From Cointelegraph · By Helen Partz
Crypto executives are divided over whether self-custody was ever designed for beginners, while approaches such as multisignature wallets and seedless backups come with 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 be critical to Bitcoin’s broader adoption, as the ability to “be your own bank” remains one of its defining features.
Recent incidents involving Ledger and Coldcard have exposed weaknesses in hardware wallets, widely recommended as one of the safest ways to hold crypto because they keep private keys offline.
Implants in some Ledger devices stole recovery phrases, while a Coldcard firmware bug allowed attackers to recreate private keys and steal funds.
Related: Ledger’s early implant warnings deserved more action, Karpelès says
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 them.
“Self-custody was never designed with newcomers in mind,” he told Cointelegraph.
He said simpler designs helped computers reach a wider audience and that Bitcoin custody now faces a similar challenge.
Trezor Model One, the world’s first hardware wallet, was released in 2014. Source: Trezor
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, 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,” Justin Hutzler, chief technology officer of Synergy Network, said.
Single signature versus multisig. Source: BitGo
Multiple approvals also cannot prevent every attack.
Safe Labs’ Rumalla said several signers could still authorize a malicious transaction if they were all deceived by the same compromised interface.
Related: Can crypto users trust the supply chain behind hardware wallets?
Seedless wallets remove one risk, introduce others
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.