Choose Your Self-Custody Setup
Different situations call for different setups. This guide helps you choose the right approach based on your actual needs—not over-engineer, not under-protect.
Quick Decision Tree
Answer these questions in order:
Question 1: How much Bitcoin are you securing?
A) Under $1,000 → Starter Setup
- Software wallet on your phone is acceptable
- Focus on learning before adding complexity
B) $1,000 - $50,000 → Standard Setup
- Hardware wallet recommended
- Proper backup essential
C) $50,000 - $500,000 → Enhanced Setup
- Hardware wallet required
- Consider passphrase
- Run your own node
D) Over $500,000 → Maximum Setup
- Multisig strongly recommended
- Geographic distribution
- Professional-grade operational security
Question 2: What's your technical comfort?
| Level | Description | Realistic Setup |
|---|---|---|
| Beginner | New to Bitcoin, limited technical background | Start simple, upgrade later |
| Intermediate | Comfortable with technology, can follow detailed guides | Most setups are accessible |
| Advanced | Technical professional, comfortable with command line | Can implement any setup |
Question 3: How patient are you?
| Patience Level | Implication |
|---|---|
| Want it now | Start with hardware wallet, enhance later |
| Willing to learn | Can implement proper setup from the start |
| Very thorough | Take time to do everything correctly |
Setup Recommendations
🌱 Starter Setup
For: Small amounts, learning phase, technical beginners
Components:
| Component | Recommendation | Cost |
|---|---|---|
| Wallet | Mobile software wallet (BlueWallet, Muun) | Free |
| Backup | Paper backup stored securely | Free |
| Node | Use default (public nodes) | Free |
Pros:
- ✅ Free to start
- ✅ Easy to use
- ✅ Good for learning
Cons:
- ❌ Keys on internet-connected device
- ❌ Using public nodes (privacy trade-off)
- ❌ Not suitable for significant amounts
Your action items:
- Download BlueWallet (Bitcoin-only, open source)
- Create a new wallet
- Write down the seed phrase on paper
- Store in a secure location
- Test with small amounts first
When to upgrade: When you have more than $1,000 or want better security.
→ Next step: Software Wallet Basics
🔐 Standard Setup
For: Meaningful savings, privacy-conscious users, anyone serious about self-custody
Components:
| Component | Recommendation | Cost |
|---|---|---|
| Wallet | Hardware wallet (Trezor Safe 3, BitBox02, Coldcard) | $80-150 |
| Backup | Metal seed backup | $20-50 |
| Software | Sparrow Wallet (desktop) | Free |
| Node | Public initially, own node later | Free initially |
Pros:
- ✅ Keys never touch internet-connected device
- ✅ Verifiable on hardware screen
- ✅ Resistant to malware
- ✅ Industry standard security
Cons:
- ❌ Upfront cost
- ❌ Requires learning curve
- ❌ Single point of failure (one device, one seed)
Your action items:
- Purchase hardware wallet from official source
- Follow Hardware Wallet Setup Guide
- Create metal backup
- Complete Backup Verification
- Review Before You Deposit Checklist
When to upgrade: When holdings exceed $50,000 or you want maximum security.
→ Start here: Hardware Wallet Setup Guide
🛡️ Enhanced Setup
For: Significant holdings, high security needs, privacy-focused users
Components:
| Component | Recommendation | Cost |
|---|---|---|
| Wallet | Premium hardware wallet (Coldcard, Trezor Model T) | $150-200 |
| Backup | Metal seed backup + passphrase | $50-100 |
| Passphrase | DIY generated passphrase | Free |
| Software | Sparrow Wallet connected to own node | Free |
| Node | Own Bitcoin full node | $100-300 |
| Privacy | UTXO management, coin control | Free (knowledge) |
Pros:
- ✅ Two-layer security (seed + passphrase)
- ✅ Private queries (own node)
- ✅ Full verification
- ✅ No third-party dependencies
Cons:
- ❌ More complexity to manage
- ❌ Passphrase creates second failure point
- ❌ Requires running hardware 24/7 (node)
Your action items:
- Set up hardware wallet with Hardware Wallet Setup
- Add passphrase with DIY Passphrase Guide
- Run your own node with Bitcoin Node Guide
- Learn UTXO Management
- Review Why Privacy Matters
When to upgrade: When holdings exceed $500,000 or threat model requires multisig.
