Ouch! You got me really aggressive and in attack mode with the first three sentences. I already drafted my response before I saw this

NOT YOUR KEYS, NOT YOUR COINS. Exchanges are never the best options, there have been series of serious hacks in history like FTX, MTGOX, BYBIT, etc and the fact that exchanges breeds centralization and trusting a third party which is still the same thing Bitcoin came to eliminate. Exchanges are tools of the government and can seize your funds upon request and deprive you of the right to use your money whenever you want.

Self-custody is the best. People should be more inclined to using open-source non-custodial wallets like Electrum, Blue wallet, Sparrow e.t.c with strong RNG and make it a custom to extend the security of their funds with a passphrase. If we observe very well, the only wallets that has great chance of surviving the ColdCard attack were those that used a passphrase.

I agree with you, people just lack knowledge and that’s why they follow the crowd and don’t really know exactly what they should do when it comes to keeping their holdings safe. Op claims self custody isn’t reliable, I can’t blame him for saying that. maybe he had a bad experience with a self custody wallet. My friend and I usually thought trust wallet was the reliable in the past because it’s a self custody wallet, and we had our seed phrase, unknown to us that it was a closed source wallet, and the code could have a bug or even be compromised my the company without our knowledge. And we started hearing how people lost their fund they kept on the trust wallet.
Then I made research on the possibility and how people lost coin through self custody wallet and I realised that you don’t only go for self custody wallet, but an open source self custody wallet that the code could be seen and reviewed by everyone using it.

Another thing is that some wallets today are doing things as if they are open source, but they are not open source. Many people on this forum even thought Coldcard is an open source hardware wallet, but that is not true. It is one of the worst wallet that I have ever know. A wallet that is reproducible but not open source are as worst as a close source wallet because they are not open source also.

As someone new to Bitcoin, one of the first things I learned was that self-custody is essential. That’s why I ordered my first cold wallet, which is open-source.

However, after hearing about the recent Coldcard incident, I’ve started seeing more people say that self-custody may not be as safe or reliable as we think. Honestly, this is a little upsetting and confusing because it seems to contradict much of what I’ve been reading and learning for a long time.

This is where your knowledge is first put to test to know what exactly you’re doing, you ordered an hardware wallet not a cold wallet, although hardware wallet are still cold wallet but there are some cold wallets that are made off from software wallets.

Now the question is what criteria was used to order that hardware wallet or your choice for it, how did you generate your seed phrase and is there extension and also how you back up your seed phrase and pass phrase all contributes to the safet of your coin


I would say If you still have this doubts then you haven’t really understand why self custody was actually your pick and probably you’re just following the crowd. This might be harsh but you need to understand the reason for self custody and sincerely if you do I don’t think this current cold card wallet saga will make you doubt your choice

Human isn't 100% perfect which is why you saw that vulnerability in coldcard wallet but it's good to be your own bank and don't forget that being your own back comes with a big responsibility to keep your wallet safe and the kind of wallet to use.

Simple mistakes can make your wallet get compromised which is the reason why you need to stay on the safe side by adding passphrase to your seed phrase. Exchanges are the worse to keep your coins because it isn't yours anymore until you withdraw it. Exchange and noncustodial wallet aren't 100% free from hackers.

Yes, I did ask this from another thread. Self-custody could at the dilemma right now because of the Coldcard incident. Maybe the best thing for now is to look for ways to create our own private key and not really to hardware device that supposed to have 128 entropy.

So maybe we can go back to the discussions like coin-flip or dice roll. Gonna be interesting on what the community will have to say. But one thing is for sure, there is no really a perfect system for us. And perhaps we should also talk about the lessons that we have learn from this attack.

In ETFs, you buy a piece of their stock so if that gives you more confidence in how you invest, there's no debate on that. But owning a piece of a very limited supply of bitcoin in my hands is way better than these stocks that could be printed more by whichever financial company or etf you invest with. There's really the pros and cons for each of these investments that we like and I think that we're all agreeing to disagree that each of them has its own beauty, advantages and disadvantages but all of them carries the same risk.

No matter what anybody says, i still strongly believe that self custody is superior and it is reliable if done correctly.

It’s obvious that the Cold Card incident was a serious failure on the part of Coinkite in their implementation of the Coldcard firmware seed generation code, but this is not proof that self custody itself is unreliable or that people should start handing their keys over to BlackRock, JP Morgan, Fidelity or some exchanges.

Yes, some people will try to use this incident as leverage to argue that ordinary people should stop holding their own keys and instead start relying on ETFs, banks, or exchanges, but in reality they are saying all that because the narrative benefits them(i’m talking about the the large custodians and institutions) and so they prefer Bitcoin to remain concentrated under regulated entities but they are not saying the whole truth.

These centralized custodians also have their own long history of failures too.
We’ve seen a couple of exchange hacks in the past, bankruptcies like Mt. Gox and FTX, insider fraud, regulatory actions, and accounts being frozen.
If this is not proof enough that the principle of “not your keys, not your coins” still exists for a reason, then I don’t know what it is.

I can only say as much i can.
But if someone thinks that they will feel more comfortable trusting BlackRock or JP Morgan with their Bitcoin, then fine, go on, knock yourself out, it’s your choice.
But it doesn’t still change the fact that they’re just simply exchanging one set of risks for another and it isn’t automatically the safer option for them in every situation, especially for those people who value censorship resistance, protection from seizure, and the freedom to move their funds to and fro without needing anyone’s permission first.