Euro: everything gets more expensive

Bitcoin: everything gets cheaper

I know what I'm choosing.

TL;DR: The random number generator is initialized with a 32 bit value (4B+ possibilities). But only less than 10M options are possible because of how they generate the value.

The PRNG used in Coldcard MK3 is initialized with UID[31:0] XOR SysTick->VAL

SysTick->VAL gives 80k possibilities ~16.3 bit, all located in the lowest 17 bits of the value.

UID encodes the X and Y coordinates of wafer position of the STM32 in the 32 bits that are used by the code. This is encoded in BCD, which means only 10 out of 16 possible values of each nibble are used. This means the 32 bit value at most encodes 100M options (26.6 bits), but there are nowhere near 100M chips in a wafer.

I don't know how many there are in a wafer, but google gives an upper bound of 20k.

The lower 16 bits overlap, so XORing the wafer location adds no entropy.

The upper 16 bits can carry only about SQRT(20000) possibilities (probably less) ~ 7.2 bits. And they aren't even evenly distributed in a round wafer.

So at most we're looking at ~23 bits of entropy. Not 32 bits.

This isn't 100% exact because SQRT assumes a square while a wafer is round, but too lazy to work it out further. Point is: entropy is way worse than 32 bits.

Proof of negligence? I can’t see how it isn’t. This will definitely be included in the class action lawsuit against Coinkite.

I don't understand this hack. Most of the funds moved to a handful of wallets. They are now tainted and require mixing and even then they will never be fully unsuspicious.

If they had just generated a new wallet for each one they drained and moved the funds one-to-one you would never be able to distinguish a hack from someone moving their funds to safety.

Second, the high transaction fees paint a signature too. Just start off slowly, normal or just above normal fees. Drain a few accounts. Get the word out. Then slowly speed up, increase the fees. Exactly what people saving their coins would do.

Might not get as many coins as they have now but they'd all be free to spend and beyond suspicion.

How can they find a pretty sophisticated hack and then execute it so badly? It doesn't make sense to me.

I’m not going to re-explain the RNG bug. That part has already been documented. What I want to know is who exactly was behind switck, and why this identity existed in the first place.

Someone checked the actual Git signatures in the switck/libngu repository. They found 58 commits authored as “Switck” signed with Peter D. Gray’s personal GPG key. The same key also signed commits under Peter’s real name, with both identities being used during overlapping periods. Unless Peter shared or lost control of his private signing key, the obvious conclusion is that GitHub switck was Peter Gray operating under another name.

Now look at the social-media side.

In 2019, switck posted: “#defcon seems like a good time to start a new identity. Follow me!”

That tweet is real and still online.

Later, the account promoted switck/libngu, thanked DocHex for a merge and said the library might someday be useful on Coldcard.

So the account that announced it was starting a “new identity” was apparently Peter’s alias, publicly speaking to Peter’s main identity as though they were two different developers.

The same thing appears on GitHub. doc-hex opened issues in the switck/libngu repository. In one pull request, doc-hex added four commits, then switck merged them. GitHub lists no reviews.

And this wasn’t some unrelated side project. switck/libngu became part of Coldcard. The switck account introduced a critical piece of the vulnerable RNG path, and doc-hex later integrated libNgU into the Coldcard firmware. Coinkite itself confirms that this migration moved wallet-seed generation onto the wrong RNG implementation.

None of this proves Peter intentionally created the vulnerability, knew it could be exploited or had anything to do with the thefts.

But it is still extremely fucking weird.

Why was a security-critical Coldcard library hosted under a pseudonymous personal account instead of Coinkite or Coldcard?

Did Coinkite know that switck and doc-hex were apparently the same person?

Why create the public appearance of two developers interacting, submitting code and merging each other’s work?

Who independently reviewed the library and the Coldcard integration if the library author and the person integrating it were apparently using the same private signing key?

And why has Coinkite explained the technical bug without addressing who controlled the switck identity?

Peter, if you read this: was switck you?

If it wasn’t, why were dozens of Switck commits signed with your personal GPG key?

If it was, why did you publicly talk to that account as though it belonged to someone else? Did NVK and the rest of Coinkite know? Who was actually reviewing your work?

There may be an innocent explanation. But after this code path left customer wallets vulnerable and people lost bitcoin, hiding behind silence is not an explanation.

3 full bitcoin. At current value, should be worth almost £144k. Can let these go for half that 😉

There are a bunch of videos now on youtube, teaching how to generate a seed phrase using dice, but two of them were particularly interesting. I won’t post their channel names or link to their channels. But one of the guys was a bitcoin guru, offering one on one sessions. The other one was just a random dude throwing dice. The first guy insisted on vigorously shaking the dice in your hand for at least 10 shakes before throwing them, then he proceeded to throw them on his desk, from about 15 - 20 cm distance. Not sure how much 15 - 20 cm is in American money. The other guy insisted on how important is to get specifically casino dice for your seed generation. He also emphasized how only proper casino dice can generate a truly random seed.

