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TacticalCoder 3 days ago [-]
No matter whether you like or hate or don't care about cryptocurrencies, this is incredible stuff...
Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
We're talking here about a tiny eSIM implant and a little CPU doing OCR on the fonts appearing on the hardware wallet's screen to read the secrets during set up. So the secure element ain't tampered with.
Not long ago the Coldcard hardware wallet had an issue where it'd fallback to a 32-bit only RNG that could be cracked and so many people got their coins stolen.
Now it's Ledger that sees tampered devices all around the world (in Asia for sure but now there are reports about reseller in the EU selling backdoored/eSIM'ed devices).
For people who own Bitcoin at this point one of the only thing kinda sensible to do is to use multisig schemes, like 2-of-2 or 3-of-3 multisig, where your split the secret over two or three different hardware wallet brands (meaning being able to sign a 2-of-2 wallets requires hardware wallets from two different vendors).
When Ledger hardware wallets came out and people said that seed (the list of words) could be intercepted and relayed by a channel bypassing the computer (here by using an eSIM), people would post explaining that people were nuts if they thought such an attack could be pulled off.
Yet here we are.
And Ledger is responsible for very poor security practices: for example it's impossible to use a Ledger hardware wallet in a fully airgapped/offline way. For you're forced to not only upgrade the firmware but also install the Bitcoin "ledger app" (or whatever that is called) after you entered your seed into the device.
Which is complete and total amateur hour.
In addition to that Ledger offers a service to "backup your seed": what could possibly go wrong with that uh?
I'm betting that we'll soon hear about hardware wallets getting drained due to the seed being exfiltrated through "randomness" in how transactions are built/signed (aka "kleptography").
And it's not just representative about people in the cryptocurrencies ecosystem: people simply don't understand computer security and don't understand the potential attacks nor the length at which attackers are willing to go to steal data/funds/ruin other people's lives.
At this point we've heard about chips' plans being modified before the chips are even built (only to lower the entropy of RNGs) [unrelated to cryptocurrencies btw], a worldwide backdoor attempt in SSH, eSIM sending secrets from hardware wallets with tiny attack surfaces.
You're not anywhere near paranoid enough.
nostrademons 18 hours ago [-]
It speaks a lot to the power of financial incentives. As soon as there's money in it, every conceivable attack to get that money has been tried. Which also mimics what happens in market economies: once there is money in it, every conceivable industry springs up, even things that are absurd or harmful. And money appears to be more powerful than things like laws or governments, in that things that are illegal but profitable happen, while things that are legal and unprofitable do not.
In some ways this is kinda encouraging, because it means that even in cases where society collapses and the government disappears, there are really only two fundamental technologies needed to reboot everything: money and contracts.
gamerdonkey 18 hours ago [-]
I kind of get what you're saying, though I'm not sure how much value money would have without a government to back it up. This is true even for cryptocurrencies. If society collapses and I can't convert to some fiat currency, I don't think I'd trade a bitcoin for six slices of bread.
The incentives lead us toward the classic "Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders." scenario.
A currency can arise from any fungible, tradable, generally-durable commodity that the bulk of society decides to accept as being worthwhile. In prisons cigarettes often fill that role; in pre-agrarian hunter gatherer groups it's often little baubles like shells. Government isn't necessary for this, but social contract is. You need to have enough faith that your neighbor will accept the currency to accept it yourself.
Cryptocurrencies have the advantage that they can be spent worldwide, instantaneously, with little friction, while most commodities require that you be physically present to exchange them. They're also significantly easier to store and more resistant to garden-variety theft, as long as they're secured by passphrases. But they exist in the uncanny valley of requiring electricity and Internet. It is fairly unlikely that the government collapses and yet you still retain always-on electricity and Internet. What will you use to pay the electric company, and how do you enforce the contract that they keep providing you power?
There's perhaps an interesting role for a digital cryptocurrency that does not require always-on connectivity, eg. something that can be carried over SneakerNet for local transactions, and then automatically syncs up with the global system when the community regains Internet connectivity. In actual conflict zones today, people seem to get intermittent electrical & Internet connectivity, eg. the electricity will come on for an hour a day with rolling blackouts, and then you try to get everything charged in that one hour. And there are enough solar installations out there that several communities are likely to retain significant power even in the event of a societal collapse. But current crypto's consensus mechanisms aren't built for intermittent connectivity: you'd need to build and design something that is eventually consistent, where a weeks-long fork does not result in two competing cryptocurrencies.
nwatson 15 hours ago [-]
In some prisons, it's fish packets from the commissary.
I think the key to making a pocket-switched protocol that did currency-like things is the CALM theorem.
It's pretty restrictive. You couldn't just port bitcoin to a CRDT while keeping CALM. You'd have to rethink the economics around the constraints of what's possible to do in a distributed way. But maybe that would be worth doing anyway.
godwinson__4-8 16 hours ago [-]
> A currency can arise from any fungible, tradable, generally-durable commodity that the bulk of society decides to accept as being worthwhile. In prisons cigarettes often fill that role; in pre-agrarian hunter gatherer groups it's often little baubles like shells. Government isn't necessary for this, but social contract is. You need to have enough faith that your neighbor will accept the currency to accept it yourself.
Are cigarettes really currency in this case? Aren't they more like one of many possible barter units? Can't you also price things in ramen packs in prison?
Similarly, I thought the sea shells thing had been sort of debunked. In that scale of society you don't need currency, you know the guy. David Graeber summarizes this rather intuitively. Why would you need to give a guy a sea shell in a "hunter gatherer group"? You're gonna see him every day of your life and everyone is gonna know/remember he owes you one. It would be like giving your sibling a sea shell because you did them a little favor or something. It doesn't actually happen that way because it would be a complete waste of time, just actually return the favor next time. I believe the sea shell thing is more like a gift, rather than a currency. Like you might give someone a flower to tell them you think they're swell. Presumably you think that because they helped you at some point. That doesn't make it currency. People just liked giving each other shells.
I think on most modern theories, currency really comes about from conquest. The idea is as you expand these informal IOUs are not enough. You don't want to have to lug around ramen packs or cigarettes. So at the point of a sword or w/e you say hey take this coin and give us food and then you honor the coin enough and people trust it, not because it's "fungible, tradable, generally-durable commodity that the bulk of society decides to accept as being worthwhile" but because if you don't accept it the government will kill you. And if you do accept it then not only will they not kill you but they'll give things back to you later, which you will end up being a positive incentive for everyone. Now instead of a presiding over a killing field you've created a market. But without the threat of the state, it is not coherent. That's what government is.
That's basically what it says on American money. "This note is legal tender for all debts, public and private". So sure a business can refuse you service, that's a separate issue. But if you have a debt in the United States and you try to give them US dollars and they refuse and say, no thanks actually we demand cigarettes - well now they are breaking the law, aka inviting the wrath of the state. So everyone uses dollars because the last thing anyone wants is to be in debt and think a pack of ramen is gonna work and they just get to say no thanks cigarettes for me please.
And of course, you also don't want to get impaled on a spike by a dude who looks suspiciously like that guy on the coin you probably should have taken.
nostrademons 15 hours ago [-]
Currency is used for trade between multiple distrusting groups, credit is used for trade within a social group. There was an article recently on HN about the highland tribes of Papua New Guinea [1] and it described how the natives would trade amongst tribes using shells.
You actually see this on a small scale today in the functioning of many small communities, eg. you don't actually exchange currency to pay the host of a party, but you are expected to reciprocate and host sometimes yourself if you want to keep getting invited. There's a surprisingly large amount of these unpaid micro-transactions that happen, eg. my wife has gotten free childcare, free advice, free (used) furniture, free baby clothes, etc, all in the heart of Silicon Valley, because she reciprocates and also gives away her old furniture, baby toys, baby clothes, advice, introductions, childcare, etc. But when we have to pay the contractor for work on our house, we need dollars. When we buy a computer, we need dollars. When we buy all those goods that we give away new, we need dollars. That again reinforces the "credit is for people you know, currency is for people you don't" distinction.
