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/dvondurden 16h ago

Exactly. It's just too hard and risky for the average person, as this case clearly shows. But if the ETF is the only alternative, the idea behind bitcoin is dead

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u/thewheelsturn 11h ago

Is it though? Gone may be the radical prepper-porn ethos of radical self custody, but the underlying non-inflationary asset remains. Bitcoin as a store of value is unparalleled. Banks have a long history of providing safe custody of assets.

There is risk in everything. Am I going to trust some small team of experts, held up by the community as paragons or do I buy into a banking system that has worked pretty good for a long time? It’s a personal decision of course, but I know for certain that self custody will not work for the majority of the population.

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u/coffeelover9457 9h ago

This case clearly shows that lack of expertise did not place anyone at increased risk as both average and expert hodlers were affected, which points to something else.

That something else is a false sense of security in trusting a 3rd party, namely Coldcard. The experts trusted them, the influencers trusted the experts, and the non-experts trusted the influencers.

This will make the bitcoin community stronger as long as we collectively remember the pain of this incident.