The crisis erupted after a firmware bug caused Coldcard's built-in generator to produce predictable seed phrases. Hackers quickly drained more than 4,500 addresses, stealing 1,367 BTC worth around $89 million.
The incident triggered panic and widespread calls for a return to ordinary paper printouts, which cannot be physically hacked through the internet.
Why paper fails, or how to outsmart crypto thieves and fire
Schwartz, however, cooled the enthusiasm of paper-storage supporters, arguing that a simple sheet of paper containing a private key is completely defenseless against everyday risks such as fire, loss, or theft.
Instead of returning to outdated technology, he proposed using hardware devices, specifically highlighting the SecuX W20, to create what he described as a "nuclear briefcase" strategy:
- Duplication: The investor configures two additional wallets using the same 24-word seed phrase and sets the same PIN code on both.
- Hardware separation: One physical device is given to each of two different relatives. Without the PIN code, the devices are useless to them.
- Password separation: The PIN code is given to two trusted friends who are not connected to the family. Their task is to reveal the digits to the relatives only after the investor's death.
Under this arrangement, neither the relatives nor the friends can steal Bitcoin on their own while the owner is alive. However, when the time comes, the heirs are guaranteed to receive access.
Against the backdrop of vulnerabilities in wallet code, Schwartz's proposed approach shifts the focus toward human engineering, making the distribution of roles a key tool for protecting crypto wealth. In his view, the system is not perfect, but it is still better than standard storage practices.
u.today
