ZachXBT’s criticism of hardware wallets ignites debate over crypto self-management

Mobile wallets may offer a smoother experience, but critics warn they pose a much wider attack surface than dedicated hardware.

ZachXBT sparked a debate on his Telegram channel by claiming that hardware wallets are “complete garbage” for serious cryptocurrency use.

He says people who often handle large amounts of money are better off using a spare iPhone as a sign-in device.

ZachXBT details the daily struggles of hardware wallet users

The cryptocurrency investigator’s Telegram message was candid.

“Hot opinion: All hardware wallets are complete garbage and we do not recommend using them for important tasks such as signing transactions or storing funds,” he wrote.

He went further, arguing that a separate iPhone used only as a wallet could provide a better experience than any hardware currently on the market, and criticized Ledger in particular.

“Ledger is the worst, Ledger Live updates the UI/app regularly for no good reason, interrupting simple operations,” ZachXBT claimed.

Returning to X, he listed some issues that hardware wallet users can face when making typical time-sensitive high-value transactions. Issues include dead batteries, required device and software upgrades, UI changes, and site bugs that prevent multisig transactions from being signed.

Soon after, security researchers, wallet developers, and regular cryptocurrency users began reacting to ZachXBT’s post. Axel Bitblaze agreed with the on-chain detective’s criticism of hardware wallets, but questioned whether mobile phones are really a good replacement for them, since they still leave users with “one device and one seed as a single point of failure.”

Instead, we recommended a 2-of-3 secure multisig setup with separate signer devices. He also advised crypto holders to store seed phrases offline and test before transferring large amounts of funds, as well as keep spending wallets separate from long-term holdings.

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Roman Storm, co-founder of Tornado Cash, also weighed in and agreed with the idea behind ZachXBT’s proposal, but argued that mobile wallets are missing a key feature: support for BIP39 passphrases.

The developer, who was convicted in 2025 of operating an unauthorized money transfer business and is facing a lengthy prison sentence, pointed out that the additional passphrase layer is a key benefit of hardware wallets and called on software wallet makers to add support for it. In his view, this will make self-storage more convenient.

The argument also drew reaction from hardware wallet companies, the largest of which, Trezor, said that because mobile phones run a complete operating system, there can be many attack points. Hardware wallets, on the other hand, are designed as dedicated devices that keep private keys away from the general computing environment.

Keystone Wallet now has a more balanced position. The team acknowledged that ZachXBT was “not wrong” about the possibility of isolated phones, but argued that since phone security relies heavily on strict user discipline, most users would be better served by a dedicated unit.

leisure stance

As of this writing, the Ledger has not directly responded to ZachXBT’s claims. However, the company published a timely post on its X account stating that its core security model is based on keeping private keys away from internet-connected devices.

“Private keys that never touch the Internet cannot be erased from existence through phishing, deepfakes, or prompt injections,” it says. “That’s what the hardware bet is all about.”

Still, such devices are not completely immune to human error. For example, in an incident earlier this year, a victim lost $282 million in BTC and LTC from an offline device due to a social engineering scam.