Points of Focus

• ZachXBT argued hardware wallets have become unreliable due to software changes, recommending a dedicated iPhone for crypto storage instead.
• Tornado Cash developer Roman Storm rejected the idea, saying iPhones lack key security features such as BIP-39 passphrase support.
• The debate shifted toward multisignature setups, with several security experts favoring distributed custody over relying on a single device.

A debate over crypto self custody erupted after onchain investigator ZachXBT argued that hardware wallets have become more trouble than they are worth, recommending that users instead dedicate a separate iPhone exclusively to managing their crypto holdings.

Writing on his Telegram channel, ZachXBT singled out Ledger, criticizing frequent software updates and describing the user experience as increasingly disruptive. 

His recommendation was straightforward: buy a clean iPhone, keep it offline except when signing transactions, and use it solely as a crypto wallet. 

ZachXBT on TG just said all hardware wallets are garbage and using a separate iPhone is safer..

i agree with the main lesson.. but a separate iPhone alone still leaves you with one device and one seed as the single point of failure.

for serious funds, this is the exact setup i… pic.twitter.com/Yiq554UUa9

— Axel Bitblaze 🪓 (@Axel_bitblaze69) July 15, 2026

The comments quickly divided the crypto community, with some users agreeing that hardware wallet usability has deteriorated while others warned that replacing purpose built security devices with smartphones introduces different risks.

Roman Storm challenges the iPhone approach

Among the strongest critics was Tornado Cash developer Roman Storm, who argued that smartphones lack several security capabilities available on dedicated hardware wallets.

Storm specifically pointed to the absence of native support for BIP-39 passphrases, a widely used feature that allows users to create an additional layer of protection on top of their seed phrase. Without that functionality, he argued, relying solely on a smartphone could reduce security for users holding significant amounts of cryptocurrency.

Today I read this from @zachxbt: (from https://t.co/LV6fBuju9f)

"All hardware wallets are complete garbage and I do not advise using them for important tasks like signing transactions or storing funds. Much better to have a separate iPhone with its only purpose being to use as…

— Roman Storm 🇺🇸 🌪️ (@rstormsf) July 16, 2026

“So – mobile wallet providers: please implement BIP39 passphrase support, so people can easily turn our old iPhones and Androids into real crypto wallets. Add air-gapped signing while you’re at it, so we never have to connect them to a network at all,” he wrote on X.

The conversation shifts to multisig security

Rather than choosing between hardware wallets and smartphones, many participants argued that the real solution is eliminating single points of failure altogether.

Trezor CCO Danny Sanders argued that while ZachXBT’s iPhone idea is an interesting upgrade over a typical hot wallet, it cannot replace a dedicated hardware wallet. He said iPhones remain general-purpose devices with broader attack surfaces, lack an independent screen to verify transactions, can expose recovery phrases through backups or clipboard leaks, rely on Apple’s closed ecosystem, and face long-term battery and activation issues. 

Love ZachXBT's detective work, but of course I kindly disagree here 🙃.

A dedicated iPhone is an interesting hot wallet upgrade, but it's still a general-purpose device. And assuming everyone can execute this setup really well is a big generalisation.

Why an iPhone can't… https://t.co/Qtp1y15krY

— Danny @Trezor (@Dantoshi) July 16, 2026

Sanders also stressed that not all hardware wallet makers should be judged by Ledger’s design decisions and maintained that purpose-built hardware wallets remain the safest option for protecting private keys.

Multisignature custody, such as a 2-of-3 Gnosis Safe setup, distributes approvals across multiple independent devices, meaning compromising a single phone or hardware wallet is not enough to move funds.

The discussion reflects a broader shift in crypto security. As institutional and individual holdings continue to grow, many large holders are moving beyond reliance on one device and adopting layered custody strategies combining hardware wallets, mobile devices and multisignature authorization.

For retail users, however, the debate underscores that no storage method is universally secure. Hardware wallets remain the industry standard for offline key management, while smartphones offer convenience but introduce different tradeoffs. 

Ultimately, security depends less on the device itself than on how private keys, seed phrases and transaction approvals are managed.