Custody Models
The spectrum of bitcoin custody ranges from full self-custody to fully custodial exchange wallets. The right model depends on technical ability, threat model, and need for inheritance or recovery.
Self-Custody (Sovereign)
You hold all private keys. No third party can freeze, seize, or lose your funds.
- Single-sig — One seed, one hardware wallet. Simplest, but single point of failure.
- Multisig — Multisig with multiple keys you control. Removes single point of failure at cost of complexity.
Best for: Technically proficient users, long-term HODLers, privacy maximizers.
Collaborative Custody
You hold the majority of keys; a service holds one. You retain spending sovereignty, but the service can help with recovery if you lose a key.
- Unchained Capital — You hold 2 keys, they hold 1 (2-of-3)
- Casa — Fee-based plans with 2-of-3 or 3-of-5
Best for: Users who want recovery guarantees without full third-party trust.
Semi-Custodial / Assisted
A third party holds one or more keys and provides ongoing security services. You can still spend unilaterally in some configurations, or the provider co-signs.
Best for: High-net-worth individuals, businesses, those prioritizing convenience.
Inheritance Planning
- Create a written inheritance plan with key locations and recovery instructions
- Use key shares or a trusted provider as a backup
- Avoid cloud storage or third-party dependence for seed backups
- Revisit setup yearly, patch firmware, verify backups
Comparison
| Model | Key Control | Recovery Help | Complexity | Privacy |
|---|---|---|---|---|
| Single-sig self | 100% | None | Low | High |
| Multisig self | 100% | None | High | High |
| Collaborative | Majority | Yes | Medium | Medium |
| Semi-custodial | Minority | Yes | Low | Low |
Related
- Multisig — Technical implementation of threshold signatures
- Specter Desktop — DIY multisig coordinator
- Bisq — Non-custodial exchange