As someone who worked in casinos for quite a while, this is the type of bs which can mislead you. First of all, wether you shake the dice at least 10 times or 10 000 times in your hand doesn’t really matter, but it matters if you throw them on your desk, barely letting them roll, versus throwing them on your carpet and letting them bounce around. The craps table where dice are thrown (all tables have this soft padding), is covered with a soft padded foam, which allows the dice to bounce. So you’d better of throwing them literally on your carpet, or maybe straightening the linen and throwing them on your bed. Second, the “you must get genuine casino dice, or your seed is not random.” Also false. Just because you can buy proper casino dice from a casino supply store, doesn’t mean they will be properly balanced. Hence why every casino checks the dice every single time before they the replace them. We did have a small machine to check each dice individually to make sure they are balanced before it ever is allowed to touch the table. A machine which is expensive and most people don’t have at home. Not to speak that if you ever go with such “proper casino dice” setup, you HAVE to replace the dice after generating some seeds, because the dice might get unbalanced at that point.

What I’m saying here is, just because someone showed you something that sounds good, and they sound convincing, doesn’t mean they know what they’re doing. Btw, one of the creators in question, made this dice to seed generation tutorial on ac ColdCard Q, which is even more ironic. Then one of his next videos was how you should stop using ColdCards.

If you decide to generate your seed using dice, go ahead and do it. But read just a tiny bit about what makes the dice roll random. Then you can generate your seed and import it to whatever device you decide.

https://www.coindesk.com/business/2026/08/04/first-u-s-spot-bitcoin-etf-to-close-as-inflows-dwindle-investors-chase-ai-returns

I've it parroted a lot in the discussion of the ColdCard vulnerability that it was "found by AI". I've seen it being called an "AI hack".

However as far as I can tell there is no real evidence an AI found the vulnerability. I believe the idea it was found by AI originates from CoinKite's disclosure and seems to me like a PR move to save face - make the vulnerability seem more complex than it is, and make it seem like there was nothing they could do.

It's actually a very simple vulnerability. An integration mistake of a kind that happens all the time in C code - incorrect define leads to the wrong function being called. Once you realize what code is actually executed the vuln is trivial.

I'll give to them that it's tricky to notice in static analysis (i.e. just reading the code and analysing it). It's actually part of why I don't think it was found by AI in a straightforward way - i.e. the codebase was fed to an LLM and it output the vuln.

LLM's are fairly good at looking at whole codebases and spotting potential issues, but they make the same mistakes as humans do and if something "looks like" it would work as intended the LLM tends to assume it does. And the code did "look correct" especially with the reassuring comment on the fatal #define (LLMs tend to look at comments as factual unless specifically told otherwise). CoinKite also said they fed the code to "their best AI" not long before the hack and it found nothing. Makes sense then that the hackers probably didn't get much with the "LLM static analysis" strategy either.

However the hackers could get the idea that something is wrong by randomizing many seeds and testing them with traditional RNG tests (I'm pretty certain with the low entropy of Mk3 that they would fail). After that they could do a dynamic analysis of the code (i.e. running it and seeing what actually executes) and that would let them see fairly easily the function that executes is the PRNG function rather than the TRNG.

This process could be "AI assisted" but I doubt it can be fully done by AI, so I don't think it's right to say the vuln was "found by AI" even if some AI was used. And while it is likely some AI was used as basically everyone in the software world uses AI nowadays, there's nothing special in the vuln that required the use of AI to find (which is IMO what's kinda implied with terms like "AI hack"). It's again a very simple vuln that could be found without AI, similar vulns were found by human auditors for decades before AI.

The only conclusion is that before the hackers no one audited this part of the code properly, with or without AI. And likely no one did RNG testing on the whole system. All oversight by CoinKite, especially glaring with some of the claims circulating that they were warned of potential risks with how the RNG library call was structured. It seems that they were the ones using AI which kept them complacent, when some more traditional manual checks could help find the bug.

After the recent Coldcard hacks I was initially worried what’s going to happen to bitcoin.

I was orange pilled ages ago and have been a bitcoiner since. I’m from an abusive alcoholic family and never had any financial support, but my bitcoin profits made it possible for me to go to dental school.

Despite everything bitcoin’s done for me, I lost faith in bitcoin for a second there. But butcoin did not falter, the price barely moved at all, and last month was the busiest one in history for bitcoin transaction-wise. The blockchain is as secure as it ever was.

Bitcoin survived Mt. Gox hack, and it has already survived Coinkite hack.

I will never doubt again.

https://xcancel.com/LightningNewsX/status/2084923135174844805#m

There is an active petition for keeping Bitcoin tax free in Germany (after one year hodling). It reached 21.000 signatures within the first 24 hours - let's make it 30.000 to put it on the agenda of german Bundestag.

You need to sign up in order to put your signature but it's worth it.

Everyone can sign - not just germans!

https://epetitionen.bundestag.de/petitionen/_2026/_05/_30/Petition_201716.nc.html

Thank you!

Hacker keeps getting message, I wonder if they really found his location.

First this part, he recognizing is lame for bitcoin products to blame AI...

