Definition of Custody

Custody

By Cryptomcmillan1 | Updated on May 24, 2020

In the context of cryptocurrency, a "custodial" asset means an asset is placed under the care of a third party. This is similar to how banks have custody over their customer's funds. A Custodial Wallet refers to a wallet whose private key management falls under the care of a company. Examples of Custodial wallets include Coinbase, Nexo and other wallets where users do not have access to their private keys.

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Related Terms

Cloud Mining

Mining on blockchains through rented processing power rented from companies that host the physical equipment.

Trustless

Entirely verifiable, without needing to trust or assume an action is done completely and in good faith.

Node

Within the blockchain network, the nodes are computers that connect to the network and have an updated copy of the blockchain

Burned Tokens

Tokens which have been sent to addresses whose private key are not known, effectively becoming unusable.

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