A hack exploiting a firmware flaw in Coldcard hardware wallets led to the theft of $88 million worth of bitcoin (BTC) from users, reigniting a trust crisis across the industry, crypto media outlet U.Today reported on Aug. 3 local time.

Skeptics including Bruce Fenton (브루스 펜튼) pointed to the incident as a failure of the self-custody philosophy of safeguarding one’s own assets. Early bitcoin developer Peter Todd (피터 토드) countered that the scale of hardware wallet flaws is minor compared with the systemic risks of centralized platforms.

He cited that the collapse of exchange infrastructure has inflicted far greater losses on investors than software flaws. Losses from the bankruptcy of Canadian exchange QuadrigaCX totaled $200 million, more than double the damage in the Coldcard case. He stressed that entrusting private key management to a third party is itself a core systemic risk to capital.

"You just must not lose the 12 seed words."

Todd said the essence of protecting personal assets lies not in the complexity of the blockchain structure but in the lack of a basic culture for handling sensitive information. "Just as you store documents like a birth certificate, users only need to write down the 12 words and not lose them," he said.

He compared it to driving, saying it requires hundreds of hours of concentration and mistakes can cost lives. By comparison, he said, self-custody is a much simpler process. "It is an obvious strategy anyone can think of, like considering hiding cash in different places around the house," he added.

Todd said introducing a weeks-long training course similar to driver’s licence instruction could reduce the rate of fatal accidents from human error to near zero. Risks from low entropy or unexpected situations still exist, he said, but that does not negate the superiority of self-custody. He concluded the vulnerability lies not in bitcoin’s code but in users’ lack of responsibility.