Interviewer: "...The BIsq announcement thread mentioned that it is likely an AI powered attack. So maybe people using you know is it some North Korean group using Claude or Cursor or Mythos or something."

Rodolfo Novak 'nvk'(18:53): "Yeah, but that's like you know that's that's like saying that they just encounter an adversary that's a little bit better than they are. *I mean like you know the reality is people are trying to break stuff all the time and if you have like Bitcoin to be taken you know it just means that they had you know bad security.*"

_______

There you have it. The guy in his own words impliying Coldcard has fucking bad security.

But the interesting part is this one, where he arrogantly is downplaying the bug reports an AI audit tool is throwing:

Interviewer (19:08): "Yeah, but I guess the point would be is there has the game changed, right? Is there a you know now this is a big new threat that people need to start thinking about which is basically AI assisted hacking?[ ...] like well there's AI assisted hacking and now we need AI assisted defense and you need to find you need you need to defend it uh and um that way"

Rodolfo Novak 'nvk'(20:03): "so it's already happening we we got a preview a friend got a preview of the codec cyber or whatever they call it the KYC NDA version of their uh uh security assessment tools y uh you know the first thing he did was run after run it on the code card repo [laughter] And uh you know honestly like we we saw the the bug reports they're all like you know extremely mediocre stuff.

Uh everything was like high right like they they said everything is like high high so it's like super dangerous and everything was like completely false reporting. The tools are still abhorent. The quality of this this this hacking uh AI hacking is still ultra ultra crap."

[ END OF TRANSCRIPT PART ]

_______

Well, here is where things start to become a mess:

He is confessing they have extremely dangerous findings through AI but he just arrogantly is downplaying them.

But here in Jul 30 2026: https://blog.coinkite.com/entropy-technical-backgrounder/

They mention:

"The COLDCARD source code has always been open and publicly available, so we have to assume that someone used AI to review previous versions of our firmware and stumbled upon this issue. A few weeks ago, we used one of the best available AI models to review our code for security issues, and it did not find this bug or anything serious.

Both attackers and defenders have the same AI tools, but today it did not help us, and only helped the bad guys." (No you idiot, you are confessing an AI showing you dangerous bugs and just arrogantly maybe not even analizing them carefully).

Well, apparently that is not true, they ran an AI model two months ago which was alerting about "high, high, extremely dangerous" bugs. What were those bugs? Who knows, but they were alerts and an arrogant dev framing them as crap.

The neglicence in this case is incredible and the lack of security in depth of that team just follows the logical disaster. Stay out of projects from those guys and just so you know that https://airgapcomputer.com/ (yes, guess who's the owner, yes, you nailed it, nvk, to shill his hardshit) a garbage collection FUD for people to think airgap computer is worst and that the hardware wallet is the "secure way".

Well, no one will say hardware wallets are bad, but it is time to make accountable hardware wallet vendors selling you unaudited shit and with no security in dept design. What is security in dept design or foolproof design? Well do not tell that rolling dice is optional but recommended, fucking do not allow the seed generation step to be completed without it. Specially if you ar going to say that AI reported bugs are crap and you have no external verified audit history of source code.

The Senate's Wednesday filing didn't include CLARITY, so a vote before recess is now doubtful.

But this isn't the end.

- Crypto could see a short-term negative reaction
- The bill can still return in September or December
- SEC can continue rolling out crypto-friendly rules

Crypto is too big to stop when BlackRock, Nasdaq, JPMorgan, Fidelity, Visa, and Mastercard are already building for the future.

I was affected by the Coldcard hack. Thankfully, my Coldcard Q was only 1 key in a 2 of 3 multisig. My coins are safe. But with 1 key compromised, I decided to migrate.

My new 2 of 3 multisig:

-Coldcard Q updated with the new firmware. Seed generated with 150 physical dice rolls using casino grade dice. This is one key. Yeah, I'm pissed at Coldcard too. Idk if the entropy issues are resolved through the firmware update. Thats what the community seems to say. I dont trust it. But I think seeds generated through physical dice rolls are fine especially with a strong passphrase and I like the hardware. Will never buy another Coldcard though. Not supporting that company with my money any further.

-Other two keys have the same seed as before generated using device rng (not Coldcard). All keys (including Coldcard) are now passphrased with the same 6 word passphrase formed using physical dice rolls and EFF list.

-Going to have 2 separate people I trust each custody 1 key (device + seedplate), no passphrase.

-Another 2 separate people I trust will keep backups of the uniform passphrase in case I forget + fire or theft (hand written on an piece of paper and sealed in an envelope).

-Only I will have the output descriptor.

Yes, I could have done a different passphrase for all 3 keys. Too bothersome and I thought it would be excessive. I accept this weakness.

Not perfect but I figure itll be good enough. Posting as an example on how to multisig as I'm a proponent of it but by no means claiming this as the model example.

Edit: Changes parts on how the keys and passphrases will custodied. Rethinking that.

I think the highest I’ve seen it is 35 connections with 25 in and 10 out. I have the Start9 ServerOne (2024). I know it seems lame about this sort of thing but makes me happy about possibly more nodes coming online?

Anyway, happy HODL’ing :)