Bitcoin Core developer Luke Dashjr is having doubts about the safety of Bitcoin’s existing storage solutions after his personal wallet was drained of over $4 million in coins last month.

The programmer suggested that his practice for storing his coins was well in excess of “standard practices,” and yet he was still successfully robbed. 

Is Bitcoin Safe?

On Monday, Dashjr responded to a fellow Bitcoiner on Twitter who asked how others would spend their money if they woke up one day to $30 million in their bank account. 

Some of Bitcoin’s greatest devotees – including MicroStrategy’s executive chairman  Michael Saylor – might champion a 100% Bitcoin allocation. However, Dashjr advocated a (relatively) modest approach: “Maybe 1000 BTC or so, if I could find a way to keep it safe,” he replied, suggesting real estate as a potentially safer alternative.  

On December 31st, Dashjr lost his entire stash of over 200 BTC to a hacker who, according to the developer, compromised his PGP (pretty good privacy) key. A PGP key is an encryption program providing cryptographic privacy and authentication for sensitive files – such as a Bitcoin private key. 

A private key is a digital signature required to send a Bitcoin transaction from its associated wallet. Most experts recommend keeping one’s personal keys in “cold storage” – disconnected from the internet entirely – as a foolproof way of protecting one’s Bitcoin. 

Yet Dashjr suggested otherwise. 

“Standard practices are obviously insecure,” he said. “My security was far in excess of standard practices, and I still got compromised.”

Cold Storage

The developer claims that the addresses from which his Bitcoin were stolen were in fact cold storage addresses. He is not entirely sure that using a ColdCard, a reputable hardware wallet, would have protected his funds. 

Dashjr is still unaware of how his funds were stolen or at least hasn’t disclosed such details publicly. 

Adam Back – one of Bitcoin’s earliest contributors who collaborated with Satoshi Nakamoto, believes Dashjr was targeted through his home network and had his machines compromised. 

Others had a harsher critique of Dashjr, with Bitcoiners like Holdonaut accusing him of spreading misinformation about the ease with which Bitcoin can be secured. 

“I’m just having a big issue with him saying it’s not possible to store bitcoin securely,” he said over Twitter. “Seed phrase on paper/metal doesn’t care about the compromised home network.”

The post After Losing Coins, Bitcoin Core Dev Starts to Doubt Self-Custody appeared first on CryptoPotato.

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Filed under: Bitcoin - @ January 16, 2023 9:12 pm