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Wallets, keys and custody
The wallet interface is only the front door. Ask who controls the keys that can authorize a transfer.
Identify who can authorize a transaction.
A wallet is a tool for viewing accounts and authorizing actions. Assets are represented in the network's ledger; they are not files stored inside a phone. Private keys or another authorization arrangement control the ability to act.
Self-custody means you manage that authority and its recovery. A custodial platform normally manages keys while showing you an account balance. Its password recovery helps restore platform access, but does not eliminate insolvency, withdrawal or operational risk.
A hardware wallet can isolate signing keys, but it cannot make a harmful transaction safe. You must still check the destination and action on a trusted display. Choose custody by understanding responsibilities, rather than by assuming one product removes every risk.
Let’s use numbers · hypothetical example
Hypothetical: a phone breaks. With a compatible recovery method you may restore a self-custody account; with a platform account you follow its recovery process. Neither outcome is guaranteed merely because a balance once appeared.
Keep in mind
Never give a teacher, support agent or this course your private keys.
Your turn
Draw who holds keys in two imaginary custody arrangements and who can freeze access.
A quick check before we move on
Where is asset ownership recorded?
- Only inside the wallet app
- Inside a screenshot
- In the network state
Check answer
In the network state The wallet interacts with the network record and provides authorization tools.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.