It is your responsibility to adopt good practice to protect your Bitcoin.

[Mrbluntzy]

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‎
‎The recent Coldcard wallet vulnerability that lead to the loss of a massive amount of Bitcoin into the hands of hackers has left me thinking since that incident happened with and I have been asking myself this question below,
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‎Is there any kind of wallet vulnerability that can allow hackers drain a wallet that has a 2 of 3 or  3 of 5 keys multi signature set up even though the hackers can't compromise the 2 and 3 keys but only able to compromise 1 key or 1 signing devices?  
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‎I did some research on my own to try answering the question myself and the things I learned are:
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‎1. If a wallet has a multi signature set up, the rules of spending the Bitcoin in that wallet is ensured by Bitcoin script itself, not just the hardware wallet. That means that, if for example you have set up a 2 of 3 multi signature on your wallet, even if any vulnerability allow the hacker gain access to 1 key, they can't steal your coins unless they are able to compromise both keys.  
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‎2.  Multi signature means that before the Bitcoin in your wallet can be spent, you have to request for consent and approval from all the devices holding the rest of the signature keys, it's not advisable to hold all keys in one device.
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‎3.  Firmware/software vulnerability can not drain a wallet with multisig except all the keys get compromised at once. If it's a 5 of  7 multisig, gaining access of 2 keys doesn't still means that the Bitcoin can be stolen, the hacker still needs to get the 3 remaining keys before stealing the Bitcoin.  
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‎4.  A 2 of 3 or 3 of 5 multisig is good for individual holder and keys should be kept independently on different device because if due to a firmware vulnerability or a different kind of exoploit lead to compromising 1 signature device, it doesn't mean that the whole quorum will be affected.
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‎If you are holding a large amount of Bitcoin or even if you are holding a small amount that you can not afford losing, adopt using multi signature configuration and also have designated signing device that is only to be used for signing, don't use a device that you are using to carry out different online activities or installation of unknown applications.
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‎Keeping your Bitcoin in a hardware wallet without adding multisig is not just enough for security of your Bitcoin.
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‎Correct me if there's any error in my findings, this is a research to educate myself and also post it here for others to benefit.
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‎Reference.
‎https://bitcoin.org/en/secure-your-wallet?utm_source=chatgpt.com

[notocactus]

‎The recent Coldcard wallet vulnerability that lead to the loss of a massive amount of Bitcoin into the hands of hackers has left me thinking since that incident happened with and I have been asking myself this question below,
‎
‎Reference.
‎https://coldcard.com/learn/hardware-wallets/2-of-3-multisig?utm_source=chatgpt.com

There are threads talked about it, discussed, guided about it after Coldcard security accident and I would not like to go to details of your post.

Only want thing I would like to say:

• If it's a terrible security from Coldcard, let's avoid using any resource from them for your security advice. Let's be clear, I am not here to destroy the reputation of Coldcard company but with their security incapable and ignorance against community report on their entropy issues, I see they are very careless and I no longer trust their educational resources.

[Charles-Tim]

I prefer cold singlesig wallets that is extended with passphrase than multisig wallets, but a multisig that as some cold private keys is safer and more secure.

Bybit that was hacked with over 1.2 billion stolen, it was a multisig wallet.

People just need to be very careful.

Online multisig wallet is also secure than online singlesig wallets.

[EL MOHA]

‎Correct me if there's any error in my findings, this is a research to educate myself and also post it here for others to benefit. ‎

I think the two previous post before mine as actually explained that there is possibility of multi sig wallet getting compromised. Yes you are right before you get the multi sig wallet compromised you must have to get access to the minimum required number of co-signers to able to spend from it.

There is possibility of the multi sig getting that which through sending phishing links to the co-signers like the one pulled off during the bybit exchange hack.

Another possibility which most people who talked about multi sig do not emphasize on is the point of failure, if a multi sig wallet has all its seed phrases or private keys generated from one device or wallet then they have a single point of loss. If that device gets compromised or infected with malware it affects the whole seed phrases generated from it and also same with one wallet.

Imagine if your multi sig wallet seed phrases were generated using coldcard then by now they will also be be vulnerable. So for me as an individual except you have all the devices for each co-signer or each wallet for it then you go for a multi sig wallet but otherwise a single sig wallet with a very strong pass phrase is the best option for me

[Mrbluntzy]

Only want thing I would like to say:

• If it's a terrible security from Coldcard, let's avoid using any resource from them for your security advice. Let's be clear, I am not here to destroy the reputation of Coldcard company but with their security incapable and ignorance against community report on their entropy issues, I see they are very careless and I no longer trust their educational resources.

In that case, I will remove the source link of them that I added in the post, for security reasons.

Bybit that was hacked with over 1.2 billion stolen, it was a multisig wallet.