Barter is used when a previous currency system collapses. The currency is no longer guaranteed to be accepted, so people want hard goods that they know they can use. But barter is an unstable equilibrium: as you mentioned, currency is just barter where one particular good becomes so widely accepted that people will take it not because they want it, but because it can be traded for other things that they want. There are reports of the Bosnian War [2] that described how alcohol and ammo quickly became pseudo-currencies because they were universally accepted and could easily be traded for what you actually needed.
Graeber isn't wrong, but as an anthropologist he over-indexes on the within-group interactions. There are lots of documented examples of currency emerging spontaneously from trade between groups where the groups all mutually decided that one type of object had value.
Hmm... do you not have a credit card? I often reflect on how paying with dollars seems so disadvantaged in today's economy. If you plan to pay back on time, why would you ever use dollars?
I'm not sure your in group/out group thing really holds up. I think of your credit/wife examples as not "credit" but something like basic reciprocity, closer to barter.
I think it's just a bit of blurring of terms. In my mind, bullets and ammo are just not currency in the same way a coin is. You can call it a "pseudo-currency" but the pseudo is kind of cheating.
I'm also not sure "There are lots of documented examples of currency emerging spontaneously from trade between groups where the groups all mutually decided that one type of object had value" disproves the point about violence/government. Can't I do the "pseudo" move back at you? What is the mechanism of the "mutual decision"? Would it be unlike the ones that lead to states? It sounds like everyone agrees something has value so we can have a dispute resolution mechanism. The implication being if you don't agree the other choice is violence? What if I say this "spontaneous collective of groups" is a "pseudo-government"?
Where would that leave us?
nostrademons 12 hours ago [-]
I'm talking about "credit" in the David Graeber sense, where people effectively just remember who has done good things for them and reciprocate, not in the modern sense of credit cards and bank accounts. They're connected, but the former is more general.
I do think that the development of currency is intimately connected with the development of government. The core problem government solves is dispute resolution, and I would bet that the majority of disputes come from transaction where one side does not hold up their end of the bargain. In small communities you just have the tribal elders adjudicate, but as you start doing more currency transactions between mutually-distrusting groups that can't agree on their authority figures, you need a system in place for dispute resolution. Cue states.
My point is simply that currency comes first. State formation is a consequence of extended trade networks transacting with currency, currency and trade is not a consequence of state formation. To my knowledge this is historically accurate, and there are a lot of examples of currency spontaneously arising without a state to back it.
Hell, cryptocurrency itself is a good example. We now have a viable transnational, trustless, instantaneous currency. We do not have a viable transnational trustless dispute resolution process. And we very much feel the lack, because crime and fraud is rampant in cryptocurrency transactions. Currency creates the problem that government solves. Creating a government that can go along with cryptocurrency is an unsolved exercise left to the reader.
lifeisstillgood 7 hours ago [-]
>>> Currency creates the problem that government solves.
Thank you - brilliant
godwinson__4-8 11 hours ago [-]
It's interesting, your point makes sense with the caveat of a blurring of terms.
I mean in the sense of, state formation was of such significance that I don't think you can say something like "currency came first" as if currency prior and post state formation is the same thing. It feels like the same sort of "pseudo-currency" with "currency" equivocation.
So if your model is - basic credit in that communal reciprocative sense, then you start trading with more distant outgroups, for this credit doesn't work, so everyone agrees on a currency, someone off in the distance doesn't agree, then states form to adjudicate disputes.
Then it is sensible as a primitive model, but I would just merely suggest that in the same way trying to say currency comes first is kind of a blurring the meaning of currency perhaps to the point of being a stretch, I think in this case to, it will be less orderly. One way this is blurred almost intrinsically in your articulation is via the term dispute resolution process. This could mean anything. It occurs to me that outright conquest and banditry is one way to resolve a dispute. Perhaps in places were there was "spontaneous" centering around a particular currency, this sort of violence was a predicate. I tend to think the need for violence and domination (and mitigations against the same) - what I think of when I think of states "resolving disputes" - was baked into the germ of humanity much earlier than what we might term "state formation". This gets back to the "pseudo-government" point I was trying to make earlier. I think of these things in parallel, rather than in sequence. If at their core humans are violent, such that they make violence, fear violence, and seek tradeoffs to manage violence, then this violence is a driver across currencies and states and trade networks, regardless of a determination of which "came first", if such a determination is even meaningful without greater specificity.
Similarly, I'm not sure if "State formation is a consequence of extended trade networks transacting with currency, currency and trade is not a consequence of state formation" is accurate in the same way. I suppose we have to unblur what "state" means.
I thank you for the back and forth though, which I enjoyed. I feel a need to do more reading on this topic, though I would guess much of these questions are not really falsifiable, as some of the answers are surely lost to history. Thanks, have a good day!
Terr_ 15 hours ago [-]
We should be careful to distinguish when credit-cards are used for credit purposes versus the common scenario where they're just the default/convenient payment method and a debit-card could substitute just fine.
Kind of like how the local church might traditionally manage birth/death/land records, but that doesn't mean the documents are sacred or a religious observance.
usrusr 7 hours ago [-]
In the context of the current discussion (minus the part that's accidentally derailing it by focusing too much on other meanings of the term credit), credit card vs debit card is not relevant at all: they are both denominated in currency, so they are currency. This is not a discussion about cash vs electronic.
Currency vs credit, as it was used some posts up is more like quantifiable vs not quantifiable. It's not about the exact catering expenses of parties thrown ("they had champagne, we have to invite them twice!") it's about inviting or not inviting. Not about the number of hours taking over the children, it's about being there when needed.
godwinson__4-8 14 hours ago [-]
> We should be careful to distinguish when credit-cards are used for credit purposes versus the common scenario where they're just the default/convenient payment method and a debit-card could substitute just fine.
Well I mean technically they are always for credit purposes, even if they are the
"default/convenient payment method"? That's part of the advantage, but it's still credit. You get to spend and pay later. It wouldn't be a very good evaluation for credit purposes if it didn't work like credit? Or am I misunderstanding you?
It's just to say that "credit" isn't just about an in vs out group anymore than debt is. Or anymore than "currency" is? I'm not sure how the distinction you make helps clarify that question. The point is why would credit be for people you know, and currency for people you don't? Isn't credit just a particular agreement around said currency?
Terr_ 11 hours ago [-]
Let's compare two scenarios:
1. I live in a village. I buy flour on credit from the miller, because I lack funds and they know I'll be able to pay them back after I sell my own textile goods at market.
2. I travel overseas to a store I've never seen before and I will never see again. I transact $100 on my credit-card purely because my debit card won't work for some reason. I leave with the goods, reminding myself to pay off the balance ASAP with funds I already possess when I get back to the hotel and a laptop.
Technically they both involve "credit", but it's not really equivalent. The first case involves a direct relationship in a community, while the second is indirect, a stranger trusting my card-company. In the first, incurring a debt is an intended feature, in the second the temporary debt is just a weird inconvenient quirk that I'd rather skip entirely because it makes more work for me.
In short, just because someone uses a credit card doesn't necessarily mean it's "credit" in the anthropological sense.
godwinson__4-8 11 hours ago [-]
I mean fair enough but we were already talking about credit cards, not villagers.
You said (emphasis added):
> We should be careful to distinguish when credit-cards are used for credit purposes versus the common scenario where they're just the default/convenient payment method and a debit-card could substitute just fine.
So it wasn't about "credit" in the anthropological sense, as credit cards are never used in such a way. Unless you are going to suggest there is some bifurcated way of using credit cards where one offers a more "direct relationship to my community". In short, my misread wasn't as you indicated - about failing to misunderstand something about credit cards. Rather it was conflating a general sense of "credit" (such as credit cards) with what they had meant, "I'm talking about "credit" in the David Graeber sense, where people effectively just remember who has done good things for them and reciprocate, not in the modern sense of credit cards and bank accounts." - which is what you term the "anthropological sense".
So I appreciate the nudge in the right direction, but I hope you see my point given what you actually conveyed. Thanks, have a good day!
_heimdall 12 hours ago [-]
I've heard many arguments that barter came before currency, if I'm not mistaken that was even one of Adam Smith's tropes in his writings that influenced currencies and economies we have today.
