NOV 20, 2023
Whopping 25 Bitcoin (BTC) Stolen After 10 Years Of HODLing
A Bitcoin veteran and his father recently discovered the theft of ~25 BTC ($919,000) HODLed since 2012. Let's explore what happened and how the theft could have taken place.
A Bitcoin veteran and his father recently discovered the theft of ~25 BTC ($919,000) HODLed since 2012 ❗❗❗
In this article, we will review:
👉 What did it happen
👉 How the theft could have been prevented
👉 What is our take on how the theft took place
What Did It Happen?: Seed Phrase Exposed
A video by @RMessit (aka Rick) posted on Twitter (X) revealed that the seed phrases to their Bitcoin wallet were stored in a self-hosted password manager, KeePass.
The KeePass vault was protected by a 30-bit password (too weak❗❗❗) known only to the father and son, but it was breached.
While uncertain about the breach, Rick suspects the following:
☠️ Most probably the device, where the password manager was installed, had been hacked
☠️ And the hacker was able to install a keylogger or was able to crack the 30-bit password.
What they did do correctly?
Rick and Father had the seed phrases stored using a ‘relatively’ secure system (Even though we know that there can be a lot of debate if the system was secure enough or not…).
The password to access the password manager was not written or stored anywhere but in their heads.
What could have been improved?
The password manager was stored in an electronic device (most probably a laptop or mobile phone) that can be hacked.
Rick and his father, while knowledgeable, may have underestimated the security and safety threats that we all are exposed to.
Secure Your Crypto Assets with Hardware Wallets
Why does Rick give such advice?
Unlike a password manager, a hardware wallet is not exposed even if your laptop, computer, or mobile device becomes compromised.
- Offline Storage Isolation: Unlike software wallets or password managers on internet-connected devices, hardware wallets store private keys offline. This isolation from online threats makes it extremely difficult for hackers to gain unauthorized access.
- A more Secure Element: Hardware wallets are equipped with a secure element chip, providing an extra layer of protection. This chip is resistant to tampering and unauthorized access attempts.
- Immunity to Keyloggers or Malware: Since the private key never enters an online device in an accessible format, it is immune to keyloggers. Even if a user accesses their hardware wallet on a compromised computer, the private key remains secure
👉 But, ❗❗❗ take note because this is very important ❗❗❗ if you do not SAFELY STORE YOUR HARDWARE WALLET SEED PHRASE AND PRIVATE KEY you will find yourself in a similar unpleasant and stressful situation:
- If you store the seed phrase or private key in an electronic form, they may get stolen, the same as what happened to Rick.
- You may want to consider storing your seed phrase and private keys in written form (on a piece of paper) and storing them in a safe place, like a home safe, protected from robbers and accidents.
- In any case, if you have any valuable amount of crypto or digital assets, you want to learn how to protect them from hacks, scams, and accidents by increasing your crypto safety knowledge and applying good safety practices.
The Efforts to Track Down the Thief — Community Support At Its Best 👍
Bitcoin enthusiasts have initiated efforts to trace the stolen coins.
👉 If the stolen funds are recovered, the victim plans to keep 1 BTC, allocate 1 BTC to charitable causes, and reward the bounty hunter with the remaining recovered amount.
Our Take On What Could Have Happened
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