RabbitVectorStory
Alleged Coldcard hardware wallet flaw spooks bitcoin holders
Leans negative
Security scare undermines trust in 'safe' cold storage devices
What happened
Coldcard is a physical device people use to store bitcoin offline, away from the internet, which is normally considered very safe. Reports of an $89 million exploit (a security flaw hackers took advantage of) have made some owners nervous, so they're moving their bitcoin off these devices and onto exchanges instead.
Why it matters
If you use a hardware wallet like this, it's worth knowing what actually happened before reacting, since moving funds to an exchange trades one risk (device flaw) for another (exchange custody, which is what caused the FTX disaster).
Should I do anything?
Don't rush to move funds based on headlines alone. Check Coldcard's official statements and your device's firmware version first, and remember moving to an exchange isn't automatically safer.
Terms used
- Coldcard
- A physical device (hardware wallet) used to store bitcoin offline for security
- exploit
- A flaw or bug that hackers use to break into a system
- cold storage
- Keeping crypto offline, away from internet-connected devices, to reduce hacking risk
- exchange
- An online platform where you buy, sell, or store crypto, which holds your funds for you