> For the complete documentation index, see [llms.txt](https://docs.solflare.com/solflare/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.solflare.com/solflare/self-custody/the-power-of-self-custody.md).

# The Power of Self-Custody

Self-custody means you hold the private keys to your crypto, not an exchange. Learn how it works in Solflare and what it makes you responsible for.

#### What is self-custody?

Self-custody means you hold the private keys to your crypto yourself, instead of trusting an exchange or another company to hold them for you. A self-custody wallet, also called a [non-custodial wallet](https://www.solflare.com/glossary/self-custodial-or-non-custodial-wallet/), gives you direct control of your assets on the blockchain with no intermediary. Solflare is a self-custody wallet for Solana.

How much self-custody matters depends on where you live and how you use crypto. For some people, it is a convenience. For people facing unstable banks or currency controls, it can be essential.

#### Custodial vs non-custodial wallets

A custodial wallet is an account at a centralized exchange or app that holds the private keys for you. You see a balance, but the exchange controls the keys and decides when you can withdraw. Exchanges can pause trading or withdrawals during heavy volatility, outages, or insolvency. When FTX collapsed in November 2022, customers could not withdraw their funds.

A non-custodial wallet such as Solflare keeps assets on the blockchain at all times. Your private keys never leave your control, so no company can freeze, lend out, or lose your funds. The phrase "[not your keys, not your coins](https://www.solflare.com/glossary/not-your-keys-not-your-tokens/)" sums up the difference.

A full comparison is in [Custodial vs non-custodial wallets: what's the difference?](https://www.solflare.com/crypto-101/custodial-vs-non-custodial-wallet-whats-the-difference/)

#### How a self-custody wallet works

A self-custody wallet works through public-key and private-key cryptography. Your public key is your wallet address, which you share to receive funds. Your [private key](https://www.solflare.com/crypto-101/what-is-a-private-key-in-crypto/) signs transactions and must stay secret.

In Solflare, a 12- or 24-word recovery phrase sits above your private keys. One recovery phrase can generate many separate wallets, each with its own address and private key, through [derivation paths](https://help.solflare.com/en/articles/14430062-can-i-import-wallets-from-multiple-derivation-paths). Anyone who has the phrase controls every wallet created from it.

#### What you take on with self-custody

Self-custody means nobody can recover your funds for you. If you lose your recovery phrase, Solflare support cannot restore it, and the assets in those wallets are gone for good. If someone else gets your phrase, they can move your funds. Protecting the phrase is the price of full control. The next pages cover the benefits of non-custodial wallets and the best practices for keeping a wallet safe.

To learn more about recovery phrases, read [The seed phrase: your key to the stronghold](https://www.solflare.com/crypto-101/the-seed-phrase-your-key-to-the-stronghold/).