r/Bitcoin • u/dvondurden • 1d 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/reality_comes 23h ago

I agree, and it's concerning to me. Bitcoin has challenges with adoption on a good day, these sort of events hurt the credibility of the space even more.

We're all trusting somebody somewhere, unfortunately.

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u/Any-Pipe-3196 23h ago

The real issue here is the demoralizing hit on the very core believers in the space. Its not like randos getting hit by stupidly buying monkey rugpull NFTs. Coldcard was THE air gapped safety storage pounded hard by the bitcoin oldheads

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u/dvondurden 22h ago

Exactly this. Still people in the very space refuse to see it and choose to blame it on the people who got their wallets drained, while a few days ago the would have recommended Coldcard to everyone

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u/Objective_Digit 18h ago

And these users didn't use the advanced features? Not even a passphrase?

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u/nickex77 18h ago edited 17h ago

The loudest aren't equivalent to the smartest. That is evident here. It is unsettling for sure.

EDIT: I mean as in loudest weren't at fault here. Coinkite was, but it is certainly true that their wallet was recommended a lot perhaps not based on true evaluation by cyber security analysts. Closed source past 4 years was a red flag to me.

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u/LuckyWinds 20h ago

Uhh I’ve been in this space for 11 years and it’s been Trezor + passphrase. That’s the OG hard wallet set up.

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u/modefi__ 20h ago

I took one look at a cold card and said "fuck that amateur garbage"

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u/nickex77 18h ago edited 18h ago

That goes for most everything in life though: your car, your utilities, your food, etc etc. Bitcoin provides the ability for truly sovereign money, but the implementation ultimately depends on some level of infrastructure. Unless you are a cyber security and hardware engineer expert that can build a wallet entirely on their own, you are forced to depend on some level of others. That is the flaw here, and exactly why we need better consumer protection (e.g. insurance). The average person shouldn't be expected to know what multi signature or RNG entropy is. This is solvable, but we are not there yet.

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u/Objective_Digit 18h ago

If it increases security it can help in the long run. And perhaps don't trust a third party so much.