I don't necessarily buy the idea that someone with a chicken and needed bread wandered around looking for a baker in need of chicken, but their argument does fly in the face of the idea that barter follows failed currencies.
If nothing else you have a chicken and egg problem to unwind there, and barter does seem a bit more basic or simple than currency so I'd have guessed it came first.
sandinmyjoints 3 minutes ago [-]
There's a book Debt: The First 5000 Years (by the David Graeber that parent commenter references several times) that observes that there’s no documented case of a society that ran mainly on barter and then invented money to escape it. The "barter first, then money" story is mostly a thought experiment. I'm not in a position to confirm or refute this based on my own knowledge or to do the research to develop that knowledge, but I'm not aware of anyone seriously challenging Graeber on this point.
bombcar 8 hours ago [-]
It's less "I have bread and want a chicken" and more "I'm mostly self-sufficient by necessity, and provide what I need, but I have extra bread this week and Bob over there has a chicken ..."
You can watch both barter and currency develop in groups of children almost spontaneously.
fn-mote 14 hours ago [-]
Sea shells were traded across the North American continent. I don’t know if they were currency, but they were found 1000 miles from the shore.
The point is that they weren’t just used within a single group where everyone had access to more for the cost of only labor.
mitxela 12 hours ago [-]
Does pricing things in euros mean dollars aren't a currency? Are dollars just one of many interchangable barter units?
markovs_gun 14 hours ago [-]
While your assumptions about barter societies are pretty much true, I think you're off on the origins of currency being tied to force. This is overly influenced by modern fiat currencies whose values are derived from government requirements rather than valuable assets. There was a long period of time where precious metals and other valuable items were used as stores of value without a central authority requiring their use. People used official coinage because its weight and purity was standardized and it made things easier, and the value changed alongside debasement, often in spite of official attempts to prevent this. People also used different currencies alongside each other based on their weights and purities. The only times in ancient societies where we have something similar to what you're describing where a specific currency must be used is in taxation, and even then, most taxes were settled in equivalent values of other goods and not specific currencies. The only example I can think of for what you're describing is the Jewish temple offering system in the second temple period, in which certain obligations to the Temple were ruled to have to be paid in Tyrian sheckles specificall
godwinson__4-8 14 hours ago [-]
But what do you mean? We have multiple currencies today? Each one is still based on force within its jurisdiction. Yes people try to get around the law. That doesn't change the nature of force. People speed all the time. This is not evidence that the government does not have authority over the interstates, rooted in force.
Sure it's evolved, but I don't see anything in your comment that really disputes the tie to force. Of course, taxation is connected to force. Additionally, as I addressed in another comment, a lack of modern "central authority" does not mean a lack of connection to "force" or violence. People can come up with distributed or atomized versions, which nevertheless arise under a similar tradeoff with respect to the fear of violence.
ButlerianJihad 12 hours ago [-]
I am sorry to burst your "bubble", as it were, but cryptocurrencies are not, in fact, currencies.
Speaking in terms of U.S. regulation and legislation, crypto is variously regulated as a "commodity" or as a "security" and therefore, cannot be formally considered a currency. The name, "cryptocurrency" is a marketing ploy, which cleverly seeks to dilute the meaning of the term, which is a term of art, and is still reserved, in legal circles, for things which are, in fact, currencies, and function as currencies, and are regulated as currencies, which crypto… is not.
It was rather painful to me in particular, because a few weeks ago, I registered and attended a municipal education session on fraud. And this session was co-hosted by an actual representative of the Arizona Corporation Commission - Securities Division. I can prove that because my prize for the session was an authentic, imprinted, ACC/SD pizza slicer! Anyway, as soon as she mentioned crypto and asserted it is a class of "currency" I tried to call her out, and I asked more than once, and being reluctant to turn the session into a referendum on her legal knowledge, I finally let her win. It was embarrassing.
Anyway, no, cryptocurrency has never been a currency. Not in the USA. Other nations may deem it as such, but I kind of doubt it so far. Please do not conflate real currency with crypto. They are distinct things that are easily distinguished. The consumer should not be deluded into thinking otherwise.
akiselev 18 hours ago [-]
> I'm not sure how much value money would have without a government to back it up.
You don't need a government backed paper currency, you need a mint making precious metal coins. History has several examples like the mints at the Potosí silver mines or those by the East India Company that enabled trade without effective governments to back them up by just providing reliable coinage that spread to many other polities.
As long as there isn't some crazy inflationary force like colonizers arriving with an unlimited supply, we can use something as simple as beads or seashells for currency quite fine. It just means more labor overhead to create that currency in the first place.
mountainb 13 hours ago [-]
The East India Company was itself a highly effective quasi-governmental institution with a powerful military, a special relationship to a great power, and many other relationships to various kings and nobles who ran the local governments. It's not the best example for this type of phenomenon for this reason.
I think it's also the case that hard money is a different kind of phenomenon from paper money reflecting an entirely different philosophy concerning property and what it is. It reflects a natural law perspective in its most earthy and primitive form, which is that gold and silver are money because ancestors from time immemorial saw it as such due to certain intrinsic characteristics. Governments certainly regulated mints, but also marketplaces could and did regulate coinage on their own which is possible because of its physical nature. If a coin is clipped or made into a false alloy, that can be detected and corrected without state institutions.
Paper money by contrast tends to reflect more modern positivist theories of property in which property rights are deemed to exist because the state speaks those rights into existence. In the middle ages and even before, states as we know them now did not exist and could not exist, so positivism would have been absurd on its face, and its most direct application in the form of artificial currency could not be made.
akiselev 12 hours ago [-]
> The East India Company was itself a highly effective quasi-governmental institution with a powerful military, a special relationship to a great power, and many other relationships to various kings and nobles who ran the local governments. It's not the best example for this type of phenomenon for this reason.
The EIC's first mint was operational in 1643, long before it became a quasi-state. It started to become a quasi-government more than a century later, when it started raising its first major army in the 1750s culminating in the Battle of Plassey and didn't really have the resources to fully become one until the diwani in 1765.
NooneAtAll3 17 hours ago [-]
doesn't even have to be coins
Somalia operated on paper money valued at the cost of producing it
xp84 15 hours ago [-]
I don't know enough about Somalia (or what time period you're talking about) to necessarily refute this argument, but I'd examine the definition of "operate" here before accepting this as a proven system.
bombcar 18 hours ago [-]
"Currency without government" can and has existed, though you could argue circularly that whatever can "issue" a currency is a government of a kind.
How something comes to be is distinct from how it is used.
mitxela 12 hours ago [-]
Blockchain consensus rules are isomorphic to governments and your selection of a chain is basically voting. Cryptocurrency isn't independent of governments - it's just invented its own kind.
andai 5 hours ago [-]
>that things that are illegal but profitable happen, while things that are legal and unprofitable do not.
I'm not sure. I want to say there's volunteering, charities, clubs, religions etc. But those all need resources (time, energy, money) put into them to remain viable. I suppose if something is unprofitable it means the resources (money or not) are drained faster than they go in, and the entity dissolves.
ChrisMarshallNY 18 hours ago [-]
Sir Terry predicted this, in his C. M. O. T. Dibbler character[0].
I was just thinking about click fraud, and how I'll bet that a significant number of clicks on sites are now being driven by simple (they don't need to be too complicated) LLMs.
Money is a contract, so I guess its just contracts all the way down.
rightnutwingjob 8 hours ago [-]
The two most important fundamentals are agreements (contracts) and the ability to enforce them (that is, to seek redress) - as in: law enforcement.
A high trust society. Everything else is downstream of that.
ignoramous 18 hours ago [-]
> It speaks a lot to the power of financial incentives
Also, to the power of modern-day cryptography that rubber-hose and evil maid (backdoors) are the only viable (even if expensive) alternatives.
> the government disappears, there are really only two fundamental technologies needed to reboot everything: money and contracts
Both of which require "governance", but post-collapse, it may be of form that may not benefit the collective.
DoctorOetker 16 hours ago [-]
It doesn't demonstrate the security of cryptography, just that entities exist with sufficient skill and knowledge for supply chain attacks but lacking cryptographically relevant mathematics.