You are right, but it was an Ethereum cold wallet that got hacked, not Bitcoin cold wallet and according to what I read that the singers approved the transaction not knowing it was malicious.

Like you said already, we just have to be very carful and double down on security. I am not supporting the carelessness of Coldcard in terms of their security, but I just have this mindset that had it been some of those victims that lost their Bitcoin had set up a multisig, it might have protected them, the loss won't have been that much.

[Sammye3]

You have made good points and have passed a vital information about bitcoin security that some people would like to adopt. There is no doubt that you have an understanding of how multisig wallet operates and that's a good thing but one disadvantage is its complexity and understanding how to recover the wallet.

There is so much wallet procedures and agreement with a multisig wallet before a withdrawal is placed so it should be reasonable that it is used for long term investment rather than trading or short term investments. Single-sig can be used mostly for securing relatively low amount of bitcoin while multisig can be used for large bitcoin security.

[X-ray]

‎4.  A 2 of 3 or 3 of 5 multisig is good for individual holder and keys should be kept independently on different device because if due to a firmware vulnerability or a different kind of exoploit lead to compromising 1 signature device, it doesn't mean that the whole quorum will be affected.

Different device or even newer hardware revision combination is not enough in my opinion, you need different vendors because you don't wanna trust a vendor for all of your multisig device because that'd be another single point of failure.

If you were setting up multisig with Coldcard Mk2 and mk3, hacker could easily breach your multisig because they can easily get access to all the addresses.

Using multisig setup from top 3 vendors for your 2-3 setup already reduce the chance of your Bitcoin getting compromised drastically.

Bybit that was hacked with over 1.2 billion stolen, it was a multisig wallet.

I remember that incident, the problem wasn't on the multisig but on safe developers side getting compromised but the attack was because social engineering but it also shows us that a social engineering could even breach 3 of 6 multisig even though I doubt a hacker will carry out a months long preparation attack to an individual.

[Stepstowealth]

we just have to be very carful and double down on security. I am not supporting the carelessness of Coldcard in terms of their security, but I just have this mindset that had it been some of those victims that lost their Bitcoin had set up a multisig, it might have protected them, the loss won't have been that much.

What I just see is the necessity of information because the information that most persons would have had is that having a hardware wallet simply secures your Bitcoin investment But that knowledge was only true for a while because have these persons been keen on updating the information they had on Bitcoin, It is possible that they would have known how a mutisig makes their investment safer and less vulnerable, and put in place this security measures to ensure that their wallets is extra secure to prevent situations that make them victims. This is another situation where investors will learn from that keeping up to date with information and trying to put in place every possible measure to ensure that your investment is secure is not you being paranoid.

[SteveKale]

From the perspective of a smart contract auditor, the Coldcard wallet team's conceptual approach to implementing multisig is sound.

However, the issue lies in the implementation logic—specifically, how the contract itself was coded.

A single error in a variable or a function within that logic can jeopardize the entire project

[Somegory]

And they say that worry is a bad thing, that "been security concern" is the best advice in that write up, because if some ColdCard wallet useless were concerned about their Bitcoin even more and they considered adding Passphrase it will be near impossible for any hackers to steal their money.

It would have bought them enough time to move their funds when that new broke out, and that's even if they are scared of the breach, you can never be safe enough, always be concerned, and that advice is the one I will take.

The entropy was weak out of the box, I accept that, but with a touch of Passphrase it would have bought them time to exit, anyone with me on this one?

[348Judah]

Every Bitcoin user is expected to maintain high security measures over their Bitcoin assets, as long as their coins are stored in a non-custodial wallet, which puts them in control. We have the full potential of this, we should turn not fail our own selves by creating a vulnerability, and this is why learning to know more about privacy is also important so as not to expose ourselves or any private information regarding our wallet, and this is why we are not getting comfortable any longer with the traditional centralized financial system and decided to go for Bitcoin in cryptocurrency for this reason.

[Danish Ali]

Is there any kind of wallet vulnerability that can allow hackers drain a wallet that has a 2 of 3 or 3 of 5 keys multi signature set up even though the hackers can't compromise the 2 and 3 keys but only able to compromise 1 key or 1 signing devices?

Short answer, no. The code for multisig rule enforcement is apart from any particular device on the Bitcoin network, even if one key is broken, all the other keys will not be of any help.

Firmware/software vulnerability can not drain a wallet with multisig except all the keys get compromised at once.

Basically a correct statement except for one attack path, bad signing device could show a different address to sign than the address you planned to sign for, double check all receiving addresses separately on every signing device before signing.

it's not advisable to hold all keys in one device.

Preferably, a different maker as well, Coldcard has made it clear that this is something that can happen to all devices sold by the same company at the same time because of a single software bug, different makers result in different code bases and so different attack areas.

