Large-scale Coldcard compromise (1485.77 BTC stolen so far)

[flatt]

some people have a non passphrase wallet as a decoy with passphrases behind it.

I wonder how many people realize that in this case, a "decoy" wallet have increased the risk, as it tells the attacker they found a used seed phrase. That gives them the possibility to start brute-forcing the passphrase. If you would have used the weak seed phrase only in combination with a passphrase, it would have been many orders of magnitude more difficult to find.

You missed 2 real things: the perspective of hacker & the function of decoy.

it's called decoy for a reason. once the owner see their decoy is gone , the owner can immediately move the funds. it does not increased the risk at all, it literally does increased the security for the funds. and in this case (the worst case ever displayed on this day UNTIL probably 100 next years), the hacker knows well brute-forcing into passphrase is such a waste of time because the owner could be already moved the real funds within no-time.

FYI, brute-forcing passphrase for a single wallet most likely TOOK MORE TIME than brute-forcing the whole ColdCard default seed.

[kTimesG]

You are saying also that no entropy was added by any dice rolls, so I would need to be explained the mechanics of how that would be based on if you are saying that there might have been an override of the Cold Card software that pushed it back to the 40 bits of entropy?

It's not 40 bits of entropy, more like 23 (or even less, CC would know better of their die cutting parameters). Watching the official YouTube easy guide "5 minutes setup" of a fresh CC adds some 6 additional bits. Each dice adds around 2 bits on top of this. So that's only around 2 to 3 billion guesses for all seeds out of all entropies + one dice rolls. A laptop can break that in an hour.

[bitmover]

I'm afraid this incident does reveal why most people won't properly custody their bitcoin, ever.

If it is required from people to roll dice, use a passphrase apart from a seed phrase, or engage in multi-vendor multi-sig setups for "extra security", I'm afraid most people who "believe" in Bitcoin's value proposition will just stick with an ETF from now on.

And to be frank with all of you, I'm starting to think this is very justifiable to a point.

Owning a Bitcoin ETF is not the same as owning Bitcoin!

What really needs to be done is for people to read or reread the Bitcoin white paper again, to understand or remember what Bitcoin is.

I think both points are valid.

But it is much better to own a bitcoin ETF than to own a hacked wallet.

Maybe it will make sense for some people to have both.

I am also affraid that when you own a bitcoin ETF you do not own a permitionless money, but you can at least have some protection against inflation.

[joker_josue]

Someone on Twitter [1] did their own investigation and is claiming a possible inside job.

It's a thread of many tweets, the link is here

I had heard him talk about this investigation, but I hadn't found it yet.
Thank you for sharing.

Things are going to get very ugly for the Coldcard team. It remains to be seen when the first lawsuits will start to come.