Crypto Custody: Easy Way to Manage and Secure Crypto
While blockchain technology and cryptocurrency are transforming the world, the challenges of managing and protecting your crypto assets can become a difficult task. To manage and secure your cryptocurrencies you can choose between self or third-party custody. The self-custody of crypto assets refers to the fact that the person has complete control over crypto assets. Crypto Custody is the third party that holds the private keys to the funds.
What is Crypto Custody?
To protect and manage crypto assets, the easier option is to choose a third-party custodian. Crypto custody is a service provider that stores digital assets on behalf of a customer. In basic terms, Crypto custody is like a bank where you can store your cryptocurrency, protect it from theft, and manage liquidity.
Why choose Crypto Custody?
This solution is typically for institutional investors, so it offers institutional-level security and insurance. But it’s also suitable for individual investors or even beginners in the crypto world. Because it may be the safer option for new users that are inexperienced with key management. Overall it is perfect for those who do not want to deal with the technical aspect of securely storing digital assets.
Firstly, digital asset custodians are responsible for the safekeeping of crypto assets. However, the difference is that these custodians do not hold the assets themselves but are responsible for the custody of the private keys to these assets. A private key is a large, randomly-generated number with hundreds of digits and letters, which lets you access owned crypto. Crypto custodians give the ability to recover access to tour crypto assets if you lost or forgot the password to the account.
Well, the primary responsibility, no matter how small or large your funds are, is to protect your private keys and backups. And not just that, the private keys and backs must be kept separately to protect them from any other possible harm. And professional crypto custodians may help a great deal. They offer security against the risk concerning the confidentiality, availability, and integrity of the private keys and their backups.
What are the fees?
One of the disadvantages of Crypto Custody is that providers probably will charge you. So don’t forget to check the conditions before moving your assets. Moving crypto in and out of your account can incur fees. They are different in every Crypto Custodian. To understand better, you can divide them into three categories:
- Custody fee
- Setup fee
- Transaction fee
Usually, fees are percentages and depend on the value of crypto assets you own. For example, Crypto Custody Orbitos don’t have setup fees, and transactions to the account don’t cost anything. You will be charged just for our transactions and custody fee. The custody fee is paid per year or month and, in most cases, is less than 1%.