Keeping your Bitcoin in a hardware wallet without adding multisig is not just enough for security of your Bitcoin.

This incident made that argument for you better than any tutorial could.

[Futurexxx]

When I first saw the title of this thread, I initially thought that the practice of protecting our Bitcoin holdings was about putting down emergency funds in place so that you wouldn't have to be forced to sell your bitcoin when emergency struck, but it was when I read through, I get to understand that it's safety and security op is talking of.

If we are talking about multi signature wallet, I think that it also have it disadvantages because a carelessness from a single signatory will put the entire holdings at serious risk, so I would rather choose a single signatory where my destiny will be in my hand, so that if for any reason the security is breached, I will know that my carelessness was the cause of it being breach, because I hate to get worried over the actions of other signatory members.

[macson]

Self-custody does indeed come with responsibility. If someone chooses self-custody, they must pay close attention to the security of their wallet and follow various security recommendations to keep their assets safe.

Although various hardware wallet providers claim that their devices are secure, we cannot ignore the fact that they still have potential security vulnerabilities that could jeopardize the safety of our assets.

Setting a passphrase for your wallet and using multi-sig to make it more secure is highly recommended. At the very least, if a security vulnerability exists, it will be more difficult for an attacker to gain access to your assets.

[Dunamisx]

If you don't control and protect your Bitcoin, who will?

That you are into cryptocurrency today shows that you will value your privacy and also want to maximize your opportunity with your financial stand to be more independent, so that you could be in charge of your asset without waiting for any regulatory body to control or determine how things are done on that same asset you have with them, if you are bitcoin investor and still fall under the use of a custodial wallet, know that you are at risk.

[Agbe]

Only want thing I would like to say:

• If it's a terrible security from Coldcard, let's avoid using any resource from them for your security advice. Let's be clear, I am not here to destroy the reputation of Coldcard company but with their security incapable and ignorance against community report on their entropy issues, I see they are very careless and I no longer trust their educational resources.

You are not out ot point. You are inline with the bitcoin security principle. When I heard that people lost 2 BTC plus from the ColdCard hardware wallet, I was like how? That means the security was porous for hacking and those who lost coins were doubting the existence of bitcoin. Because of what has happened, people are afraid of keeping bitcoin in hardware wallets. And for them to regain their trust again, it will not be easy. Bitcoin Core and Electrum wallets will be flooded with investors.

[Ruttoshi]

I know that it has been said times without number here in the forum that self custody comes with a responsibility because it's in your own hands to secure your wallet from hackers. Since, we can try to do our best from our own end to make sure that our wallet are safe, you shouldn't neglect the fact that your wallet code can be compromised based on laxity from the devs.

This is why adding a strong passphrase that will be hard for anyone to guess is very important if you are your own bank or use a 2-3 multisig wallet to make it difficult for hackers to compromise your wallet.

[PostQuantumBTC]

Bitcoin Core and Electrum wallets will be flooded with investors.

You need huge amount of data which is getting close to 1 terabyte to download the whole bitcoin blockchain before you can use Bitcoin Core.

Electrum can be used offline but those with huge amount of bitcoin will not have safest wallet if they use it online.

That makes you not really correct.

Best to use a reputable hardware wallet or use Electrum on an air gapped device.

[Findingnemo]

"Not your keys, not your cryptos", in the same way," Your crypto, your responsibility" - we should spread this term as much as we can to educate the significance of having good wallet security overall.

And to answer most of OP's points, yes, a multi-sig wallet is a good one that avoids a single point of failure, but it is not the ultimate way to save your crypto in a way that is 100% unbreachable.

[RockBell]

Every Bitcoin user is expected to maintain high security measures over their Bitcoin assets, as long as their coins are stored in a non-custodial wallet, which puts them in control. We have the full potential of this, we should turn not fail our own selves by creating a vulnerability, and this is why learning to know more about privacy is also important so as not to expose ourselves or any private information regarding our wallet, and this is why we are not getting comfortable any longer with the traditional centralized financial system and decided to go for Bitcoin in cryptocurrency for this reason.

When it comes to holding bitcoin, the most important thing to do is to secure your wallet. The first step is to avoid keeping your coins in an exchange. This way, you will know that your coins are your keys, and having complete custody of your bitcoin is what people will refer to as wise because they already know how valuable it is, so you will want to protect your asset by all means. practice of how to protect your coin matters a lot.

People don't even realize how valuable what they are holding is, which is why they don't take many things seriously. They should understand that anything valuable will attract theirs, which is one of the reasons we need to be extremely cautious because holding something will undoubtedly make you a victim. As a result, you must be ready for any scenario that may arise. from the day of buying you need to prepare for things like this.