Understanding Self-Custody and the Importance of Seed Phrases

Test Your Knowledge

1. What is the main characteristic that defines a self custody crypto wallet?

A) It allows exchanges to manage your private keys.

B) It requires a third party to authorize transactions.

C) You are in full control of your private keys.

D) It automatically stores your assets on a centralized server.

2. Which of the following is a benefit of using a self custody wallet?

A) Your funds are insured by the government.

B) You avoid the risks of centralized custodians.

C) You can’t lose access to your wallet.

D) You earn interest from the platform automatically.

3. Which type of self custody wallet provides the highest level of security by storing private keys offline?

A) Software wallet

B) Paper wallet

C) Cloud wallet

D) Hardware wallet