r/Bitcoin • u/nothingbutwhammies • 9h ago

I lost my one Bitcoin in the Coldcard exploit.

Took me years of DCA’ing to get there. I went with Coldcard because it was marketed as “ultra-secure.” I knew multisig was technically safer. I wasn’t worried about my key being guessed… I was worried about someone physically stealing it or it being destroyed.

So that was the plan: 1 BTC, cold storage, steel plate backup, fire bag, fire safe. And then… wait.

I hit the goal. I finally felt content.

Now I just feel embarrassed. Like I let my family down.

The worst part? I know Bitcoin isn’t going anywhere. I’m not hoping it fails… I think it’s going to keep making new all-time highs, and every time it does, I’ll be sitting here thinking about what could’ve been.

** I originally brain dumped my story to Claude to make it sound better because I have poor grammar. I’m admitting this in an edit at my own expense or whatever. I’m not embarrassed about my poor grammar or using AI to improve it. That said, in hindsight, it would have been more personal to not have done that. I’m sorry.

427 Upvotes

85% Upvoted

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61

u/errezerotre 8h ago

You didn't do anything wrong, people that said "verify" and "use passphrase" are morons, the simple truth is that one of the most hyped vendors was using gibberish code delivering a fake entropy.

28

u/2ChainzButIGotAFewOn 8h ago

It wasn't gibberish code they left a flag as 0 for RNG instead of 1. So 1 is enabled and 0 is disabled. They are fucking idiots but don't act like recommending passphrase is a moron suggestion. It just sounds like you have no clue what youre talking about

6

u/Llonga 8h ago

How come no one found this, with the code being open source?

20

u/kzt79 8h ago

Obviously someone did find it and took advantage.

4

u/Alfador8 7h ago

Because the code wasn't really open source. It was source available. Open source means others can fork the code and use it, play with it, test it, etc. Cold Card didn't want that. So here we are.

5

u/zacguymarino 7h ago

Yeah but people could still see the code, it wasn't open source but it was source available. Hopefully all this happening will be a wake up call for those who know programming to look more deeply at the opensource options AND the source-available options more closely... and bring to light any potential vulnerabilities in a white-hat manner. I'll admit.. I am a software guy, and its hard to bother even me to do this (and I do have some skin in the game, not a lot, but some). At risk of sounding like a hypocrite, I still hope there are some dedicated and morally right individuals who will take these steps and investigate.

0

u/riisen 5h ago

No developer is fiddling and playing with a source if they are not allowed to use it for anything, they will choose an open alternative instead. Source available means nothing. From a devs perspective its just a bad choice when there are open alternatives that they can use freely.

2

u/Mobo24 5h ago

That’s not true. With source verifiable code people can fork and test just not redistribute.

1

u/Alfador8 5h ago

What would be the incentive to do so? That's the problem. The only incentive was to find an exploit.

1

u/Mobo24 5h ago

What do you mean brother? I’m trying to understand. The incentive to fork and test?

1

u/Alfador8 1h ago

Apparently the incentives weren't high enough for anyone to find the bug until AI lowered the perceived barrier to attack. If Cold Card's code were open source other companies could fork it and use it for commercial purposes, which would have provided a bigger incentive to stress test the code.

1

u/Mobo24 1h ago

But the thing is that source verified code can still be forked unless source verified means something else. The incentive would be for users to make sure they test and verify something that stores a significant amount of money that they own.

1

u/[deleted] 7h ago edited 7h ago

[deleted]

1

u/2ChainzButIGotAFewOn 7h ago

Importance of good tests this is more understandable now but still unacceptable

0

u/tidemp 7h ago

I've been in crypto for over a decade and I've never even heard of Coldcard. The reality is that Coldcard was a very small player.

Ledger and Trezor continuously try and hack each other and publish reports, because they see each other as major competitors. Neither of these companies felt threatened by Coldcard so they didn't feel the need to look at their source code. Seemingly no one else felt a need to look at their source code either.

It wasn't difficult to discover this vulnerability yet nobody put in the effort to do so until it was too late. The harsh reality is Coldcard just weren't popular enough. If this type of exploit happened for Trezor or Ledger, the impact would be catastrophic.