It doesn't prove the hardness assumption, if it did we could trot forward any toddler and ask if it knows the factors to some RSA product, and "prove" hardness assumption for factoring integers...
red_admiral 18 hours ago [-]
After the Hezbullah pagers incident, the basic assumption has to be that every possible supply chain attack you can think of is realistic.
jeremyjh 14 hours ago [-]
It’s always been said that if Mossad is your adversary you are already fucked. But for a some crypto thieves to operate at this level this early is a bit surprising to me. If you had asked me last year to predict when this would happen I probably would have given this year significantly less than 50% probability.
tedd4u 11 hours ago [-]
Buying your hardware wallet from random 3rd party no-name distributors in China is kinda asking for trouble, isn't it?
rurban 9 hours ago [-]
Likewise from a big coorp US or Swiss company.
The difference is that the western attackers go free, whilst the Chinese attackers will very likely be executed.
jeremyjh 3 hours ago [-]
I’m referring more to the sophistication of the attack.
ikiris 11 hours ago [-]
I think you're vastly underestimating the sophistication of players that target this scale of theft when you make it easy by using an infrastructure designed to be preyed upon.
Banking systems exist such as they do with the regulations that they do for a reason.
kevin_thibedeau 15 hours ago [-]
I consider my phone compromised and will not do banking on it at all. The rest of the world is living in blissful ignorance that will burn them some day.
echoangle 14 hours ago [-]
They are liable to the consumer but they can get their money back from their supplier in turn. As long as you only sell stuff sold to you by someone reputable you can get money from, it should be mostly fine.
kevin_thibedeau 13 hours ago [-]
Please explain the process for reimbursing stolen money from a vendor which will disavow any responsibility as soon as they're on the hook for *illions.
4 hours ago [-]
throwaway2037 8 hours ago [-]
Why don't we see more theft using banking apps on compromised phones in highly developed countries? Also, if you online banking, what platform is safe enough for you?
Canada 3 hours ago [-]
There's tons of it, it's just not reported on very well. For corporate it just becomes an insurance matter
mitxela 12 hours ago [-]
I thought it was Israel who did the pager bomb attack, not Hezbollah?
userbinator 12 hours ago [-]
Israeli attack on Hezbollah.
jacquesm 16 hours ago [-]
And yet, you could point that out to lots of people that place hardware in extremely sensitive locations and they most likely won't believe you because to do so would require a lot of prepwork. And right next door sits a few hundred million worth of gear...
Horffupolde 16 hours ago [-]
[dead]
hunter-gatherer 12 hours ago [-]
I bought my first ledger hardware wallet circa 2017 (If I recall correctly). At the time, they shipped it without any anti-tamper packaging, and even had a note bragging about how it didn't matter, because of how their devices were set up. I forget the exact wording, and would be interested if anyone here has it. Anyways, at the time I was doing hardware hacking for 3-letter agencies, and decided to not use ledger devices when I saw they weren't too concerned with their supply chain.
I bought directly from ledger. I don't know if they were assembling devices in house at the time or not.
> Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
I think it's good to remember this is always the case. Attacks on tamper evident seals are commonly called "theoretical" or "lacking value" in practical terms, but recent customs evasion using counterfeit seals in the US shows that to be untrue.
Heck, The Wire had an arc about people bypassing customs tamper-seal tags.
mgfist 18 hours ago [-]
This is a big part of my problem with crypto and why I'm bearish on it breaking through to normies. Traditional financial institutions just seem so much safer all in all, not to mention having far better UX.
bluGill 17 hours ago [-]
The big thing traditional institutions give you is logs of everything. Sure if I get your account number I can take all your money - but there are traces of that and so it is easy to arrest me after the fact.
Don't give out your account numbers, there will be a lot of hassle should an evil person get it. However you have a reasonable change of getting your money back in a couple years. (this is also why you get warning about some countries - a few will not cooperate with traces and so the money is lost)
FabHK 13 hours ago [-]
> Don't give out your account numbers
Is that a US thing? In Europe, companies have their account numbers on their letter heads and websites, and people are quite comfortable giving out their account numbers.
Surely just knowing someone's account number can't be enough? Sweden's biggest bank uses your national identification number (equivalent to social security number) as your checking account number, and Sweden's national identification numbers are public information.
bluGill 34 minutes ago [-]
I don't know how it works in Sweden. Some accounts have more security. In the end if I know the right numbers (which may not be your national ID) I could drain your bank account - but I would be caught if I tried so even hardened criminals won't attempt it.
mitxela 12 hours ago [-]
That's strange because all you need for direct debit authorisation is the account number and name, and a PNG image of a physical signature.
SenHeng 10 hours ago [-]
In Japan, that authorisation needs to come together with an official certification, something that’s only valid for 3 months and you have to get it yourself from the local justice branch office.
jgilias 10 hours ago [-]
That’s definitely not the case in Europe. There’s no way to start a debit operation out of my account other than:
1. Something electronic that kicks of the thing where I need to enter the “ID codes” from device or app;
2. Being present at the bank and having been ID’d;
klausa 8 hours ago [-]
There definitely is, that’s how SEPA direct debit works.
master-lincoln 6 hours ago [-]
yeah. I am also unsure why we do not see more fraud here.
Is it because of the 8 weeks of no questions asked refund possibility for payers and up to 13 months for unauthorized/fraudulent transactions? Or does the 5 business days lead time to get direct-debit play a role?
kylpytakki 57 minutes ago [-]
It is precisely because of the refund policy. It is so generous that, per my understanding, most SEPA direct debit fraud is abusing the refunds. Most banks do not require much supporting evidence for claiming the debit to be unauthorized, and unlike credit card disputes, the merchant doesn't even get to make a statement in the process.
throwaway2037 8 hours ago [-]
Why don't we see more fraud using this technique?
gosub100 1 hours ago [-]
So I can walk to a bank, speak to the teller, and withdraw from any account number by showing them that signature? I think not
27183 16 hours ago [-]
There's also the Federal Deposit Insurance Corporation (in the US).
nradov 12 hours ago [-]
FDIC is great but it really only protects against bank insolvency. It doesn't come into play if money is fraudulently transferred out of your account.
throwaway2037 8 hours ago [-]
The reason why traditional works is the fraud can be reversed. If money is stolen from your accounts, as long as you are not the cause, in most cases the institution or govt will make you whole.
mw888 8 hours ago [-]
It is reinvented by 'crypto' in the form of 'subjectivity' (as opposed to the hard objectivity of 'your keys your coins' and the absolute acceptance of all objectively (though perhaps fraudulent or thieving) valid transactions.
One example of subjectivity is if, and this happens, a bug is found which can drastically increase the supply of coins beyond the intent of the creators; everyone comes together and removes those state transitions manually despite their objective validity. A more practical notion would be some type of "this transaction was fraud, someone has authority to reverse it." Of course, this is a hard tradeoff, but users should be able to make it.
iammrpayments 11 hours ago [-]
The traditional banks are not better than crypto for receiving and sending money, specially when it comes to international transactions.
The only thing they are better is providing security in an easier way.
throwaway2037 8 hours ago [-]
Is Wise considered traditional or not? Also, Revolut? Those two come to mind when I think about easier/cheaper international transfers.
Hendrikto 6 hours ago [-]
> not to mention having far better UX
Yeah, it is totally great to have to set up a different account for every service, then having to do AML and KYC, and then having your account suspended for no apparent reason. So great that international transfers takes days and tens of dollars in fees, if they succeed at all. So great how a large part of the world‘s populace is denied access to the global financial system. Great as well how centralized it is, so things go down when there are technical problems at your bank. Absolutely awesome how Canada was able to freeze bank accounts of people who donated to the ”wrong“ cause.
They totally have it figured out, we should stop looking for alternatives. We already have the perfect system for the ages. Anybody who even tries is delusional.
Terr_ 16 hours ago [-]
I think it also encourages us to rethink specialized and hardened advices versus general ones.
The same attack on every desktop and laptop would be... significantly harder.
intrasight 13 hours ago [-]
I'd argue that if used properly that crypto is more secure than most banks.
throwaway2037 8 hours ago [-]
Here "if used properly" is lifting so heavy it can be used to move Mount Everest.
mplewis 13 hours ago [-]
It can't be more secure if you have no recourse after you're hacked.
