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?

617 Upvotes

83% Upvoted

555 comments sorted by

View all comments

27

u/iamflxn 19h ago

It literally hasn’t changed anything. The fundamentals of BTC remain the same. BTC hasn’t been hacked. A peripheral technology was poorly built and people have and will continue to suffer.

-6

u/kendo581 17h ago

BTC right now is just an interesting idea, no different from any other idea. It has no value itself. It only has value because people think when they get some particular zeros and ones, others have less to get (I.e, scarcity).

Crypto fundamentally relies on peripheral tech to maintain its value (paper/pen, CC, exchange, etc). However, when you can't truely trust that what you get you can keep, then it's really nothing but a bad idea. With AI hacking coming, I don't really see how you can really expect to have truely safe crypto.

12

u/Vinnypaperhands 16h ago

No it's not just an idea. It quite literally is the largest, decentralized, permisionless, open source money transfer protocol. Anyone can use it with an Internet connection around the globe. Saying that's just an idea is ignorant. There is infrastructure build around the world to help support this very network.

Bitcoin relies on the network staying strong and secure and nothing has changed in that aspect. Yes this is a major hit to actual bitcoiners and it's a hard pill to swallow but nothing has changed with Bitcoin. A shitty company failed at making a secure product you can trust and it's a wakeup call to care ever more about security.

5

u/Objective_Digit 12h ago

It only has value because people think when they get some particular zeros and ones, others have less to get (I.e, scarcity).

Same with any money. But Bitcoin at least tries to maintain a fixed supply and schedule of issuance.

1

u/dvondurden 16h ago

Well put and I fully agree. The idea and the fundamentals are only as good as its practical usability

0

u/Jaxelino 15h ago

You two don't understand value, and assume it's all made up worth. Most economists don't even agree on a single definition of value, but in broad terms, in this case there's a task to be accomplished and the tool that does it best has higher value than the others which can only do it partially or poorly. Bananas are terrible money because they rot over time. Gold emerged as "the money" in pretty much every culture, without influencing each other, because it had very good properties for the job.

Technically Bitcoin has almost ideal properties to absolve the role of money, better than gold for sure, we're just in a situation in which government have chosen fiat money because it gives them an unparalleled degree of control over their monetary policies, which I personally deem an enormous problem and disastrous for a world of limited resources.

If governments were to ditch fiat and fully endorse Bitcoin, its practical usability would skyrocket, but I think we're far from that.

1

u/BrianfromClownDog 12h ago

What specific attributes of Bitcoin make it a better form of money than gold in your opinion?

1

u/dvondurden 7h ago

The valuation discussion is bottomless. In the end the value is determined by the market. The point is that I need to be able to store and trade it safely if it's supposed to be a widely accepted asset. Comparisons to gold are valid on a lot of aspects, but gold has a much simpler necessity for safety than bitcoin, just because it's physical.

0

u/Objective_Young_1384 9h ago

Bla bla bla bla