Bitcoin 'Plebs' Rush to Secure Funds Amid Coldcard Hack Fears

A recent security advisory by Coinkite has prompted a surge in Bitcoin transactions under $1 million, with Galaxy Research estimating that around $88.6 million has been drained from over 4,500 addresses.

The issue stems from a defect in the Coldcard hardware wallet's seed generation process, which left some seeds with as little as 40 bits of entropy instead of the expected 128. This vulnerability allowed hackers to guess keys by brute force.

Coinkite has since shipped emergency firmware updates for affected models, but owners are advised not to generate new seeds until the update is installed. The only way to safeguard a wallet is to either perform at least 50 fair dice rolls during setup or use a strong, unique BIP-39 passphrase.

The incident highlights the importance of self-custody and security best practices in cryptocurrency storage. According to CryptoQuant, Bitcoin transfers under $1 million reached a record high of 39,600 BTC on Friday, with Julio Moreno attributing this surge to 'the Bitcoin plebs' moving funds amid fears of another hack.