Not Your Keys, Not Your Coins

"Not Your Keys, Not Your Coins" is a core principle within the Bitcoin community that underscores the importance of self-custody and control over private keys. Private keys are cryptographic codes that grant access to and control over bitcoins. If these keys are held by a third party—such as a cryptocurrency exchange or online wallet provider—you do not have true ownership of your funds. Instead, you are trusting that entity to safeguard your assets, which inherently carries risks.

This concept gained widespread attention following the collapse of several centralized crypto exchanges, where users lost access to their holdings due to mismanagement or fraud. These events highlighted the vulnerabilities of entrusting funds to custodial platforms. As a result, many Bitcoin users embraced the mantra "not your keys, not your coins" and moved their bitcoins into self-custodial wallets, where they alone hold and control their private keys.

Using self-custodial wallets—software or hardware tools that allow users to manage their own private keys—places full responsibility for security on the individual but maximizes control and reduces reliance on third parties. While this approach requires users to adopt good security practices, such as backing up keys and safeguarding device integrity, it empowers them to have complete ownership and control over their cryptocurrency holdings, aligning with Bitcoin’s decentralized ethos.