Self custody is not reliable

[Aanuoluwatofunmi]

Let's not poison people's mind against the use of self-custody, because this is the best option, but people must understand why they must prevent themselves from any vulnerability and also be well informed about how to go into the required process, that you are using a non-custodial wallet does not give you 100% maximum Protection except you are being careful on what you do and maintain both security and privacy normal standards.

[Oasisman]

That was more than just an attack, it actually created that kind of narrative against self custody. If you look it up anywhere in the internet today, you can see a lot of people discussing how disappointed about the incident and distrusted the use of self custody.
Instead of trying to understand how to improve security, they tend to suggest moving to a different type of storage, like ETFs and non custodial wallets, totally forgetting they are also losing control over their assets.

They just have to wait until similar thing happen outside self custody and they will realize how risky it is.

[Dr.Bitcoin_Strange]

Actually, I won't doubt that some persons might have regretted why didn't held their coins in a centralized system which possibly would have prevented them from being victim of the Coldcard vulnerability, but let's not forget that people choose self custody wallet not only because of the security but also because of privacy, some of this people don't want to have their identity out their and don't want to face the challenges of centralized system where your asset can still be ceased upon request by the government.

Non custodial wallet or centralized system is not the best option, unless you already decided that you want to use Bitcoin under centralized governance, like people that invested in Bitcoin EFT and holding on exchanges, meanwhile this method means putting your asset control under the authority that can cease or freeze them and it is exactly what Bitcoin was created to prevent. Tight security can prevent someone from losing their asset on self custodial wallet.

[lovesmayfamilis]

This is the message that's been indirectly passed by what happened with ColdCard hardware wallet, and it's why my friends believe that this attack was planned to make people have doubts about self custody.

That's right, OP. I see this in the channels where there is a discussion of what happened and in the question "Who can I trust now?" I seem to see bots answering the same way, that it is useless to believe in your "strong" hands and strength now. "Trust centralization," and we, in turn, will control you. This is what governments strive for so that not a single dollar, and in this case, Satoshi, does not fly by without their attention. People who lose significant amounts become mouthpieces for those who support the idea of centralization, thereby introducing newcomers into a complete misunderstanding of what is happening. But sane people are obliged to trust and verify any information, filtering everything that they consider to be specially organized for provocations.

[OcTradism]

What did you expect? The best way to promote your services is when your competitors have a problem. Therefore, it is natural for BlackRock to exploit this event to promote its products. For example, when Binance withdrew because of MiCA^[1], the first thing they did was promote the Self-Customized Wallet.

[1] Binance CEO: 70% of EU User Withdrawals Moved to Self-Custodied Wallets After MiCA Exit

According to a report citing Binance CEO Richard Teng, approximately 70% of the funds that EU users withdrew after the exchange suspended services moved into self-custodied wallets. Only 30% ended up on MiCA-compliant platforms. For a regulatory regime built on the premise that licensing leads to consumer protection, that number is a quiet indictment of how detached the official playbook is from user behavior.

It is very reasonable fund migrations of users from the EU.

It's not because of centralized exchanges' legal issues to comply with MiCA because with time many exchanges will have licenses for their business, but it's also because of their concerns about tax policies in many nations in the Europe. Things in regulations and in taxation policies change very quickly in European nations.

I believe that Netherlands will not be the only nation or last one to have such strict, terrible and like killing their citizens in coming years.
Netherlands plan to tax 36% unrealized profit since 2028.

To prepare for that, possibly to protect their assets and wealth, meanwhile moving funds from exchanges to non custodial wallets is a smart choice. Before there are something better, they will consider them in the future but for now, non custodial wallets for storage is best.

[davis196]

This is the message that's been indirectly passed by what happened with ColdCard hardware wallet, and it's why my friends believe that this attack was planned to make people have doubts about self custody.

Nah, this attack was planned so that the hackers could steal 40 million dollars worth of crypto(I forgot the exact amount). I have doubts that the ColdCard hackers thought "hey, lets hack this wallet, so that all the crypto enthusiasts start questioning self custody". The ColdCard case proves that no technology is perfect. Every piece of technology has it's flaws, but everyday improvement keeps going and the companies, who fall behind at improving their products and services end up in ruins. I find it weird that the ColdCard hack caused so much FUD on the forum. Some forum trolls are posting BS about the ColdCard hack "starting a revolution" and being the first nail in the coffin for Bitcoin. That's just absurd.

[Alvin_talk]

This is the message that's been indirectly passed by what happened with ColdCard hardware wallet, and it's why my friends believe that this attack was planned to make people have doubts about self custody.

Unfortunately many will fall for this, its just human nature, so many will just end up following the opinion or suggestion of their favourite celebrities and elites without actually reading between the lines. They fail to understand and realise that this attack was not because self custody failed but because a company failed its customers. In my opinion coldcard is a fraudulent organisation and needs to be investigated because they were already aware of this flaws in their firmware and did absolutely nothing to resolve the situation.

