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Last updated 2026-11-05

What Is a Decentralized Wallet?

A decentralized wallet keeps your keys on your side and signs only what you approve. This page explains what that changes compared with an account on an exchange, in practical terms.

Who this is for

Anyone choosing where to hold BTG beyond a few days, and anyone who has been told to move funds off an exchange without being told what replaces it.

What it is

A decentralized wallet stores a private key and uses it to sign. The wallet does not hold coins; the chain holds balances, and the wallet holds the ability to move them. TokenPocket and MetaMask are common examples, and either works with Bitgold once the network is added.

A custodial account is the opposite arrangement. A company holds the keys, you log in with a password, and the company signs when you ask. What you see is a balance in someone else's database, not an address you control.

The difference shows up in the interface. A self-custody send produces a signature request you approve on your device. A custodial withdrawal produces a review queue and a confirmation email. The intent is identical; the authority is not. This is decentralization at the scale of one account, as described in What Is Decentralization?.

Why it matters

"Not your keys, not your coins" summarizes the first difference. In a custodial account the balance on screen is a promise. If withdrawals are frozen, the number stays visible while nothing moves, and you wait for a company to decide.

Self-custody flips the exposure. Nobody can freeze your address, and nobody can restore it if the key is gone. That responsibility is why Private Key, Mnemonic and Wallet Password matters more than any other page in this chapter.

Neither model is risk-free. A custodial account concentrates counterparty risk; a self-custody wallet concentrates operational risk on you. Pick based on which failure you could detect and act on in time, not on which one sounds more modern.

Common misunderstandings

  • "A decentralized wallet stores my BTG." It stores the key. The balance lives on the chain and stays visible in a block explorer whether or not the app is installed.
  • "Deleting the app deletes the wallet." It deletes the encrypted copy on that device. With the recovery phrase, the same wallet can be restored elsewhere.
  • "Self-custody removes risk." It removes a counterparty and adds key management. Both can cost you the balance.
  • "Custody is always the wrong choice." For a small trading balance it can be a deliberate trade. The mistake is not knowing which model you are in.

Key takeaways

  • A decentralized wallet holds your key and signs locally; a custodial account holds the key for you.
  • "Not your keys, not your coins" is about authority, not price or safety.
  • Self-custody removes the counterparty and adds a backup only you can keep.
  • Both models fail, in different ways; know which failure you are exposed to.

Next steps