When Bitcoin sits on an exchange, you hold an account balance - a claim against a company - not the Bitcoin itself. If that company fails, is hacked or freezes withdrawals, your claim joins a queue. Australian holders have limited consumer protection here, because digital assets themselves remain largely unregulated.
Self-custody flips that. The keys are yours, the Bitcoin is verifiably yours on-chain, and no counterparty sits between you and your holdings. The trade-off is responsibility: key generation, backups, recovery and succession all become your problem to solve properly.
That responsibility is exactly why documentation matters. A self-custody setup that only one person understands is a single point of failure with extra steps. Written custody architecture, tested recovery and an executor pathway are what turn self-custody into a durable arrangement.