⚠️ Hardware wallets are not magic: a lesson from the recent Coldcard incident
Many people believe that using a hardware wallet means their funds are automatically 100% safe.
But the reality is different.
A recent security incident showed that even trusted hardware wallets can have bugs.
The problem was not that someone remotely hacked the devices. The issue was that some wallets generated weak recovery seeds because of a flaw in the randomness generation process.
Those seeds looked normal, but they contained much less randomness than they should have. This allowed attackers to calculate possible seeds, find vulnerable wallets, and move the funds.
The result?
More than 1,100 wallets were compromised and over 1,000 BTC were stolen (around $70 million at the time).
The lesson is not "don't use hardware wallets." They are still one of the best tools for protecting crypto.
The lesson is:
• Keep firmware updated
• Follow security announcements
• Never reuse a seed that may have been generated during a vulnerable period
• Consider spreading large holdings across multiple wallets
As CZ said:
"Even hardware wallets can have bugs. Even old wallets (with long history) can have bugs.
How to mitigate? Split your funds in a few wallets maybe? This has a different set of risks. Nothing is 100%.
Stay informed. Stay SAFU!"
Crypto gives us financial freedom, but that freedom comes with responsibility.
Your keys, your coins — but also your security decisions.
Stay alert.
More: https://blog.coinkite.com/entropy-technical-backgrounder/
Many people believe that using a hardware wallet means their funds are automatically 100% safe.
But the reality is different.
A recent security incident showed that even trusted hardware wallets can have bugs.
The problem was not that someone remotely hacked the devices. The issue was that some wallets generated weak recovery seeds because of a flaw in the randomness generation process.
Those seeds looked normal, but they contained much less randomness than they should have. This allowed attackers to calculate possible seeds, find vulnerable wallets, and move the funds.
The result?
More than 1,100 wallets were compromised and over 1,000 BTC were stolen (around $70 million at the time).
The lesson is not "don't use hardware wallets." They are still one of the best tools for protecting crypto.
The lesson is:
• Keep firmware updated
• Follow security announcements
• Never reuse a seed that may have been generated during a vulnerable period
• Consider spreading large holdings across multiple wallets
As CZ said:
"Even hardware wallets can have bugs. Even old wallets (with long history) can have bugs.
How to mitigate? Split your funds in a few wallets maybe? This has a different set of risks. Nothing is 100%.
Stay informed. Stay SAFU!"
Crypto gives us financial freedom, but that freedom comes with responsibility.
Your keys, your coins — but also your security decisions.
Stay alert.
More: https://blog.coinkite.com/entropy-technical-backgrounder/