GoblinSlayer 7 hours ago [-]
You can buy insurance. Like for a stolen car or burned house.
bdangubic 13 hours ago [-]
argue it
mbesto 13 hours ago [-]
So explain why the Winklevoss twins store their crypto secret words in bank vaults?
I remember seeing a TV program[1] where the UK govt had proposed some hare-brained key escrow thing (this is circa 2000 ish) and they had an expert on to discuss it. Well they didn’t mess around. The expert they had on to explain the drawbacks of the scheme was Whitfield Diffie[2] and he was up against some government contractor slug in a suit. Anyhow Diffie explained that there is essentially no security measure that is effective if you create a prize of infinite value. If the prize for circumventing security is great enough, it will be possible to use money to get around whatever security.
I always wonder to what degree these omissions are really accidents. There must be some fraction where 'the hacker did it' was baked in from day #1. Not saying that that is the case here but I've seen some pretty questionable stuff that is supposedly very secure (bank security tokens for instance), where there was ample space left in the devices and no anti-tamper measures beyond the case being glued shut. Some even have replaceable batteries for convenient access to the interior right behind the keyboard.
argee 12 hours ago [-]
> When Ledger hardware wallets came out and people said that seed (the list of words) could be intercepted and relayed by a channel bypassing the computer (here by using an eSIM), people would post explaining that people were nuts if they thought such an attack could be pulled off.
Every single time I thought maybe people on the internet know what they're talking about, I've been proven wrong. The internet is for entertainment purposes only.
The only educational exception has been people who weren't exactly posting on the internet, such as the Berkshire Hathaway shareholder meeting videos or Stanford lectures.
There's a lot of grief can come from it, so I try and read this poem often. [0]
This is not a homogenous mass...it also keeps changing. The internet is just a medium. It's like saying people writing books know what they talk about. Doesn't make sense. Anybody can write on the internet or write a book
gmueckl 4 hours ago [-]
This also speaks to Bitcoin's design weakness in the form of the distributed, authority-less blockchain: there is no authority that can undo or correct illegally made transactions. I know that this is used as a selling point for crypto coins, but I would argue that it is the central enabler behind these conplex technical attacks because it shifts the economy far into the attacker's favor.
tacker2000 9 hours ago [-]
It's not doing OCR on the screen, it's intercepting the pixel data that comes unencrypted over the SPI bus that connects the CPU to the display.
gblargg 18 hours ago [-]
I don't get hardware wallets that have you enter the key on another device. Or don't show the transaction on the hardware device's screen, with every destination and amount, with a button to confirm on the device. Or trusting a wallet to generate a random seed. Or not using the most entropy possible (e.g. 24-word seed). Anything less is dropping the ball.
artdigital 12 hours ago [-]
? Ledger devices are exactly what you’re describing: the key stays on the device, you don’t enter it anywhere. Transactions are confirmed on the small screen + button on device and it displays sender and receiver of a tx.
dfox 5 hours ago [-]
The root cause of this attack is that the typical cryptocurrency wallet operational model involves the key leaving the device in plain text as part of the setup/backup process. Such a thing is impossible on any normal correctly configured HSM (while creating backups is possible by some sort of multi-step process where the secret key material never exists in plaintext outside the security boundary, how exactly that is done differs significantly between vendors).
Derelicte 3 hours ago [-]
Ledger devices generate a private key internally, and it never leaves the device's secure element chip. The malicious chip in this attack reads the display to get the 24 word recovery phrase shown during setup.
These Ledger hardware wallets are following the best security practices for hardware wallets and still got hacked.
pipes 6 hours ago [-]
I bought some bitcoin in 2017. Im using electrum, I'm terrified I'm going to get hacked. To the point where I don't even have electrum installed anywhere. I was thinking paper wallets are probably my best bet. I'm not sure what to do. And right now I don't have enough time to seriously investigate my options.
_heimdall 12 hours ago [-]
If you really don't want to trust digitally generated seed phrases or digital wallets in general, and that seems reasonable to me, just roll some dice or flip coins.
Its slow, but it will never have been tampered with and can't be digitally cracked if you have multiple physical copies of the resulting seed.
bob1029 9 hours ago [-]
Perhaps it is possible that VisaNet is priced more fairly than it would seem at first glance?
I don't have to think about any of this stuff when I am using the payment terminal at Kroger. We have well engineered systems that eliminate the need for being constantly on edge about every monetary transaction. I can lose my entire actual wallet and experience ~zero financial impact, even if a malicious party obtains it.
ronsor 9 hours ago [-]
Because card readers brick themselves if opened or tampered with. If Ledger designed their hardware the same, this attack would not be possible.
bob1029 9 hours ago [-]
So we are going with an additional layer of complexity?
What happens if my wallet bricks itself due to some misconfiguration or environmental transient? I don't have to keep multiple redundant copies of my payment cards around just in case my physical wallet self destructs.
neoncontrails 17 hours ago [-]
Would love to hear people's thoughts on this excerpt from the Epstein files in light of these disclosures:
Lol at the thought of Steve Bannon speaking at DEFCON (last link).
mplewis 13 hours ago [-]
2018? Irrelevant
Terr_ 9 hours ago [-]
Or at any rate, Ledger did have some vulnerabilities slightly before that month (and probably after) but it doesn't seem like an especially noteworthy connection.
quacktopia 7 hours ago [-]
Lots of security relies on potential attackers being lazy and relatively 'sane'.
There are lots of security measures you can bypass if you pretend to be crazy within given bounds or simply stop acting sane.
I've worked in payment terminal hardware security and this is not surprising to me at all.
This attack on the Ledger wallets would definitely rate as amateur in terms of sophistication in that world.
whitepoplar 17 hours ago [-]
I don't own any crypto, but if I did, I'd probably choose to use a multisig setup with 2+ signers, including at least one (regularly pentested) software wallet.
littlecranky67 17 hours ago [-]
It depends what you do with your coins. Hardware wallets are meant to be used for people that frequently trade and need to sign transactions.
I always thought it is stupid to HODL using a hardware wallet. For HODLing, just get a random computer (no mailorder) and run debian13 with electrum (it is in the official repo, not an external package hence protected by standard debian safeties). Once you generated you keys, back them up and either wipe the machine, or at least airgap it.
Extra bonus: Raspberry pi 5 runs debian 13 out of the box.
Gareth321 19 hours ago [-]
Here I am using an iPhone app like I have been for a decade, feeling safer than ever. I'm really glad I didn't jump on the hardware wallet trend.
littlecranky67 17 hours ago [-]
It always depends how much money you got in the wallet. People in the crypto space go super paranoid, 2-of-3 signing schemes with top-notch security, hardware legers, metal-plated keys that are burried in the woods etc, and in the end they hold less than 1000$ in the wallet... All safety measures should be chosen relative to the amount you are actually securing.
intrasight 13 hours ago [-]
How about a bank vault? 500 year old tech that is still safe.
haakon 8 hours ago [-]
In many places, there are no safety deposit boxes (vaults) available to regular people anymore. In my country, there are zero options and the only recommendation is to put your valuables in a safe in your home (which has a completely different security model than a bank vault).
cj 13 hours ago [-]
How do you put bitcoin in a bank vault?
littlecranky67 8 hours ago [-]
You create your seedphrase - the famous 12/24 words, print them on a piece of paper and put it in the bank vault. Ideally some sort of fireproof container/envelope around it, and if you plan on long-term storage rather write them down manually with long lasting ink pen.
mlazos 12 hours ago [-]
He’s saying put regular money in the bank vault, why complicate with crypto.
That app did not have nearly the effort put in, compared to the subject of this article.
