IRS now wants to Hack Hardware Wallets

[dkbit98]

Open source hardware wallets now need to be monitored more frequently for changes in code, since they could try, and sneak something in without anyone noticing. We shouldn't be complacent, and trust something just because its open source.

It is true, open source doesn't mean something is automatically safe, and we saw many examples of malware spreading like open source fake wallet clones.

I believe there was several USA phone service providers who were sharing data with the government, and that was also exposed by Snowden.

All phone operators worldwide are closely connected with governments so you can't consider any information or your location with based station to be secret for anyone.

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[o_e_l_e_o]

A simple but slightly expensive method would be to just shred and burn the Ledger each time you've entered the passphrase.

It is unnecessary. The passphrase is only stored on the device if you choose to attach it to a secondary PIN. You can also enter a temporary passphrases which is not stored anywhere and the keys it generates are wiped whenever you unplug your device.

Should they ever get to own your piece of paper, they will find out it contains a balance of exactly zero Bitcoins inside.

I wouldn't recommend that. Not many people create and hide paper wallets with nothing on them, and that is pretty strong indication you are using an additional passphrase. It would be wise to have a small amount of bitcoin under the non-passphrased seed phrase which you can give up in such a scenario.

Let's imagine scenario of some government agency busting your home and finding hardware wallet and your paper wallet that are not connected with each other.
What do you think would be easier way for them to confiscate your coins, from paper wallet or hardware wallet??

To be completely honest with you, I think it would be easier for them to confiscate coins from a hardware wallet IF the paper wallet has a strong enough password.

In such a scenario, then they just through you in jail until you tell them what they want to know. Whether your wallet is hardware or paper is irrelevant.

I am not sure there is a limit on the number of characters a passphrase could have.

On Trezor it is 50 characters, on Ledger it is 100 characters. On Electrum, there is no upper limit I am aware of set by the wallet, so the upper limit would theoretically be the maximum input size for the HMAC-SHA512 function, which is a string with length just less than 2¹²⁸ bits.

[Lorence.xD]

This makes it now even more and more important to trust only open source wallets,,, and also as much as possible all the Ledgers and Trezors you ever bought, if you used your personal details you can be sure their databases are not only now vulnerable to hacker attacks (as we have already seen happen) but also to government requests.

What's that going to do if your government has you on their records the moment that you were born, I mean they all have us the moment that we were thrown in this world, if they suspect that you are hiding something especially with their precious taxes, you will be easily located.

[leea-1334]

,,, but also to government requests.

I wouldn't worry too much about it at this point because if you think about it, the government probably has all the information needed to control and spy on you already, even before your introduction to cryptocurrency so no point worrying, they won't probably go rogue suddenly if you are living in a first world country.

Oh I would worry,,, I know the government has a lot of information on us but I would really not like them to know exactly where I keep my Bitcoin and for how long and for how much. It should be enough for them that if I sell for my local currency, then I can pay taxes, that is fine they can track my bank account. But why should they track my wallet?

[riiiiising]

It's disgusting that the state are that desperate to know everyone's worth that they stoop down to such low levels to find it. Attempting to crack wallets without permission, is something a "normal" person would likely go to prison for.

This doesn't only just apply to closed sourced software, though. Open source hardware wallets now need to be monitored more frequently for changes in code, since they could try, and sneak something in without anyone noticing. We shouldn't be complacent, and trust something just because its open source.

the irs doesnt need private keys or the seed to achieve their main objective; all the need is a list of addy you control. at that point they have all the info they need as they can then monitor those addys.

Yeah, I don't believe that they intend to take anything, unless they can lawfully take it by coming to the conclusion that someone hasn't declared the correct amount of tax.

Cracking seed phrases? Are they insane, simple word, it's robbery.

I guess it's only robbery if they actually take anything. Their intentions might be to try, and break in, and determine whether someone has been paying the correct amount of tax or just general surveillance, because as we know from the Snowden leaks they love to monitor pretty much everything that they can, and they don't mind breaking some laws to do that.

I wouldn't worry too much about it at this point because if you think about it, the government probably has all the information needed to control and spy on you already, even before your introduction to cryptocurrency so no point worrying, they won't probably go rogue suddenly if you are living in a first world country.

Absolutely, if someone has evaded the government completely then I would be extremely impressed. Since, our world revolves around using mega companies such as Google, Facebook, and other Monopolies its just easy for them to gain access. I believe there was several USA phone service providers who were sharing data with the government, and that was also exposed by Snowden.

You will probably have a hard time finding a single company whose business is data driven in any conceivable way in the US that is not closely cooperating with the government. There is so much information out there who is cooperating with the government, I don't believe there is a single one resisting the pressure government puts onto them should they not cooperate.

You are also right with the open source software not being safe necessarily just because it is open source. Same for the TOR network where they spy a lot by setting up infected exit nodes or, put differently, their own exit nodes. You have to pay tremendous attention to effectively protect your privacy.

[o_e_l_e_o]

I wouldn't worry too much about it at this point because if you think about it, the government probably has all the information needed to control and spy on you already, even before your introduction to cryptocurrency so no point worrying, they won't probably go rogue suddenly if you are living in a first world country.

That's a big assumption to make. First world governments frequently "go rogue" and ruin the lives of any citizens they decide are causing too much of a problem. The US government is undoubtedly spying on you constantly and collecting huge amounts of data about you, unless you are taking active steps to maintain your privacy. A very basic step in that process is not letting the government know exactly how much money you own and exactly when and where you spend it.

But why should they track my wallet?

Exactly. We live in a surveillance state, but they have no right to blanket monitor everyone's financial activities. If I'm not doing anything illegal, then why am I being monitored? Whatever happened to innocent until proven guilty?

The old cliché is often mocked though basically true: there’s no reason to worry about surveillance if you have nothing to hide. That mindset creates the incentive to be as compliant and inconspicuous as possible: those who think that way decide it’s in their best interests to provide authorities with as little reason as possible to care about them. That’s accomplished by never stepping out of line. Those willing to live their lives that way will be indifferent to the loss of privacy because they feel that they lose nothing from it. Above all else, that’s what a Surveillance State does: it breeds fear of doing anything out of the ordinary by creating a class of meek citizens who know they are being constantly watched.