Most average people don't want self-custody, which is why most Bitcoin investors use a centralized mechanism like CoinBase or Robinhood.

A well-known and insured exchange is by far the safest way to keep your Bitcoin. These large companies are extremely secure, and they are insured if they get hacked, so you will never lose money no matter what.

Self-custody is only a good idea for amounts under say a few hundred dollars--the amount you could afford to lose. Keeping your life savings on your physical person is completely nuts, assuming you don't have some legal reason to do so, i.e. that your money was obtained illegally and you fear prosecution, or you are trying to evade taxes.

Hardware wallets aren't actually safe 100%. There are some circumstances that beyond our control, but one failure of a hardware wallet does not justify the future of the rest of the hardware wallets.

Its normal to develop fear but compare to the high risk trusting centralized exchanges over hardware wallets, there is higher risk to lose our bitcoin there because of the inside jobs.

Centralized exchanges do not exist to favor us, but this is business, they will do everything to make the most of advantage when it comes to our bitcoin. That's why I prefer to be with my own bank with bitcoin rather than trusting those centralized exchanges that slowly stealing our bitcoin.

Instead of getting fear trusting a hardware wallet, just consider the Coldcard incident as a warning that being cautious and strict discipline is the safest option so that you won't fall to another hardware wallet negative experience. Hardware wallets have still lapses, as it isn't build through perfection, but if you know the risk involved in keeping your bitcoin in a centralized exchange, you would not want to save there but have your own hardware wallet where you can make the highest form of safety and security.

One mistake is not mean to discourage us, but it serves as a good warning so we can all be responsible on our part as bitcoin holders.

When even ledger with billions in RnD does shit like leaving compromised servers out for anyone to get and having backdoors, I am certainly not trusting any hardware wallet.

Cryptography and physical security principles in combination with being discreet  beat everything. Nothing else has stood the test of time.

Its not the other way around. Anyone can still do self custody without being a victim of these news like hardware wallet compromise or noncustodial exploit. It depends on how a user able to protect himself from the dangers outside of his wallet. If youre a guy who has a alot of activity and transactions, make sure to be cautious at anything you do and connect with the wallet to avoid this mess and potential nightmare.

I dunno but its always safer to be the one controlling your own fund rather a 3rd party custodian.

How do the banks win here? Most of the banks are not involved in crypto, and so there's no issue for them, whatever happens to the hardware wallets. And about the fiasco with coldcard, the banks also have their own hacking incidents and I won't go far because in my country there's plenty of it, and it has become common knowledge.

From the very start, there have been FUD that have been spread towards bitcoin and it's not only with the hardware wallets. We've been fed with this and I can remember when I was still new back then. There's no 100% safe and secure and that's why there's a consistent update from these hardware wallets for its software to maintain security if a flaw has been found. Your fear is valid but there's no control to it so, let's start by being proactive.

If majority will stop trusting the hardware wallet, then expect that will be more reported incidents of losing their bitcoin due to exchange hacks or freeze platforms. Self-custody is no longer there as everything is already in the custody of the centralized exchange, so they can do all their future plans for our bitcoin because the full control is all theirs.

But we don't want this to happen so we wont fall on this kind of trap. The best thing is to secure more our hardware wallet and never let those scammers and hackers, or centralized exchanges to steal our bitcoin.

Exploits do happen, the only evil agenda there is with these greedy and lazy cons who took the hard earned money of people trusted them.

This is true and I think if we're near to that scenario, we'll see more signs that it's the exchanges or whoever is behind them want us to trust more custodial platforms than being non custodial.

I consider it even a healthy human reaction.  It means people still have a functional brain and see what went wrong and what could go wrong.

While this event was the worst fear of all victims involved in it, it was on the other hand a good thing for the people who previously considered Hardware Wallets to be an impenetrable, always secure way of holding your Bitcoin with close to zero effort.  The reality is a lot worse than that and Hardware Wallets are still people relying on Third Parties, some thing we were not really supposed to do.

Do not get me wrong.  I like the idea of Hardware Wallets.  Hell.  I like some of these products a lot.  But no thing can beat a classic airgapped setup on which you can install and run what ever Bitcoin Software you want.  I do not really know how many people are auditing every single new Electrum release but I can only guess there are at least a few of them.  And with the age of 'AI' where you can drop a source code in it and ask it to analyze what may be malicious or unsecure in it for you, it is even easier to have 'a second opinion'.