Crypto Leaders Debate if Self-Custody Was Ever Meant for Beginners

Self-custody becomes a focal point for new users

Recent security issues with hardware wallets have led crypto executives to question whether self-custody—holding your own digital assets in a wallet you control—was originally designed for beginners. The debate has intensified following incidents involving major hardware wallet brands like Ledger and Coldcard.

Onramp CEO Michael Tanguma noted that the early days of Bitcoin custody resembled 1970s personal computers, which required technical skills to operate. He argues that the system was not built with newcomers in mind. Safe Labs CEO Rahul Rumalla disagrees, stating that the core purpose of crypto is for everyone to own and control their assets, even if it means avoiding the need to become a security expert.

Two opposing views on user-friendliness

• Not built for beginners: Some leaders argue that managing private keys is too complex for new users and prevented wider adoption.


• Always for everyone: Others believe the ability to be your own bank is the defining feature of crypto and must be made easier, not restricted.

Hardware wallet security incidents

The push for easier self-custody comes after recent failures. For Ledger, it was reported that implants in some devices were used to steal recovery phrases. For Coldcard, a software bug allowed attackers to recreate private keys and steal funds, which one analysis estimated resulted in approximately $70 million in lost Bitcoin. These events highlight that even the safest storage methods are not immune to risk.

Why simpler systems matter for the future

As Bitcoin seeks broader adoption, the ability to manage assets without technical knowledge is a key hurdle. The source notes that just as computers became easier to use and reached a wider audience, crypto custody faces a similar challenge today. Making it simpler is viewed as critical for mainstream acceptance.

Alternative options carry their own risks

Industry players are developing new solutions, but each has trade-offs:

• Multisig (Multi-signature) wallets: These require multiple keys to approve a transaction. While they improve security, they add complexity that can be difficult for beginners to manage. Rumalla also noted that if multiple signers are tricked by the same compromised system, the funds are still at risk.


• Seedless wallets: Companies like Tangem remove the need to write down a recovery phrase (a set of words used to restore access). Instead, users must keep physical cards safe. Tangem stated that losing all cards means losing access to funds permanently. A competing company, Foundation, criticized Tangem for not having a built-in screen, arguing users might be tricked into authorizing bad transactions using only their smartphones.

Sources

• Cointelegraph