Source: Liu Jiaolian

BTC rebounded to 98k overnight. This is also near the height of the 30-day moving average. Market divergence remains evident. Those who are bearish see the market downturn, while those who are bullish immediately seek a solution. There is no way, the current altitude, the current time node, and the current cycle process are the divergence moments.

Recently I saw someone losing coins. The work computer is used not only to operate the hot wallet and make on-chain profits, but also to hold meetings and work. As a result, he accidentally upgraded the conferencing software with a Trojan embedded in it, and his wallet assets were robbed.

Hot wallets are absolutely undesirable.

Even for Bitcoin veterans who are proficient in encryption technology and think they are proficient in encryption wallet technology, they carelessly put the encrypted private key file on a networked machine, and they are still subject to targeted theft. , losing 200 BTC. Based on an estimate of 100,000 U.S. dollars, the value is 20 million U.S. dollars, which is approximately equivalent to 1.5 small goals at an exchange rate of 7.3.

He is Bitcoin core developer Luke Dashjr. Jiao Lian once introduced his main deeds and contributions.

These 200 BTC are all his wealth. One careless move and everything disappeared.

He stated that he encrypted the BTC private key with PGP. However, the PGP key used for encryption is actually the same PGP key he uses in his daily work to sign the release of the Bitcoin Knots software package. This would be too careless.

Highly used keys have a high risk of exposure. Every use represents a possible exposure. How can you use the same key to encrypt the private key? If the encryption key is exposed, then the private key encrypted with that key is naturally not secure.

As for the encrypted private key file, he should have placed it on his laptop. The FBI suspected that when he was taking his laptop to a meeting, someone gained access to the computer and stole the encrypted private key file. And this person may have already obtained the PGP encryption key. In this way, if you have the file and the key, you can easily unlock the private key and steal all the BTC.

What if the guy at the previous meeting used a hardware wallet and separated the private key from his work computer?

What if Luke Dashjr uses a cold wallet to store BTC?

Maybe they won't lose their coins and empty their wealth.

Some netizens also feel that cold wallets separate private keys from cyberspace and the digital environment, but they also face the risk of illegal infringement in the physical world, such as the risk of burglary or robbery. For example:

You copied the private key mnemonic on paper and put it at home. A visitor saw it and lost the coin.

You copied multiple backups and put them in different places. Every copy now becomes a point of exposure. If any copy is seen, coins are lost.

You are afraid that the paper will be damaged, so you use your handsTake the photo with the camera and put it in the photo album, and throw the coin.

You were afraid that the paper would be easily damaged, so you engraved it on a steel plate and put it at home. It would be burglarized and coins would be lost.

You add a password to the mnemonic phrase, but write down the password and mnemonic phrase on the same piece of paper, leak them at the same time, and lose the coin.

Wait.

However, Jiaolian believes that the vast majority of stolen coins are carried out through the online environment. If you live in a relatively safe area, then a cold wallet is definitely safer than an online hot wallet.

Someone suggested using multi-signature. Keep the private keys of multiple signatures separately.

Or split the private key mnemonic into several parts, multiple fragments, and store each fragment in a different place.

It seems that this can keep assets safe even if they are exposed in one place. This avoids a single point of failure (theft).

But when it comes to losing coins, in addition to not guarding against the thief, there is another situation where you also guard yourself.

Historically, there have been many cases where the hard drive storing the private key was thrown away as garbage, or they could not remember the key to decrypt the private key, etc., resulting in BTC being completely locked up. Who knows? I can't move either.

This is also a lost coin.

As for the situation where you voluntarily hand over the private key or control rights, such as storing the currency in an exchange for a long time, or placing it on a robot platform and controlled by the platform, and may be charged at any time, we will not discuss it.

What we are discussing is self-custody, which means that you are the master of your own assets.

It can be seen that the loss of coins in the context of self-custody is either letting others steal control, or losing control yourself.

On the left, others have stolen control, and on the right, you have also lost control. The security we hope to achieve is to be neither left nor right, but to stay in the middle, that is, we have control and others cannot.

Therefore, the so-called single point of failure has two meanings, and both are very important.

One is multiple backups, a single point of theft. If any backup is stolen, control will be stolen. But the advantage is that as long as there is a backup that is not damaged, I can retrieve these coins and it is not easy to lose control.

The other is multiple shards with a single point of damage. If any shard is damaged, the private key cannot be recovered and control is lost. But the advantage is that only if all shards are stolen will property damage occur.

You basically can’t have your cake and eat it too.