That poster didn’t even prove the fake wallet app stole his bitcoin (in the sense required in a court of law). Presumably it wasn’t worth the effort because their money was gone and not coming back, but still.
xp84 15 hours ago [-]
Can't believe people who went to the trouble of figuring out a hardware wallet are getting robbed just as badly as my naïve ass, who just held all my crypto at FTX
throwaway2037 8 hours ago [-]
As I understand, they recovered quite a lot in the FTX bankruptcy. The guy running it now ( John J. Ray III ) is a bankruptcy legend. What was your recovery rate(%)?
chihuahua 12 hours ago [-]
And at least you know who stole from you (SBF)
wslh 18 hours ago [-]
Not sure if your comment invalidates the context: your iPhone app (or hardware or iOS, etc) could have a bug that was not discovered yet. It's all about attack vectors, and opponent motivation and resources.
smolder 5 hours ago [-]
Bitcoin rich people generally did nothing legitimate to earn their wealth and are often straight up devious criminals, so hearing this story about them being robbed is just a rare instance of karmic justice, IMO.
tjomk 5 hours ago [-]
This is the argument that scammers and ransomware gangs use: we (the criminals) live in a poor country, and you, the rich white people, enjoy all the benefits. Nothing happens if you lose some of your savings, especially if it's a business and not some granny.
smolder 5 hours ago [-]
Sure, but I don't rob anyone at all, regardless of how awful they are, and I have definitely been the victim of grift, because I pay taxes in the US.
samudrijan 15 hours ago [-]
Got worried there for a second about the mokka pot I got through Amazon instead of Bialetti.
mmooss 18 hours ago [-]
> Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
It's predictable: The ROI of attacking cryptocurrencies in this manner is high enough to make expensive attacks worthwhile. It doesn't make other expensive attacks on typical end-users worthwhile, and they remain far-fetched.
mohamedkoubaa 13 hours ago [-]
"that's been described" is the important part of that statement
jacquesm 16 hours ago [-]
Ah, but typical end-users is only one class of targets, industry is another and there the pay-off can be substantial.
p1necone 13 hours ago [-]
Post it note in a drawer somewhere baby
0xbadcafebee 18 hours ago [-]
> So the secure element ain't tampered with.
Back in the day, RSA SecurID hardware tokens were completely physically sealed, with no room for a backdoor. Tampering with them in any ways destroys them or makes it physically obvious. That's a physically secure design. This Ledger thing looks more like a consumer toy.
wahern 17 hours ago [-]
Not to contradict your point, but in 2011 RSA's SecurID backend servers were hacked. TOTPs require shared secrets, and their server had all the secrets to the SecurID keyfobs they managed. Security is hard.
throwaway2037 8 hours ago [-]
Was that a nation state-level attack?
0xbadcafebee 14 hours ago [-]
Yep that was a flawed design. Modern ones (ex. Token2 Programmable) are identical but allow burning your own seed, while tampering destroys it.
14 hours ago [-]
throwaway2037 8 hours ago [-]
Anything about RSA SecurID hardware tokens always makes think about the guy who used a web cam and OCR to read token LCD screen.
> or "only existing in the mind of a paranoid person" did actually happen.
This reminds me of the 2020 case where a union organizer thought there was a spy camera inside a utility pole outside his house. It was in a conspiracy subreddit, so it seemed like the deranged ramblings of a ravingly-paranoid stranger. But they found the addresses of the IP cams and had plenty of evidence to corroborate it.
Now, Flock cameras are just normal.
I think the 2020s will be defined by this trend. "Things which only existed in the minds of a paranoid person" becoming normal parts of daily life.
mminer237 18 hours ago [-]
Most large cities in the world have had thousands of public CCTV cameras for decades. Traffic enforcement cameras have been super normal for even longer.
lynndotpy 17 hours ago [-]
I am not talking about those. These cameras were targeted and pointing directly into peoples windows, set up by the local police department, under the guise of being electric utility boxes.
In August 2020, this was unbelievable, and it would have been considered reasonable (if wrong) to dismiss OP as paranoid, especially for the subreddit they posted in.
socializer 19 hours ago [-]
> No matter whether you like or hate or don't care about cryptocurrencies, this is incredible stuff...
> Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
Huh? Nothing here is theoretical or far-fetched. Hardware attacks of this sort have been documented for decades and basically part-and-parcel for most intelligence agencies, from the US govt installing backdoors in Cisco hardware to the exploding pagers for Hamas. This is not even the first hardware wallet attack documented on the internet (although it might be the largest-scale one).
It's just that hardware attacks are complicated, expensive, and risky, so they're usually done in a targeted manner. The only news here is that the crypto community painted a gigantic target on their backs by inventing a currency that can be taken from them with zero recourse, broadcasting it to the world that they own a lot of it, and then buying cheap hardware from overseas retailers to "protect" their assets. So all of sudden, it was profitable and relatively low-risk to cast a wider net.
It's fascinating in the sense that we're discovering from first principles why the financial system works the way it does. The damage caused by cryptocurrencies has been really pretty staggering, for little real benefit.
mmooss 18 hours ago [-]
It is far-fetched because it is an attack by thieves on consumers, not a state intelligence agency and intelligence targets. It's far-fetched for me to fly an B-2 bomber, but it's been commonplace for US government for decades.
mattoxic 15 hours ago [-]
after you entered your seed into the device.
ewww
otikik 6 hours ago [-]
> You're not anywhere near paranoid enough
I refuse to touch anything crypto with a ten-foot pole. I don't know if that makes me "paranoid", but it is certainly very easy. Just stay away from the thing doing drug markets, scams and rugpulls every month.
acejam 1 hours ago [-]
The US dollar would like a word
otikik 49 minutes ago [-]
Fair. I didn't include the word primarily in my sentence. Please assume it is included now.
rootsudo 11 hours ago [-]
Exactly, inspiration.
walrus01 11 hours ago [-]
> For people who own Bitcoin at this point one of the only thing kinda sensible to do is to use multisig schemes, like 2-of-2 or 3-of-3 multisig, where your split the secret over two or three different hardware wallet brands
What about ignoring proprietary hardware wallets, and implement your 'wallet' as a small, bare-bones, self installed debian system with enough empty disk space to be a full node, that stores the data on a dm-crypt volume? Buy the hardware in cash from a random used computer store. No it won't be as convenient and portable. But if you trust standards-based crypto, you can implement your own ssh tunnel or whatever to it from your other client devices. This also lets you take 1:1 disk clone images of the dm-crypt volume and safely back it up to remote locations at any time you want.
palmotea 11 hours ago [-]
> We're talking here about a tiny eSIM implant and a little CPU doing OCR on the fonts appearing on the hardware wallet's screen to read the secrets during set up. So the secure element ain't tampered with.
Nit: did it actually do OCR? Given the implant was embedded in a specific known device that probably used specifically known fonts, you'd think they could just do a lookup a character's block of pixels to read the screen.
bri3d 17 hours ago [-]
> this is incredible stuff...
Is it? The theory and even the implementation is literally a gas station credit card skimmer for crypto. I do agree that anyone dismissing attacks on Ledger was foolish, but mostly because Ledger is an obviously low-quality product on even a cursory inspection, not because we need to become even more paranoid conspiracy theorists.
dist-epoch 18 hours ago [-]
Multiple crypto-experts said that the safest crypto wallet is a recent iPhone in airplane mode which is only used for this purpose. Because it's much harder to implant that your average hardware crypto wallet.
aftbit 18 hours ago [-]
On the other hand, the attack surface of an iPhone is huge compared to a dedicated hardware wallet, and it's hard to keep it in airplane mode and actually transact your coins.
dist-epoch 16 hours ago [-]
You can use QR codes or USB sticks to sign offline transactions, same as with a hardware wallet.
bix6 18 hours ago [-]
Why is it harder to implant?
bri3d 18 hours ago [-]
The hardware is much more sophisticated, miniaturized, and high-speed, and the supply chain is much more generic; a Ledger is a really primitive piece of hardware with a simple display interface and a ton of empty space inside it. An iPhone has no wasted space and extremely high-speed onboard buses that would be hard to sniff. Additionally, with Ledger, you know that every customer is going to be using the device to access crypto, so it's an easy target nearer the head of the supply chain. With an iPhone, you have no idea what end-user to target the implant against.