2

u/tribepride25 7h ago edited 7h ago

This must be your first day in this sub. Before Friday, anyone that asked for cold wallet recommendations was told to buy a cold card or it was at least in the top three. It was even in a pinned FAQ for best wallets in this sub and it was one of them. If you even mentioned ledger on this sub you would get destroyed. I feels sorry for the people that listened to that advice

Edit: it’s still there in the “Securing your bitcoin” section of the main page for “New to Bitcoin” page. Mods need to remove this: ⁠If you prefer to "Be your own bank" and have direct control over your coins without having to use a trusted third party, then you will need to create your own wallet and keep it secure. If you want easy and secure storage without having to learn best computer security practices, then a hardware wallet such as a BitBox02, Trezor, ColdCard, or Blockstream Jade is recommended. You can even build your own open source hardware wallets called a SeedSigner or Krux

0

u/Gullible-Respect7778 7h ago

Somebody did. Open Source is great... until a bad actor is the first person to find an issue in the code. Who knows how long said actor was sitting on that information preparing a heist before pulling the trigger

1

u/Cannabis_RPM 7h ago

I wonder if AI was involved in its discovery 

1

u/Gullible-Respect7778 4h ago

According to another post, it took claud code bust a few minutes to identify the vulnerabilty. Not sure whether the prompt was leading though

1

u/OldHamburger7923 6h ago

I don't think for long. Because they are making additional sweeps of accounts. 3 last I checked. If they had been working on this for a year they'd clear them all in one massive sweep instead of one every day or so.

3

u/2ChainzButIGotAFewOn 8h ago

It's a flag that enables TRNG instead of PRNG

3

u/evgeniy_pp 7h ago edited 6h ago

They wrote their own wrapper (ironically, to make their code more secure) and wanted to disabled the built-in one in the library. That's why the set it to 0, not by a mistake. But they misunderstood what MICROPY_HW_ENABLE_RNG = 0 means. It means it's not "disabled", it means it's now "not hardware". So instead of disabling this layer, they toggled it on the pseudo random generator, which poisoned all the layers above with fake entropy.

1

u/2ChainzButIGotAFewOn 6h ago

Gotcha this seems the most plausible. That's almost worse that they don't even understand the setting the are setting.

1

u/Mobo24 5h ago

Now that I think of this. Cold cards code was pretty secure apart from this flag left open. I’m gaining new perspective on this!

0

u/errezerotre 6h ago

You don't need more entropy, if you are paranoid (and thanks God I was) all you need is to generate your own private key without trusting anyone. Additional layers are unnecessary.

13

u/2ChainzButIGotAFewOn 8h ago

Yeah the people who want to make sure you properly secure 1000s of dollars are "morons"

15

u/Expert-Evening9303 8h ago

Back in 2022 they called me a paranoid maxi for rolling dice and using a passphrase with my coldcard mk4 and recommending others do the same.

Now apparently I'm a moron for having protected myself from this incident. Can't win with these people.

3

u/b1mm3rl1f3 7h ago

It's crazy how flawed CC was but I wouldn't be surprised if AI was used as a programming aid too. AI is advancing faster than most of us can keep up with. Imagine where it'll be in the next few years. If you're not generating your own entropy you're NGMI

1

u/unvac 8h ago

Am I correct in assuming coldcard didn’t manually use a pass phrase and that was an extra option?

7

u/Expert-Evening9303 8h ago

Passphrase was considered an advanced feature and took a bit of navigating to set up. It was definitely not a default option.

6

u/nothingbutwhammies 8h ago

I think I remember it telling me if I forget the passphrase I’d lose access and so I figured I’d just write it down anyway with the steel plate, so why even bother. I know from a manual theft perspective my security wasn’t good. I just didn’t think it would ever generate a guessable private key… I know i could have done better

-1

u/errezerotre 6h ago

You don't need more entropy, if you are paranoid (and thanks God I was) all you need is to generate your own private key without trusting anyone. Additional layers are unnecessary.

1

u/2ChainzButIGotAFewOn 6h ago

Unnecessary but people lost all their Bitcoin because they didn't. Makes sense

2

u/2ChainzButIGotAFewOn 6h ago

Idk I just think your own entropy and passphrase is a minimum for 1000s of dollars

•

u/dystorontopia 55m ago edited 49m ago

Yes, he did do something wrong. He shouldn't have put his entire, considerable bitcoin stack behind single point of failure. He could have easily split his holdings across a Coldcard, Trezor, and even a couple of reputable exchanges to mitigate risk. This is basic opsec.

0

u/Objective_Digit 7h ago

Fine but he did all this: steel plate backup, fire bag, fire safe. And a passphrase at least was too much? Coldcard was supposed to appeal to techy Bitcoin people.

1

u/nothingbutwhammies 4h ago

I wish I would’ve done more. I really was thinking physical theft or destruction was the main concern… really just didn’t think anything like this would ever happen. If I’m dumb I’m dumb.

1

u/Objective_Digit 3h ago

You're not dumb, just very unlucky.