What the Coldcard Incident Actually Broke, and What It Left Standing

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Summary

On the evening of 29 July, one holder watched 18.25245043 BTC leave every wallet he owned in seven minutes. “Perhaps the hardest part about this is that I did everything right,” he wrote afterwards.

Sara K. takes that at face value and works out where the failure actually happened.

“Randomness is the least glamorous line in any crypto product, and it is the only one that cannot be fixed later.”

Key Takeaways

  • A 2021 Coldcard firmware flaw left the seed generator producing a small, reconstructable set of keys.
  • One holder lost 18.25 BTC in seven minutes despite following every recommended practice.
  • Bitcoin's cryptography was untouched and air-gapping held; the failure was upstream of both.
  • Owners who added their own dice rolls at setup were unaffected.
  • The same class of failure has appeared at least five times, starting with Android's RNG in 2013.
  • Stefan Lauer of SimpleSwap: randomness is the one part of a crypto product that cannot be fixed later.

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