Gigachad 17 hours ago [-]
You can walk in to an official Apple store and buy an iphone direct almost anywhere in the world. Crypto thieves would have to have compromised the entirety of Apple's supply chain and found space inside the iphone to fit a whole spy chip (of which there is basically none).
bondarchuk 17 hours ago [-]
Or just a single apple store sales employee...
r_lee 16 hours ago [-]
right, so you'd have to know the store with your victims upfront, know which ones to give these highly expensive implanted iPhones to (or have a lot of units), be able to always bring enough for the specific colors the customers want....
xp84 14 hours ago [-]
I'm especially amused at all the different iPhone SKUs you'd have to stock your crooked phone salesman with. 4 storage tiers, Pro and Pro Max, and 4 colors. So that's 32 boxed phones, a good-sized duffel bag full, to smuggle into the Apple Store, to keep on-hand but avoid anyone finding them, in anticipation of the victim's visit, just to cover the Pro range. Imagine you spent $75,000 on those phones and about as much on the technicians' time to open them all up, install the implants, and perfectly re-seal them. Your salesman has successfully kept the phones hidden for a month, and the target walks into that store and says "You know, I really like the color the non-pro model has this year."
Wololooo 18 hours ago [-]
I'm going to guess it's a number's game, you might be able to do it with an iPhone but it's not guaranteed to go to a crypto user, whereas the other one is a bespoke system for the purpose.
tenuousemphasis 18 hours ago [-]
I presume because iPhones have a secure TPM and nobody is targeting them for crypto supply chain attacks.
aussieguy1234 14 hours ago [-]
How about a recent Pixel with GrapheneOS, again kept in airplane mode and only used for this purpose? Using QR codes for transaction signing.
teiferer 17 hours ago [-]
How about if you build your own airgapped hw wallet? There should be plenty folks here who would be capable of doing so. (Doesn't even have to be the most hardened and audited implementation ever since you won't release this to anybody.) This makes you vulnerable to purely very targetted attacks.
As long as the cost of sucha single-target attack isn't substantially below its potential upside, you should be safe.
Otoh, it's only meaningful if you have more than just toy assets in there.
There should be a range between those two though that would contain lots of folks comfortably.
dist-epoch 16 hours ago [-]
> How about if you build your own airgapped hw wallet?
Also known as buying a laptop, removing the WiFi card, and putting stock Ubuntu on it.
Yeah, the problem with "crypto hardware wallets" is the same as the problem with "secure phones for drug dealers" - they are an extremely juicy targets, you KNOW that any user of them is your target.
teiferer 7 hours ago [-]
> Also known as buying a laptop, removing the WiFi card, and putting stock Ubuntu on it.
4G chips cost nothing and can be super small.
jrib 4 hours ago [-]
that's why i only power it once inside my faraday cage closet
lern_too_spel 18 hours ago [-]
"crypto-experts"
jyap 18 hours ago [-]
[dead]
napierzaza 19 hours ago [-]
[dead]
apercu 19 hours ago [-]
This is why I sold my bitcoin early - all those years of reading Phrack. Sure, it was $300 at the time and I could have made more, but I had no idea how to securely _store_ it. Still don't.
aaronrobinson 18 hours ago [-]
You are king sensible. Well done. Just $90,000 per BTC worse off ha ha.
apercu 18 hours ago [-]
I had 3 whole bitcoin. Lol.
winwang 19 hours ago [-]
I remember chatting with about AI a few months ago about the issue of foreign RAM sticks being able to cooperate with websites to serve different files/instructions, undetectably. Scary stuff.
hypfer 19 hours ago [-]
Are you sure whatever the LLM said was actually credible though?
fn-mote 14 hours ago [-]
Absolutely not… but maybe the LLM was trying to tell them it’s a crazy idea and they are only reporting that a conversation occurred.
happyPersonR 11 minutes ago [-]
"tiny eSIM implant and a little CPU " .... i can't even get something like this for my raspberry pi ? lol :(
What would be cool is if someone from Ledger like did some reverse engineering, dumped instructions on how to buy these devices like this and made it so we could use them for hobbyist usage with our own esim. I could for sure think of some use cases for like remote wipe etc.
cowlevel 1 days ago [-]
Not mentioned in article: MediaMarkt, the German equivalent of Best Buy, was selling these compromised devices on store shelves in every city in Germany.
mikeryan 1 days ago [-]
Selling Ledger wallets or compromised Ledger wallets? My understanding was a reputable reseller (Cryptobilis) was bought and then the wallets were modified via the reseller chain. This isn’t on Ledger it’s a (literal) supply chain attack. Unless MediaMarkt was buying via the reseller?
They would remove them regardless of known compromise, because they have no way to verify it in-house and it’s the simplest PR and legal strategy.
DaSHacka 7 hours ago [-]
Verifying it in house is extremely easy once someone else has already done the hard work of identifying the existence of the implants in the first place.
Any random person who can play spot-the-difference with two different pictures and is armed with a hammer could verify it in 15 minutes.
They don't even have to be technical or understand what the chips do or how the technical aspects of the compromise work, a raw visual check is all you need.
chinathrow 1 days ago [-]
> This isn’t on Ledger it’s a (literal) supply chain attack.
Supply chain attack?
"Can't do shit, not my problem."
If it was that easy to shed responsibility.
mikeryan 1 days ago [-]
TBF that characterization was mine. It’s not been Ledger’s response AFAIK.
refulgentis 19 hours ago [-]
I don't know coin stuff, but if top comment's...
"We're talking here about a tiny eSIM implant and a little CPU doing OCR on the fonts appearing on the hardware wallet's screen to read the secrets during set up. So the secure element ain't tampered with."
...is accurate...it's one of the rare times I'd agree there's nothing they can do. And I was all prepared to storm in here saying "convenient excuse!"
charcircuit 18 hours ago [-]
>there's nothing they can do
The device should have bricked itself after someone opened it up to put hidden stuff inside. Also showing the key phrase to the user instead of keeping it secret to the secure element is a questionable decision.
infinite_spin 18 hours ago [-]
people do need the option to repair devices, especially when they contain valuable information, so I don't see an automatic bricking to be a reasonable solution
numpad0 9 hours ago [-]
The word for crypto device self destruction military guys use is zeroize. It can be triggered manually or automatically. A zeroized device can be repaired and signed off by a trusted person, then a new key loaded by another person.
Maybe these devices could ship in a tamper-detection-only mode, then detection triggered by user to be inspected by the user, then factory installed firmware wiped and reloaded if desired, have user key loaded to the firmware, and the shell sealed back up with electronic and physical detection enabled.
whaleofatw2022 17 hours ago [-]
There's a medium. Something ironically close to apple's 'non fully approved and supply chained repair' thing (especially when we consider the case of a screen that could be OCRing data and tossing it out later).
'You have unexpected components. You may want to have your device inspected or risking compromise of x/y/z. Should we continue or lock it down'?
seviu 17 hours ago [-]
I would love to know if I can use one of this to get unlimited data worldwide.
Jokes aside, keystone wallets are air gapped. And not air gapped but awesome the lesser known but imo best of all, gridplus lattice1.
Heck, even a trezor, despite their mail provider being hacked, is better.
I, however, dont endorse the iPhone idea.
Just don’t buy ledger, terrible company. Many of my friends are getting endless spam because of them. The key backup is a disaster after they promised it was not possible to retrieve it. Their software stack is closed source.
This is imo the last nail in the coffin for them. They should refund all the money lost, and issue a worldwide recall.
Lots to hate about them.
cowlevel 12 hours ago [-]
How does your air gap defend against someone opening the case and adding a wireless transmitter though? Which is what happened here.
seviu 8 hours ago [-]
You are right, anti tampering, and not even that. Air gapping protects you from other threat.
Lattice for example, has strong anti-tampering features.
Then what is the best solution aside from tightly controlling the supply chain?
chinathrow 18 hours ago [-]
If you can't back up your keys, then what?
charcircuit 18 hours ago [-]
I'd rather have to buy another wallet than have to worry that someone is able to drain it.
blensor 1 days ago [-]
I wonder what the liabilities are for that
drob518 1 days ago [-]
Not much unless you can show that they knew about it. Otherwise, they are just as much a victim.
V__ 1 days ago [-]
They are liable. In Germany the seller of a product is responsible not the producer.
drob518 16 hours ago [-]
Then they have to be insured. Or the limit of their liability must be capped at the cost of the product or something. Otherwise they would have to reverse engineer every product they carry and just about every retailer would run the risk of being out of business any time someone pulls something like this. That’s obviously not happening.
