Why Self-Custody Matters
When you buy Bitcoin on an exchange, the exchange holds your Bitcoin for you. Self-custody means you hold the keys. Here's why that matters and how to do it safely.
What Is Self-Custody?
Your Bitcoin sits in the exchange's wallet. You have an IOU — a promise that they'll give it back when you ask. If the exchange gets hacked, goes bankrupt, or freezes withdrawals, you may lose everything.
Your Bitcoin is controlled by a private key that only you hold. No company, government, or hacker can move your Bitcoin without your key. You are your own bank.
This is the most important principle in Bitcoin. If you don't control the private keys, you don't truly own the Bitcoin. It's that simple.
What Can Go Wrong?
These aren't hypothetical risks. Billions of dollars have been lost because people trusted exchanges with their Bitcoin:
The largest Bitcoin exchange at the time collapsed after a hack. Users waited over a decade to receive partial recovery.
The founder died with the only passwords to the exchange wallets. All customer funds were permanently locked.
One of the world's largest crypto exchanges collapsed overnight due to fraud. Millions of users lost access to their funds.
The lending platform froze all withdrawals, then filed for bankruptcy. Users couldn't access their own Bitcoin.
All of these losses could have been prevented with self-custody.
What Is a Hardware Wallet?
A hardware wallet is a small physical device — about the size of a USB stick — that stores your Bitcoin private keys completely offline.
Even if your computer is infected with malware, a hacker cannot steal your Bitcoin because the private keys never leave the device. When you want to send Bitcoin, the hardware wallet signs the transaction internally and only sends the signed result back to your computer.
Offline Security
Your keys are stored on the device, never exposed to the internet
Easy to Use
Modern wallets have simple companion apps. No technical skills needed.
Recoverable
Lost your device? Your recovery phrase lets you restore your Bitcoin on a new one.
Recommended Hardware Wallets
These are some of the most trusted hardware wallets in the Bitcoin community.
Links marked (affiliate) support the project at no extra cost to you.
SeedSigner
~$50 (DIY build)DIY, stateless & air-gapped
SeedSigner is a completely open-source, do-it-yourself Bitcoin signing device built from off-the-shelf parts (Raspberry Pi Zero, camera, and screen). It's stateless — it never stores your keys, so there's nothing to steal if someone finds it. Perfect for the DIY-minded Bitcoiner who wants full transparency.
Coldcard
From $157.94Maximum security, Bitcoin only
Coldcard is built exclusively for Bitcoin and is trusted by some of the most security-conscious Bitcoiners in the world. It supports fully air-gapped operation via MicroSD card, so it never needs to connect to a computer. Made in Canada with a dual secure element design.
Blockstream Jade
From $64.99Air-gapped & open-source
Built by the team behind Bitcoin's Liquid Network, Jade offers a fully air-gapped signing experience via camera-based QR codes. It's fully open-source, so anyone can audit the code. One of the most affordable ways to start self-custody.
Trezor
From $59The original hardware wallet
Trezor pioneered the hardware wallet industry in 2014 and remains one of the most trusted names in Bitcoin security. Every line of code is open-source and publicly auditable. With a simple interface and strong track record, Trezor is a great choice for anyone stepping into self-custody.
Ledger
From $79The most popular hardware wallet
Ledger devices have secured millions of users worldwide. With Ledger Live, you can manage your Bitcoin, check your balance, and send transactions all from a single app. Their secure element chip is certified by independent security labs.
BitBox02
From $139Swiss-made, minimalist & secure
Built in Switzerland by Shift Crypto, the BitBox02 is a compact, no-nonsense hardware wallet with a strong focus on privacy and simplicity. It comes in a Bitcoin-only edition that strips away everything unnecessary, reducing the attack surface to a minimum.
Cypherock X1
From $99No single point of failure
Cypherock uses Shamir Secret Sharing to split your private key across 4 tamper-proof cards and the device itself. Even if you lose one card, your Bitcoin is safe. No seed phrase to write down or worry about.
Affiliate disclosure: Some links above are affiliate links (Trezor, Ledger, BitBox02, Blockstream Jade, Cypherock). We may earn a commission at no extra cost to you. This helps support the development of this free calculator. SeedSigner and Coldcard links are not affiliate links.
Getting Started in 4 Steps
Self-custody might sound intimidating, but it's simpler than you think.
Choose a hardware wallet
Pick one from our recommendations below. All seven are reputable, well-reviewed, and purpose-built for securing Bitcoin.
Set up your device
Follow the manufacturer's instructions. The device will generate a private key that never leaves the hardware. Write down your recovery phrase (if applicable) and store it somewhere safe offline.
Transfer your Bitcoin
Send a small test amount first. Once confirmed, transfer the rest of your Bitcoin from the exchange to your wallet address. Always double-check the address.
Secure your backup
Store your recovery phrase in a fireproof, waterproof location. Consider a metal backup plate. Never store it digitally, never take a photo of it, and never share it with anyone.
Common Concerns
What if I lose my hardware wallet?
Your Bitcoin isn't stored "on" the device. It's on the blockchain. The device just holds your private key. As long as you have your recovery phrase backed up, you can restore your wallet on a brand new device. The lost device is useless to anyone without your PIN.
What if the hardware wallet company goes out of business?
Your recovery phrase follows an open standard (BIP-39). You can restore your keys on any compatible wallet from any manufacturer. You're never locked in to one company.
Is self-custody worth it for small amounts?
A common rule of thumb: if you hold more Bitcoin than you'd be comfortable losing, move it to self-custody. For many people, that threshold is around $500-$1,000. Hardware wallets cost $65-$100, which is a small price for peace of mind.
Can't I just use a software wallet on my phone?
Software wallets (like BlueWallet or Sparrow) are better than leaving Bitcoin on an exchange, but your phone is connected to the internet and can be compromised. A hardware wallet keeps your keys completely offline, which is the gold standard for security.
Ready to Secure Your Bitcoin?
Don't wait until the next exchange collapse. Take control of your Bitcoin today.
Disclaimer: Some links on this page are affiliate links (Trezor, Ledger, BitBox02, Blockstream Jade, Cypherock). If you purchase through those links, we may earn a commission at no additional cost to you. This page is for educational purposes only and does not constitute financial advice. Always do your own research before purchasing any hardware wallet or making investment decisions. This site may also display ads; see /about for full disclosure.