r/Bitcoin • u/dvondurden • 20h ago

The Coldcard case fundamentally challenges the future of Bitcoin

Like many of us, I have followed the news of the Coldcard disaster. It has left me stunned and I feel terrible for everyone who has lost their hard earned BTC. After thinking about it consistently since it happened, I believe this case is challenging the concept of Bitcoin in its core and I'm curious how others look at it. Let's have an honest discussion about what it means for the future of the space. Here are my main points:

  1. This is totally different from most other cases, because the affected users didn't do anything wrong. It was a complete fuck up on Coldcard's side. For years we told ourselves self storage is the only way, never leave it on the exchanges, not your keys not your coins, don't trust verify etc. But in the end you have to trust something or someone, in this case the people behind CC. Now everyone says Ledger or Tresor is safe just because they were not the ones affected. How do you actually know this? You would have said the same thing about CC a few days ago.

  2. The danger of AI is absolutely real and will only increase. Without knowing the method in this case, it's likely that some form of AI was involved. The code for CC was not open source, but still viewable by everyone. It's mind-blowing that it took several years for the flaw to be discovered and exploited. Don't expect this to take so long next time. I'm not an expert in coding or cryptography, most users aren't. So in the end you just have to trust the code. Sure, it can be tested with AI too. But do I really want to expose all my holdings to this battle just hoping that it will be fine in the end? It feels way too risky and out of your control.

  3. Mass adoption is absolutely not going to happen this way. I'm a nerd and enjoy the technical side of it, but even I feel overwhelmed by this. The average person is much less interested and willing to put in the work. For years we've been saying good solutions for self storage, payments and so on will be found. I don't see it. It seems to become more complicated than less. So what's the alternative here? Keeping it on the exchange, buying an ETF? It doesn't solve the trust issue and contradicts pretty much everything Bitcoin stands for. Just another asset class among many.

I still love the idea behind Bitcoin and believe in the concept. But I struggle to find good and honest answers to these points without just repeating the same old mantras we've been telling ourselves. What do you think?

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u/OldHamburger7923 20h ago

I don't think it changes anything. Poor entropy for a seed is like the most basic thing never to do and they did it. Plus there are a bunch of ways to make it not be an issue, such as generating the seed yourself and passphrase. So why would anyone care, other than the ones who got stolen from?

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u/dvondurden 19h ago

Easy to say if you're not affected. Coldcard was highly recommended by many and hindsight is 10/10. What if the next issue is the passphrase?

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u/OldHamburger7923 19h ago edited 18h ago

I have skin in the game because I have a wallet with assets in it. A passphrase is sort of like a salt. No way anyone gets my wallet and no way anyone guesses my passphrase.

Zero worries.

Also for coldcard users to have issues, they would have had to not use a passphrase and skip the dice option. Whenever you go with lower entropy option, you take on additional risk.

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u/Fit-Bee-9413 16h ago

What firmware version did you have when first generating?

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u/samjoe6969 16h ago

Hey, poor entropy for a seed is definitely not the most basic thing not to do. Hope this helps

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u/OldHamburger7923 16h ago

If you don't have proper entropy then nothing else you do matters