Self-Custody vs Hosted Wallets vs Privacy Practices and Data Handling: How They Differ
How self-custody vs hosted wallets and privacy practices and data handling interact, and what to check before you rely on either.
Two terms that interact
Self-Custody vs Hosted Wallets and Privacy Practices and Data Handling are separate ideas, but in practice they shape each other. Comparing them clarifies what actually changes the outcome for you.
Who controls the keys
In self-custody you control the private keys and the funds are yours to move. With a hosted wallet the service controls the keys and you rely on their terms and availability.
The trade-off
Self-custody removes counterparty risk but puts the burden of address accuracy and backups on you. Hosted wallets are simpler but depend on the provider.
What is collected
Operators collect identity, payment and activity data to run checks and meet obligations. The scope is set in their privacy policy, which is worth reading before you share documents.
How long it is kept
Retention periods vary and are often tied to regulatory duties. Ask what is kept and for how long if that matters to you.
How they combine
Read self-custody vs hosted wallets alongside privacy practices and data handling rather than in isolation: a favourable figure in one can be undercut by a strict term in the other. The combined effect is what matters, and it is worth confirming both before you act.
What to verify in writing
Confirm the current terms for both self-custody vs hosted wallets and privacy practices and data handling with the operator, and keep the reply. A single written confirmation covering both avoids acting on a half-understood rule.