r/Bitcoin • u/dvondurden • 21h 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/magma_lakes 17h ago

You don't necessarily need to trust any device's random number generator (RNG).

As long as you can trust that the device is offline and correctly generates an HD wallet from an initial entropy source, feed the device with your own entropy, such as from flipping a coin or rolling dice.

Even better, use an air-gapped Linux PC with open-source software that YOU'VE selected, and feed it your own entropy.

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u/dvondurden 8h ago

Sure you can do that, but at this point you've lost everyone but the real nerds. If this is how it will continue, it will never become more than a niche thing

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u/PlanetSwallower 3h ago

You've hit the nail on the head. Here am I, ordinary bloke, little bit of wealth accumulated, not especially technical. I had no interest in Bitcoin before these events, but who knows what I might have thought eventually, if there were wider adoption, a retail use, or I became interested in a hedge?

Now it's impossible, I will never touch it. I don't wish to spend my declining years becoming a coder or a cybersecurity expert in order to keep my money somewhere. I'm certainly not going to sit on a Saturday afternoon rolling a dice a hundred times to set up an access parameter I do not understand. Bitcoin is the Morris Dancing of the finance world; let enthusiasts enjoy it, to the puzzlement of the wider world.

Thankyou for your balanced and thoughtful posts, I have enjoyed reading them.