Crypto executives remain divided over whether Bitcoin self-custody was ever designed with beginners in mind, as approaches such as multisignature wallets and seedless backups each carry their own security and usability trade-offs.

“We don’t expect every driver to be a mechanic, and we shouldn’t expect everyone who wants to own their assets to become a security expert,” Safe Labs CEO Rahul Rumalla told Cointelegraph.

Making self-custody easier to use could prove critical to Bitcoin’s broader adoption, since the ability to “be your own bank” remains one of the cryptocurrency’s defining features. Unlike funds held at a bank or on an exchange, self-custodied bitcoin comes with no customer service desk to reverse a mistaken transfer or restore a lost key — raising the stakes of getting the wallet itself right.

Recent incidents involving hardware wallet makers Ledger and Coldcard have exposed weaknesses in devices that are widely recommended as among the safest ways to hold crypto because they keep private keys offline. Implants embedded in some Ledger devices stole recovery phrases, while a Coldcard firmware bug allowed attackers to recreate private keys and steal funds. Such failures draw heightened scrutiny in an industry where exchange collapses have repeatedly wiped out custodial balances, a history that made “not your keys, not your coins” a lasting catchphrase.

Was self-custody designed for beginners?

Michael Tanguma, CEO of Bitcoin custody provider Onramp, compared Bitcoin custody to personal computers in the 1970s, when users needed technical skills to assemble and operate the machines. “Self-custody was never designed with newcomers in mind,” he told Cointelegraph. He argued that simpler designs helped computers reach a wider audience and said Bitcoin custody now faces a similar challenge.

Rumalla disagreed, saying self-custody was “always meant for everyone” and that “being able to own and control your assets is the whole point of crypto.” He added that self-custody “does not mean doing everything yourself.”

Multisig improves security, but not without a cost

Multisignature, or multisig, wallets require multiple keys to authorize transactions — a structure long favored by institutions and shared treasuries because no single key holder can move funds alone — but managing them can be difficult for beginners. “Traditional multisig implementations can introduce additional complexity involving signer coordination, key backups, recovery procedures, and transaction approvals,” said Justin Hutzler, chief technology officer of Synergy Network.

Multiple approvals also cannot prevent every attack. Rumalla noted that several signers could still authorize a malicious transaction if all of them were deceived by the same compromised interface.

Seedless wallets remove one risk, introduce others

Hardware wallet maker Tangem says its seedless design simplifies self-custody by removing the need to manage a recovery phrase. Users must instead safeguard the physical devices that provide access to their funds.

Under the design, a private key is generated on one card, with backup copies stored on up to two additional devices. Tangem confirmed to Cointelegraph that losing every device would permanently lock users out of their funds, though the company said it had received no reports of users losing all their cards.

Keeping the cards safe also does not protect users from approving a malicious transaction. Zach Herbert, CEO of rival hardware wallet maker Foundation, said seedless backups can preserve self-custody but criticized Tangem’s lack of a built-in screen, which leaves users relying on their smartphones to verify transaction details. Where those details are verified — on a dedicated screen or a general-purpose smartphone — has become one of the design debates running through the hardware wallet industry, alongside the seed-versus-seedless question.

“An attacker does not need to extract your private key if they can trick you into authorizing a transaction that empties your wallet,” he said.