→ Start here: Hardware Wallet Setup Guide, then Bitcoin Node Guide
🏰 Maximum Setup
For: Large holdings, public figures, hostile jurisdiction concerns, maximum security requirements
Components:
| Component | Recommendation | Cost |
|---|---|---|
| Wallet | Multisig (2-of-3 or 3-of-5) | $250-500 (multiple devices) |
| Devices | Hardware wallets from different manufacturers | Varies |
| Backup | Metal backups + wallet descriptor, geographically distributed | $100-200 |
| Node | Own Bitcoin full node over Tor | $100-300 |
| Signing | Air-gapped computer for sensitive operations | $50-200 |
| Privacy | CoinJoin, strict coin control | Mixing fees |
Pros:
- ✅ No single point of failure
- ✅ Survives theft, loss, or compromise of one key
- ✅ Geographic distribution
- ✅ Maximum security possible for individual
Cons:
- ❌ Significant complexity
- ❌ Coordination required for spending
- ❌ Higher transaction fees (multisig)
- ❌ Requires deep understanding
Your action items:
- Master standard setup first
- Study Multisig Concepts
- Follow Multisig Setup Guide
- Set up geographic distribution
- Consider Air-Gapped Computer for signing
- Implement CoinJoin for privacy
Alternative: Consider collaborative custody (Unchained, Casa) if you want professional support.
→ Start here: Multisig Setup Guide
Hardware Wallet Comparison
If you're choosing a hardware wallet:
| Device | Price | Best For | Key Features |
|---|---|---|---|
| Trezor Safe 3 | ~$80 | Budget + open source | Affordable, secure element, open source |
| BitBox02 | ~$150 | Simplicity | Minimalist, Swiss quality, easy backup |
| Coldcard Mk4 | ~$150 | Security maximalists | Bitcoin-only, air-gapped, advanced features |
| Trezor Model T | ~$180 | Open source advocates | Touchscreen, fully open source |
| Keystone Pro | ~$170 | Air-gap preference | QR-code based, large screen |
| Ledger Nano S+ | ~$80 | Budget option | Secure element, multi-coin |
My recommendations:
- Best for beginners: Trezor Safe 3 or BitBox02 Bitcoin-only
- Best for security: Coldcard Mk4
- Best for open source: Trezor Model T
→ Deep dive: Hardware Wallets Explained
Still Not Sure?
If you're paralyzed by choice:
- Start with the Standard Setup — Hardware wallet is the right choice for most people
- Don't overthink it — Any reputable hardware wallet is dramatically better than an exchange
- You can upgrade later — Security is iterative; start somewhere and improve
The biggest risk isn't choosing the "wrong" wallet—it's leaving your Bitcoin on an exchange while you decide.
Next Steps
Based on your chosen setup:
| Setup | First Action |
|---|---|
| Starter | Download BlueWallet and create wallet |
| Standard | Purchase hardware wallet from official source |
| Enhanced | Hardware Wallet Setup → Bitcoin Node |
| Maximum | Study Multisig Concepts before implementing |
Common Questions
"Can I use multiple setups?" Yes! Many people have a mobile wallet for small amounts and a hardware wallet for savings.
"Should I wait for a better wallet?" No. Start securing your Bitcoin now. You can always migrate later.
"Is [specific wallet] safe?" If it's on our comparison list, it's reputable. The important thing is proper setup and backup.
"What about paper wallets?" Not recommended. They were an early solution that creates more problems than it solves.