Self-custody is freedom — and responsibility
There is no password reset, no support hotline, no chargeback. Every risk below has destroyed real fortunes. Every one of them is avoidable with discipline.
Losing your seed phrase
Your 12/24-word recovery phrase is your bitcoin. Lose it together with the device, and the coins are gone forever — cryptographically unrecoverable.
Write it on paper, then stamp it into steel (it survives fire and flood). Keep 2–3 copies in separate, secure locations. Never store it digitally: no photos, no cloud, no password manager, no email.
Theft & the “$5 wrench attack”
If someone knows you hold bitcoin, you can be coerced — physically or through extortion — into handing it over. A single-sig wallet signs under pressure just as easily.
Practice privacy: never brag about holdings. Use a passphrase to create a hidden decoy wallet with a small amount. For serious wealth, use 2-of-3 multisig with keys in different locations — no single location can move funds.
Phishing & fake software
Fake wallet apps, cloned websites, malicious browser extensions and “support agents” all exist to harvest your seed phrase. It is the #1 attack vector in Bitcoin.
Rule zero: your seed phrase is NEVER typed into anything except a hardware wallet during recovery. Download software only from official sources, verify signatures/checksums. The device screen is the source of truth — not your computer.
Address swapping malware
Clipboard malware silently replaces the receive address you copied with the attacker’s. You send to the wrong place and only notice when it’s too late.
Always verify the receive address on the hardware wallet’s own screen before sharing it, and confirm the destination address on the device before signing. Check first and last characters at minimum.
Supply-chain & fake devices
Tampered devices from unofficial resellers can arrive pre-seeded with an attacker’s recovery phrase. Everything you deposit flows straight to them.
Buy only directly from the manufacturer or official resellers. Check anti-tamper packaging. Never use a device that arrives with a pre-filled seed card — generate the seed yourself, on-device.
User error & bad backups
Sending to wrong networks, mixing up passphrases, forgetting which wallet the backup belongs to — the enemy is rarely a hacker; it’s haste.
Do a full recovery rehearsal with a small amount before storing real funds: wipe the device, restore from backup, confirm access. Document your setup (wallet type, passphrase hint, locations) for your future self.
Inheritance failure
If you die or are incapacitated without a plan, your bitcoin dies with you. An estimated millions of BTC are already stranded this way.
Write an inheritance letter: what exists, where the backups are, how to recover — sealed, with your will or notary. Multisig with a trusted key agent or service (e.g. Nunchuk-assisted) makes inheritance structurally solvable.
Passphrase amnesia
A BIP-39 passphrase creates an entirely separate wallet. Forget one character — case, space, typo — and the wallet it protected is gone forever.
Treat the passphrase exactly like the seed: back it up separately, in a different location than the seed words. Verify the wallet’s fingerprint/xpub after every entry. Test recovery from scratch at least once.