After all, there must be someone who is holding your digital assets. You don’t run a server or database to keep track of digital assets … the things banks and governments do?
Well, actually you do. Or, you could. This was the central technical insight behind the first cryptocurrencies. Cryptocurrency networks are actually open and shared global networks: they aren’t owned by any one group, company, team, person or government. You don’t need permission to join or access them. They’re run by collections of people not entirely unlike you, who run software on their computers so they can serve as nodes on the network. Each node synchronizes with the rest of the network and contains its own independent copy of the network data. This secures the network overall through decentralization: if the network is running on three thousand nodes, it’s nearly impossible to compromise enough of them at the same time to harm the network overall; it would be a bit like trying to catch a school of fish in a small net.
This network is what stands in for a bank, or another custodian. Your digital assets live on it, and as we learned in the last lesson, your digital identity is what authenticates you to the network through your possession of secret information: your private cryptographic keys, held safely in your crypto wallet.Crypto wallets like MetaMask are called self-custodial for this reason: You are the custodian and the only one who can access your private keys. There is no other custodian required to give you permission to control your assets, so there is nobody who can prevent you from interacting with them. The network is always on and available to you. But as is the case with a home safe, you are responsible for security—keeping your private keys and Secret Recovery Phrase safe.
The advent of self-custody has introduced an era of true digital ownership, something we’ll look at in the next lesson.