[Oluwa-btc]

About the deliberate trap caused by coldcard incident that you claimed, I don't think so. What happened is just the issue limited to coldcard itself, it's their firmware flaw, a software bug, which can't be used to condemn other self-custody hardwallets. It's just a reminder that we should be sure of the gadgets we are entrusting our money to.

Most definitely! Blames should be about Coldcard for not being up to date about their weaknesses and also predict or detect possible attacks like this on their firmware.
Yeah, I believe this is just a bankers sponsored agenda against Bitcoin one way or the other or this is simply just me making predictions.
But then again, the victims of this particular Coldcard and thought they was doing something worthy and worthwhile. They followed all the process to protect their seed phrase only to end up with such fatal  compromise. I cannot say how I will react, if I lost 7btc of my crypto holdings.

Self Custody also the best. It should be considered unwise to switch towards banks and centralised exchanges after this.

[YellowSwap]

Let them push the trust us agenda, nothing has changed so far I believe, only stupid people will believe the centralised entities and institutions, they have messed up more than hardware wallet.

It's not too long that Micheal Saylor hands was forced, that he started selling Bitcoin to rescue STRC.
We all still remember what happened to FTX.

Binance played a bigger role in October 2025 that lead to the death of few people.
They have caused so much pain than anything else In this crypto space.

[Z-tight]

I'm sure a lot of Coldcard victims no longer believe in the self-custody mantra or maybe even in the BTC network, but who can blame them? Losing everything you've worked for surely has its effect on the victims. Take note that we would have also blamed them if they had lost these funds through a centralized or custodial service.

Do i still believe in self-cusody and in BTC? 100%, but i cannot predict in what state of mind i would be in if i lost all the coins i have worked so hard to save. Self custody is reliable and i would always recommend it, but i am also human to understand how people would naturally react when they lose all their money--not of their own error-- in a hardware wallet of all places.

[Nheer]

When Bybit was hacked, people were moving their coins from exchanges to noncustodial wallet. When a noncustodial wallet was hacked, people were moving their money from noncustodial wallet to exchanges.

So that is what people are. Most people do not have the right knowledge to know what exactly to do.

There is nothing better than open source noncustodial wallets, but do things right. Use passphrase to extend your seed phrase with an impossible to guess and impossible to brute force passphrase of go for multisig wallet.

It's all due to lack of knowledge that's why most people get confused about what to do. This is one of the many benefits of being a member of this forum because we are being exposed to the right knowledge and what to do in situations like this.

People need to understand that trusting a third party with your assets is not the best the move but self custody is. Self custody being the best comes with lots of responsibilities and if neglected it results to our wallet being compromised and exposed. But people think that self custody has no responsibility or they think it's too complicated and stressful that's why they prefer using a custodial wallet. It's true when you use non custodial wallet and do things right you are better off with it than using a custodial wallet.

[Japinat]

Just because of what happened recently, we should not forget the meaning of “not your keys, not your coins.”

If you trust your coins to a third party, maybe its more secure in one way because they are regulated and responsible for the agreement between you and them. But at the same time, you also lose some privacy and control over your own funds. So both options have positive and negative side.

For me, I would still choose self custody. It may also have risks, but as long as I protect my keys properly, that's still the safer option for me.
it does not mean what happen to ColdCard hardware wallet could happen to other wallet.

[Ucy]

Ofcourse, Self-custody is not reliable for children, meaning it's for adult alone. Unfortunately lots of "children" got involved in crypto, and it becomes necessary to create a controlled system for them with babysitters to handle everything.

By the way, Bitcoin or true cryptocurrency in general is for people who deserve freedom rather than being in bondage of fiat system

[Smartprofit]

I don't think the hackers' actions were aimed at discrediting the very idea of ​​self custody of Bitcoin. That statement sounds too much like a conspiracy theory.🙋

I think it's actually simpler... The hackers wanted to gain economic profit. They were driven by purely mercenary considerations. This, in my opinion, is a major cybersecurity problem. You can be attentive and careful for years, but it only takes one mistake for disaster to occur. Essentially, this is the price you pay for freedom and independence. It must be acknowledged that not everyone is willing to pay such a price.

Another thing is that centralized platforms will undoubtedly exploit this situation to discredit the idea of ​​self custody of Bitcoin. We need to be prepared for this.

This is simply a signal to all of us. We need to gradually complicate our Bitcoin storage system. This isn't a story about self custody of coins being bad. This is a story about trusting other people's software being bad.  You only need to trust yourself. But to do that, you have to become paranoid yourself. We have to know and be able to do a lot to trust ourselves.🧖

[Renampun]

That's why self-custody isn't for everyone.. while we strongly recommend using self-custody, it comes with a significant responsibility, we, as users, are fully responsible for our assets. So, it's up to each individual to decide whether they trust a large company or trust self-custody to safeguard their assets.

But personally, I still believe self-custody is best. Despite the Coldcard issue, I believe it's entirely the provider's fault for not recognizing the vulnerability sooner and addressing it before it became a problem.. however, that doesn't mean self-custody is a failure, it just means we need to be more selective in choosing what we trust.

