ZachXBT's Hardware Wallet Criticism Ignites Debate Over Crypto Self-Custody

On-chain investigator ZachXBT has sparked a heated debate in the crypto community after calling hardware wallets ‘complete garbage’ for serious use. In a Telegram post, he argued that people handling large amounts should use a spare iPhone as a dedicated signing device instead.

ZachXBT detailed several frustrations with hardware wallets, particularly Ledger. He cited dead batteries, mandatory firmware and software updates that break simple actions, UI changes, and bugs that prevent signing multisig transactions. ‘Ledger is the worst and Ledger Live has regular updates for UI/apps for no good reason that break simple actions,’ he wrote.

Security researcher Axel Bitblaze agreed with the criticism but questioned whether a phone is truly a better replacement, noting it still leaves ‘one device and one seed as the single point of failure.’ He recommended a 2-of-3 Safe multisig setup with separate signer devices, offline seed storage, and testing before large transfers.

Tornado Cash co-founder Roman Storm supported the idea but pointed out that mobile wallets lack BIP39 passphrase support, which he considers the main advantage of hardware wallets. He called on software wallet makers to add this feature for better self-custody.

Hardware wallet companies responded. Trezor noted that a phone runs a full operating system with many attack points, while a dedicated hardware wallet keeps private keys isolated. Keystone Wallet acknowledged ZachXBT’s point about an isolated phone but argued that most users are better served by purpose-built devices due to security discipline requirements.

Ledger has not directly responded but published a post stating its core security model keeps private keys offline: ‘A private key that never touches the internet can’t be phished, deepfaked, or prompt-injected out of existence.’

The debate highlights ongoing tensions between convenience and security in crypto self-custody. While hardware wallets remain popular, incidents like a recent $282 million loss from an offline device due to social engineering show no solution is foolproof.

Source: https://cryptopotato.com/zachxbts-hardware-wallet-criticism-ignites-debate-over-crypto-self-custody/