Self-custody is a habit, not a one-time choice.

Many guides treat self-custody as a checklist: buy a hardware wallet, write down your seed phrase, done. That approach treats security as a snapshot rather than an ongoing process. In practice your situation changes: you move house, you have children who find things, your backup becomes outdated because you switch to a new wallet.

In practice I regularly see people who wrote down their seed phrase years ago and have not checked since whether the paper is still legible, complete and in the right place. That is not an edge case, it is the norm.

The most common causes of loss I encounter are not stolen private keys from hackers, but simple human errors: a wrongly noted word in the seed phrase, a backup thrown away during a move, or a password manager whose owner loses the master password themselves.

Phishing also remains a real risk, but the attacks are rarely technically sophisticated. They exploit time pressure and panic: a fake alert that your account is compromised, with a link asking you to enter your seed phrase 'for verification'. No legitimate service ever asks for that.

Some conclude from this that keeping funds on an exchange is simpler and therefore safer. That is a misconception: you shift the risk of your own mistakes to the risk of a platform going bankrupt, getting hacked, or blocking your access. Both routes carry risk, but they are different risks.

The right question is not 'wallet or exchange', but which amount you hold where and why. A small amount for active use on a regulated platform is different from long-term holdings you would rather manage yourself.

Concretely, this means: check at least once a year that your backup is still complete and legible, without retyping or photographing the seed phrase digitally in the process. Store copies in physically separate locations, and inform at least one trusted person about the backup's existence without sharing its contents.

Also periodically test whether you actually understand the recovery process, for example with a small test amount on a new wallet. Many people only discover during a real emergency that they misunderstood a step.

Self-custody gives you control, but control requires maintenance. Anyone who buys a hardware wallet and then never looks at their security again runs the same risk as someone who buys a fire extinguisher but never checks whether it still works.

This is not an argument against self-custody, quite the opposite. It is an argument for taking it seriously as an ongoing process rather than a box to tick.