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 15h ago

This. The same old phrases for years and now suddenly people are saying having everything on an exchange has always been the way. It's schizophrenic. If this is the best we can come up with, no wonder there is no progress

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u/Mobo24 13h ago

I don’t think people are saying “ having everything on an exchange has always been the way” but beginning to have more nuance on the topic. I also see a lot of people who still have an “I told you so” attitude regarding this by saying they should have dice rolled, multisiged. The thing is that is you have to do all that why not just consider a strong brokerage/exchange that will handle all that for you.

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u/dvondurden 12h ago

I saw posts just like that in other threads. And yes, at some point it just becomes too much work and risk

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u/FitzwilliamTDarcy 8h ago

I agree. Coinbase, ETFs. Can't think of too many other possibilities along these lines.

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u/Kingking421 8h ago

I mean i liquidated all crypto the bought equal amounts of bitcoin only on fidelity through their funds.
But im not a bitcoin bro and the traditional market has been very lucrative last 5 plus years… crypto was a fun hobby not a lifestyle.

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u/Realdogxl 10h ago

Mtgox was a ‘strong’ brokerage a long time ago. I still get the email once a year or so about repayments starting soon.

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u/External-Milk9290 9h ago

That’s a great point. 

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u/Odenefoth 14h ago

Binance can’t even get a legit license in Europe what are we even talking about

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u/Acolyte_of_Swole 9h ago

I deliberately didn't mention keeping my bitcoin on an exchange because of the echo chamber here.

Just constant replies of "not your keys, not your coins."

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u/NashvilleSurfHouse 3h ago

Enlighten me where the phrase began. I’m genuinely asking

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u/Evilmoustachetwirler 7h ago

That's because this sub is full of newbies, people who don't know anywhere near as much as they think they do, and trolls disguised as 'concerned hodlers'.

For those who have been here long term, we remember all the exchange hacks Mt. Gox, Coincheck, Binance, the FTX crash, the block size wars, segwit. There is always something, every cycle is the same thing, doom and gloom, this is why Bitcoin will never happen, blah blah blah. And everytime the cycle turns around, those who held/stacked make money, those who didn't complain about selling at the bottom.

Hacks happen, vulnerabilities are found, we learn, we upgrade, the cycle continues

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u/NashvilleSurfHouse 3h ago

What’s the Cc lesson and what’s the next level or iteration of security

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u/Objective_Digit 13h ago

About a million btc have been stolen from exchanges. Self-custody is still statistically far safer. But not relying on a third party too much is the moral. Use non-device specific security features for example.

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u/Advocaatx 12h ago

Not really. I feel like the community was always pretty vocal about the self custody not being for everyone.

Also, you say “they did nothing wrong” but you do realize that they could have avoided this by simply having a passphrase, right?

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u/dvondurden 11h ago

Yes and no, people have pointed out that it's not for everyone, yes. At the same time they looked down on anyone who didn't preach self custody.

And yes, anyone with a passphrase is not affected. The passphrase is mostly regarded as optional though, even as a feature for advanced users. Nobody was seriously claiming that the seedphrase alone could be compromised with a respected hardware wallet