EMERGENCY BITCOIN UPDATE: Coldcard Attack Explained | Rob Hamilton

In early 2021, Coinkite pushed a firmware update to its Coldcard hardware wallets that introduced a catastrophic bug in how the devices generate random seed phrases. The error was a single line of code that, instead of checking whether a function returned "true" before skipping the entropy-generation step, merely checked whether the function existed — which it always did. The result: for over four years, every Coldcard MK3, MK4, MK5, and Q that was asked to "give me some seed words" produced a seed from a dramatically shrunken pool of possible values. On the MK3, the entropy collapsed to roughly 32 bits — a space trivially brute-forceable on consumer hardware. On the later models, estimates put the remaining entropy at 45 to 50 bits: more, but still far below the 128 or 256 bits users expect. By the time the bug was disclosed publicly, attackers had already begun scanning the entire table of possible seed phrases, sweeping low-hanging single-signature wallets. The starting gun had fired, and multiple well-capitalized hacking teams were now in the race.

The only protections that still hold