Can see why hardware wallets seemed a good idea at the time but history has shown this is a terrible way to self custody. Compromised devices aside, the KYC data leaks have put people in danger too.
Hardware wallets are not a solution to self-custody.
If one would make a list of things that can go wrong, starting from the supply chain that delivers parts to the manufacturer, malicious employees at the manufacturer, mistakes the manufacturer can make, attacks on the delivery chain from the manufacturer to the user, to mistakes the user can make creating, using and storing their keys - the list would contain hundreds of points.
If there was one, someone would write down the steps necessary and put them on the internet. But I have never seen a description of how to self-custody Bitcoin in a safe way.
> Hardware wallets are not a solution to self-custody.
Nothing in this world tends to be "the solution", everything has tradeoffs.
Say you want to do self-custody, what is then the best option? "Don't do self-custody" obviously isn't the solution, as the core use case here is self-custody, so what in your opinion is a better way, than hardware wallets?
If there is nothing better today than hardware wallets, then for now, they are "one of the better solutions" for how to do self-custody, even with the current tradeoffs. But again, I'm eager to hear what the alternatives are.
From a bird's-eye perspective, 3 things are needed: Create a key, derive an address from the key, store the key.
Creating a key safely is possible with dice. You would probably create a seed phrase instead of a key directly, but for this discussion it is the same.
Deriving an address from the key is hard and I have not yet seen a good protocol on how to do it. I have read through a bunch of descriptions of how people do it and they are all weak and brittle. The most popular seems to be "I order a hardware wallet and follow the instructions that come with it". But even people who put a lot of thought into it come up with weak and brittle approaches.
I would think there is a way to do it safely. But I have never seen a description of one yet. It might involve multiple computers, multiple software implementations and a hell of a lot of work to create a multisig that is not prone to a single attack vector.
Storing the key is probably the hardest. The most popular way seems to be to store it in a drawer or a safe. So now those coins are just as safe as a piece of gold would be. Or they use a multisig and store the keys in multiple locations. Quite painful. As you have the ongoing problem of keeping those locations accessible and safe at the same time.
Very often this is not the case. Debit / credit cards payments are quite reversible, but once a person send $100,000 or even $10,000 to a scammer it can be quite hard to recover.
Caused by an account take over? This is letter of the law stuff and something bank (and other financial firms) employees receive specific training on. The customers loss is capped and their bank is on the hook.
For inter-bank transactions involving a scam that causes the customer to “voluntarily” send money it depends on the rail. But US ACH rules cover reversals due to fraud and have pretty substantial rules about it.
I'm guessing the best way to go about self custody these days is to have a multi sig wallet, based on multiple hardware wallets from different vendors.
My gut reaction is that a hardware implant would be too costly so there's no way they'd actually do that but I guess when you can steal $92M, anything is possible. They could even fab an esoteric chip and still make a profit.
And yet on this exact website people critical of the industry were ridiculed with the exact same rhetoric adopted by the AI industry. It was touted by so many as inevitable, and how we will all be left behind if we don’t join the cult
Can see why hardware wallets seemed a good idea at the time but history has shown this is a terrible way to self custody. Compromised devices aside, the KYC data leaks have put people in danger too.
Hardware wallets are not a solution to self-custody.
If one would make a list of things that can go wrong, starting from the supply chain that delivers parts to the manufacturer, malicious employees at the manufacturer, mistakes the manufacturer can make, attacks on the delivery chain from the manufacturer to the user, to mistakes the user can make creating, using and storing their keys - the list would contain hundreds of points.
Then can you give an example of what you would consider a solution, whether hypothetical or real?
There is none yet.
If there was one, someone would write down the steps necessary and put them on the internet. But I have never seen a description of how to self-custody Bitcoin in a safe way.
Using the banking system instead of crypto.
But freedom.
Seriously, that's why we have banks, still.
Good luck trying send money abroad or dealing with a sudden unexplained account shutdown.
I have had no problem sending or receiving money abroad, thank you.
yet
> Hardware wallets are not a solution to self-custody.
Nothing in this world tends to be "the solution", everything has tradeoffs.
Say you want to do self-custody, what is then the best option? "Don't do self-custody" obviously isn't the solution, as the core use case here is self-custody, so what in your opinion is a better way, than hardware wallets?
If there is nothing better today than hardware wallets, then for now, they are "one of the better solutions" for how to do self-custody, even with the current tradeoffs. But again, I'm eager to hear what the alternatives are.
There is no solution yet.
From a bird's-eye perspective, 3 things are needed: Create a key, derive an address from the key, store the key.
Creating a key safely is possible with dice. You would probably create a seed phrase instead of a key directly, but for this discussion it is the same.
Deriving an address from the key is hard and I have not yet seen a good protocol on how to do it. I have read through a bunch of descriptions of how people do it and they are all weak and brittle. The most popular seems to be "I order a hardware wallet and follow the instructions that come with it". But even people who put a lot of thought into it come up with weak and brittle approaches. I would think there is a way to do it safely. But I have never seen a description of one yet. It might involve multiple computers, multiple software implementations and a hell of a lot of work to create a multisig that is not prone to a single attack vector.
Storing the key is probably the hardest. The most popular way seems to be to store it in a drawer or a safe. So now those coins are just as safe as a piece of gold would be. Or they use a multisig and store the keys in multiple locations. Quite painful. As you have the ongoing problem of keeping those locations accessible and safe at the same time.
Yes, but this threat analysis also holds for laptops and phones.
What do you use to access your bank account online? I use my laptop, or my phone.
If your money is stolen from a bank account via fraud you have recourse to get it back, and it’s pretty straightforward to do in most cases.
Very often this is not the case. Debit / credit cards payments are quite reversible, but once a person send $100,000 or even $10,000 to a scammer it can be quite hard to recover.
Caused by an account take over? This is letter of the law stuff and something bank (and other financial firms) employees receive specific training on. The customers loss is capped and their bank is on the hook.
For inter-bank transactions involving a scam that causes the customer to “voluntarily” send money it depends on the rail. But US ACH rules cover reversals due to fraud and have pretty substantial rules about it.
Even banks find it hard to recover: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
Because the scammers are instructing victims to use methods that are difficult or impossible to reverse, such as gift cards or cryptocurrency.
I'm guessing the best way to go about self custody these days is to have a multi sig wallet, based on multiple hardware wallets from different vendors.
I wouldn't trust any of the hardware wallet vendors. Pretty much all of them have had customer data leaks, resulting in wrench attacks.
You're better off just having a dedicated laptop just for crypto transactions.
Exhibit #9387434 for reasons to stay out of crypto.
My gut reaction is that a hardware implant would be too costly so there's no way they'd actually do that but I guess when you can steal $92M, anything is possible. They could even fab an esoteric chip and still make a profit.
What is the use case of a hardware cryptocurrency wallet besides trapping bitcoins in the Shadow Realm?
Like any HSMs, to put private keys in it and to let things be signed with it.
Making sure malware on your PC can't steal your private keys.
Funny how all the rules of capitalism break down as you approach really big sums of money.
Crypto-brwned!
Crypto is a gift to scammers: billions stolen, victims left with little recourse, and no effective government oversight.
And yet on this exact website people critical of the industry were ridiculed with the exact same rhetoric adopted by the AI industry. It was touted by so many as inevitable, and how we will all be left behind if we don’t join the cult