[tbct_mt2]

That's why self-custody isn't for everyone.. while we strongly recommend using self-custody, it comes with a significant responsibility, we, as users, are fully responsible for our assets. So, it's up to each individual to decide whether they trust a large company or trust self-custody to safeguard their assets.

But personally, I still believe self-custody is best. Despite the Coldcard issue, I believe it's entirely the provider's fault for not recognizing the vulnerability sooner and addressing it before it became a problem.. however, that doesn't mean self-custody is a failure, it just means we need to be more selective in choosing what we trust.

What happened with Coldcard users are different. It's not like their practice were wrong in security, and they did everything right like many guides on how to use wallets. It's only the Coldcard wallet is crap and they had a severe security hole for hackers to exploit, and Coldcard users can not do anything.

It's only their responsibility to believe in a bad hardware wallet but as users, who know that is bad before this hack. They read reviews about Coldcard, that is good and they buy it to use.

Your opinion like "self custody isn't for everyone" is not right in this discussion. It is right in general as newbies are not people who should quickly go non custodial by themselves. They can start with exchanges, custodial wallets, then gradually shift towards self custodial wallets.

[sokani]

ETFs are far more reliable than you holding Bitcoin yourself.
Self custody is not reliable, let crypto exchanges do the holding for you.

Instead of trusting some Bitcoin wallet that promised self custody it's better to trust JP Morgan.
It's better to have trust in BlackRock so that you can sleep well in the night.

You can't wake up and see your Bitcoin moved into another person's wallet address.
Never ever trust Self Custody.

This is the message that's been indirectly passed by what happened with ColdCard hardware wallet, and it's why my friends believe that this attack was planned to make people have doubts about self custody.

Come to think about it, who benefited the most out of this attack?, exactly...
This message might look too early but I'm sure that what's going to be pushed from now on is people needs to trust centralised platforms more.

People needs to trust Blackrock, fidelity, and others than self custody, but nothing beats self custody even after what happened, this attack will be an eye opener to why you and I should be picky when it comes to self custody.

Self Custody is still Superior to centralised options, with multi signature setups and 100 Dice rolls your wallet will be more stronger than ever

I wouldn't say the attack was planned. The thing is, whenever something unfortunate happens to a hardware device, I don't expect exchanges and ETFs to let it go unnoticed. They will always seize the opportunity to throw shades at self-custody. So I'm not surprised at all. The purpose of the message was to create FUD, but the fact still remains that self-custody is the best.

[Stepstowealth]

Self Custody is still Superior to centralised options, with multi signature setups and 100 Dice rolls your wallet will be more stronger than ever

Self custody superiority depends on the carefulness and cautiousness of the person practicing it in some cases, because a careless holder makes self custody much less reliable than a third party helping to hold your investment. On self custody many people just need some sincerity with themselves because if you are the careless type and you know, be truthful to yourself that you will need extra consciousness for self custody to really work well for you. If you take that carelessness and do not tell yourself the truth, you will regret you did not trust a third party to help because your carelessness will cost you a lot.

[Sally9256]

This is the message that's been indirectly passed by what happened with ColdCard hardware wallet, and it's why my friends believe that this attack was planned to make people have doubts about self custody.

Come to think about it, who benefited the most out of this attack?, exactly...
This message might look too early but I'm sure that what's going to be pushed from now on is people needs to trust centralised platforms more.

People needs to trust Blackrock, fidelity, and others than self custody, but nothing beats self custody even after what happened, this attack will be an eye opener to why you and I should be picky when it comes to self custody.

Self Custody is still Superior to centralised options, with multi signature setups and 100 Dice rolls your wallet will be more stronger than ever

It's so funny reading this and I almost thought it was your write up. It's really funny how some people think self custody is the problem in this whole situation but I will say they just lack the understanding and they don't know the importance of self custody. Self custody is far more better option and with extra security set up it becomes even more stronger. I don't understand why people would prefer trusting someone else with their funds.

Self custody is not to be blamed here, I think it's about paying attention to what wallet you use and verifying if you can trust the manufacturer. It's why using an open source wallet is recommended. If everything is verified and done well it is more reliable as everything is under your control.

[Hatchy]

Self Custody is still Superior to centralised options, with multi signature setups and 100 Dice rolls your wallet will be more stronger than ever

I wouldn't be surprised if this kind of thinking becomes more common over time. People are often quick to focus on mistakes instead of looking for solutions.Yes, what happened wasn't easy, but it doesn't change the facts. Self custody is still the best option.. no matter how people try to see it, Centralized platforms have a much longer history of hacks than hardware wallets.

To be honest, the news was surprising to me because I'm more used to hearing about exchange hacks. That's why we on this forum keep warning others not to leave their assets in custodial wallets provided by exchanges but many still ignore the advice. So, I don't expect many positive discussions about self custody right now, and that's understandable. However, we shouldn't ignore the fact that self custody remains one of the safest ways to protect your assets when used properly. You want to trust institutions with your money? Alright go ahead but you will understand in the nearest future why your decisions were a mistake..