keys, not your coins" isn't a slogan. It's a description of how the system works: whoever controls the private keys controls the coins. Self-custody means that's you.

Pick the right wallet for the job

Think of it like cash. You carry a little in your pocket and keep savings somewhere safer.

• Mobile wallet (hot). An app on your phone, connected to the internet. Great for spending and small balances. Treat it like a pocket wallet.
• Hardware wallet / signing device (cold). A dedicated device that keeps keys offline and shows you exactly what you're signing. Coldcard, Trezor, BitBox02, Jade or a DIY SeedSigner are all solid options. This is where savings belong.
• Multisig. Several devices must each approve a spend, for example 2 of 3. It removes any single point of failure. Worth learning once your stack is large enough that losing it would change your life.

Your seed phrase is the wallet

When you set up a wallet it gives you 12 or 24 words: your seed phrase. Those words are your bitcoin. The device is replaceable; the words are not. Lose the device and you restore from the words. Lose the words and the device together, and the coins are gone for good.

• Write the words on paper, by hand, in order. Consider stamping them into steel later.
• Never type them into a website, a computer, a password manager or a phone. Never photograph them. No legitimate support person will ever ask for them.
• Store the backup somewhere safe from fire, flood and curious house guests. Many people keep two copies in separate locations.
• An optional passphrase adds protection if someone finds your words, but forgetting it means losing the funds. Only use one if you'll back it up properly.

Withdraw safely, step by step

1. Set up and test your wallet first. Before any real money arrives, write down the seed, then wipe and restore the wallet from your backup. If the restore works, your backup works.
2. Get a receive address from your wallet. On a hardware wallet, confirm the address on the device's own screen. Malware can swap addresses on a computer screen, not on the device.
3. Send a small test amount from the exchange and wait for it to arrive.
4. Send the rest. Check the first and last several characters of the address every time.
5. Mind the fees. Exchanges often charge a flat withdrawal fee, so fewer, larger withdrawals are cheaper than many small ones. Check the live network fees if you're sending from your own wallet.

A word on privacy

If you bought on an exchange that verified your identity, it knows which addresses you withdrew to. Two easy habits help. Use a fresh receive address for every deposit (good wallets do this automatically). And eventually, run your own node so your wallet isn't asking someone else's server about your balance. Our node guide covers the easy way to do that.

Plan for the day you're not around

Self-custody means no "forgot password" link, for you or for your family. Write a short letter that explains what you own, what kind of wallet it's in, where the backups are and who can help. Store it separately from the seed. Your family shouldn't need to be experts. They just need to know it exists and who to call.