When you create an account at the bank, they issue you an account number for identification. Pair that account number with the bank name, and you’d be able to receive money with it like it’s a wallet.
Traditional banks control your money and can freeze accounts, block transactions, or impose restrictions at any time.
The bank manages your account (Third-party custody) for you, and whenever you need access, you must go through one of their authorized channels. Since the bank is the custodian, they get to do what they like, including sanctioning you.

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What are Crypto Wallets

A crypto wallet is like your personal bank account, but one that only you control, with no bank or third party standing between you and your money(Self-Custody).
Self custody means you have complete control over your funds. No intermediaries, no permission needed, no censorship.
Instead of an account number, your crypto wallet has two key pieces:
  • A public key (like your account number), which you share to receive money.
  • A private key (like a super secure master password), which proves that you own and control the funds.
Anyone can send funds to your public key (your wallet address), but only someone with the private key can move or spend them.

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How Crypto Wallets Work

When you create a crypto wallet, it generates a pair of cryptographic keys: one public, one private. These keys together prove ownership and allow you to sign transactions securely.
  • Your public key (or wallet address) can be shared with anyone so they can send you crypto.
  • Your private key should never be shared. It is what allows you to authorize (or “sign”) transactions and move your assets.
Unlike banks, there’s no customer support number you can call if you lose your private key; if you lose it, you lose access to your money forever.
If you lose your private key or someone else gains access to it, your funds are gone forever. There’s no recovery mechanism.
This is why people say, “Not your keys, not your coins.” If any one get’s access to your keys, they have total access to your momey.
When you control your wallet and hold your private keys, this is called self-custody. It means:
  • You have full control over your money.
  • No one can freeze or censor your assets.
  • You don’t rely on intermediaries to approve your transactions.
Self custody gives you financial sovereignty. You become your own bank with complete control over your assets.
Crypto wallets come in different forms, including software wallets (apps on your phone or computer). Hardware wallets (physical devices that store your keys offline for extra security).
For large amounts, use hardware wallets for maximum security. For daily use, software wallets offer convenience.
In short, a crypto wallet is how you access DeFi. Your digital vault, with no bank manager looking over your shoulder.