4gotunameagain 3 hours ago [-]
It's germany, everything is insured.
look up german angst
dylan604 18 hours ago [-]
I'd assume a company like that would have insurance for this. They'd be able to reimburse the customer knowing they'd get paid back from an insurance claim. That is, if they are actually insured for these kinds of losses.
A few years ago, the Canon camera battery supply chain was intermingled with knock offs. The seller I bought from was exchanging for legit batteries or reimbursement when a customer made a claim.
tzs 13 hours ago [-]
From what I've read the seller's responsibility is just to fix or replace the product. Damages caused by the defect are the manufacturer's responsibility.
superze 1 days ago [-]
Why doesn't it surprise me that the shittiest company Media Markt is somehow involved in this. These guys are about to close shop anyway, rest in piss Mediamarkt.
megous 1 days ago [-]
The technique is so coool. I mean taping the screen output on the way to the display to get around having to hack the secure element. :)
userbinator 12 hours ago [-]
A more mundane and common use of this technique is for reading the displays of weighing scales, digital micrometers, and similar instruments which did not originally have the feature to enable computer connectivity.
toomuchtodo 4 hours ago [-]
In my teens, I built a digital serial interface for a scale company my uncle was a salesperson for, think highway and landfill truck scales. This is how I built it, very straightforward to your point, mitm from the scale to the display.
Analogue hole is how I did a more efficient smart garage door hack than what people were talking about here at the time. Soldered zigbee switch into the physical button; worked great :D
grishka 1 days ago [-]
I had a similar idea to bypass DRM for a while. Some kind of board that goes between the display panel driver and whatever sends it the signal, and outputs something you can capture, e.g. DVI or unencrypted HDMI. Not sure how practical it is.
fpgaminer 17 hours ago [-]
In the past (circa a few years ago) the connection between the main board for a display and the glass driver board would be a ribbon cable, LVDS signalling. Very straightforward and typically not soldered. There'd be a ribbon cable connector. So yeah, you could just put a board between easily. And there are LVDS to H264/H265 chips already.
But as the other comment points out, older HDCP is broken wide open so ... easier to just use that. Plenty HDCP strippers on the market.
0cf8612b2e1e 18 hours ago [-]
HDMI 1.4 has been leaked and there are devices which will force communication to this protocol level.
They should have posted the weight with and without the device in it.
Also: never leave empty space in a hardware key, pot the whole thing in
epoxy.
theamk 24 hours ago [-]
No, this is May version. If you look at the twitter thread, the October version is different and looks much more "stock"
(sadly I have not found nice website with newer version photos yet)
flibble 1 days ago [-]
I heard they reduced the battery size to make space for their chip.
jacquesm 1 days ago [-]
Yes, hence the potting. You'd have to figure out a way to open the device without breaking it.
londons_explore 1 days ago [-]
When there are millions of dollars to be stolen, someone can figure out how to remove the potting.
If need be, just grind and cut till you are back to the one silicon wafer that contains crypto keys, then rebuild the whole lot from scratch, add your evil parts, then re-pot it.
jacquesm 1 days ago [-]
That would work on an already configured wallet that you stole but the skill level required is orders of magnitude higher than what's on display here. I know all of the theory on that one but I would probably not be able to pull that off.
The best I've done is to modify a potted chip by very careful thermal imaging to figure out where the part was that blocked the feature I wanted to unlock (market segmentation) and then drill through the case to a depth just higher than the chip. You'd have definitely been able to spot the difference. This was at the millimeter level. Recently there was a post about a group doing this at the chip level, which I thought was extremely impressive, and again, even with the recipe out there duplicating it would still be very hard.
bcraven 1 days ago [-]
Xbox Kamikaze hack (How a drill defeated the Xbox 360’s console security)
Hah! Very similar, they even made a jig like I did.
justinclift 1 days ago [-]
> The best I've done is to modify a potted chip by very careful thermal imaging to figure out where the part was that blocked the feature I wanted to unlock (market segmentation) and then drill through the case to a depth just higher than the chip.
Sounds like a good approach when you only have a single (or just a few) of the devices so you need to be careful.
With hardware wallets (aka substantial incentive), then the attackers could order a bunch of them for sacrificial zero-ing in the exact places to drill with a CNC/microscope/etc.
jacquesm 1 days ago [-]
> Sounds like a good approach when you only have a single (or just a few) of the devices so you need to be careful.
Yes, initially I had just the one. But once I had it figured out there were lots of other people that wanted their device 'improved' so that jig got used plenty of times. Even so working on other people's hardware always felt very scary, especially poking around with a drill in a sensitive piece of hardware. Even so, they all worked, it was a neat little trick.
throwaway2037 7 hours ago [-]
Did you blog about it? That would be like catnip around here.
jacquesm 5 hours ago [-]
No, this was a couple of decades ago, I didn't have a blog back then and I have zero evidence. But I can tell you some of the details: the device was a Philips 'Marc' CB transceiver. They made only one model both for the US and the EU market so there were 22 channels available in the EU and 40 iirc in the United States. But the rotary channel selector did have all 40 positions. That made me wonder... what if? So I opened the device and there was this very large plastic blob in the middle of the circuit board with obviously a large (40 pin iirc) chip underneath it. I realized that if I tried to physically remove the blob that I would most likely break the chip so that wasn't going to work.
But it was clear what it did: as soon as the channel selector went to a forbidden channel the blob sprung into action to disable the chip underneath. I measured the effect on the pins underneath that were accessible from the other side of the board and noticed that a whole bunch of them got shorted to ground. That was the hint I needed. A friend ran a laser game company and they had a nice little IR camera with built in display, that was used for calibration of the IR beam collimators in the laser guns (the laser doesn't actually do any of the shooting, the thing is basically just a very powerful remote control with a lens that sends out a relatively narrow beam). I set it up above the the blob and set the channel selector to a good channel and let it warm up. Had a look with the camera. Then set the channel selector to a bad channel, let it warm up again and had another look with the camera. The difference was pretty obvious, there was a hotspot right in the middle of the blob. I marked the spot and made a drill jig, then it took me a few days to gather courage and stick the drill in, it worked on the first try. That gave 18 nearly empty channels to play with. Once I had it figured out the second one was a lot easier :)
Liftyee 19 hours ago [-]
Market segmentation?! What device is high quality enough to be potted but still has the same hardware modified by jumpers across models?
jacquesm 5 hours ago [-]
Not quite a jumper. CB transceiver.
curiousObject 1 days ago [-]
This story is a case of someone tampering with devices in the supply chain, before the user first receives them.
What you’re describing is a different thing. It’s an “evil maid” attack, when you tamper with a wallet that is already set up by the user. Also, it would be ultra difficult and expensive.
What you’re saying is possible. But:
It would probably be cheaper to build a total fake Ledger Wallet, then just replace the new real wallet and deliver a fake with a weak entropy generator. Any case, that’s not what has happened this time.
londons_explore 23 hours ago [-]
The legit wallets have an online way to verify they are genuine by cryptographic means. A totally new fake couldn't do that.
curiousObject 22 hours ago [-]
Thanks. I believe you’re right a totally fake copy couldn’t verify. So that idea was wrong.
(The MITM supply chain attack which has happened succeeds because it preserves the original secure hardware but intercepts the secret data at the display interface. But a low-effort mimic of the entire device like I suggested? That wouldn’t work).
lightedman 19 hours ago [-]
Ledger provides a 'Genuine Check' mechanism to determine the authenticity of the device; however, it explicitly warns that it cannot detect added implants when the device's original Secure Element remains intact.
And as this workaround leaves the original Secure Element intact, good luck detecting the supply chain attack.
odo1242 18 hours ago [-]
I think that’s where the epoxy from earlier in this comment chain is supposed to come in.
j-bos 1 days ago [-]
millions out of thousands of wallets. Epoxy potting raises the lottery ticket and odds of getting caught by a great deal.
csomar 8 hours ago [-]
It's stupidly easy to open the device. I opened mine last night with a knife and a hairdryer. I left no perceptible marks either. I watched a few videos where the device was opened without a hairdryer. Apparently, those who did the implant put more glue than Ledger itself.
m4rtink 1 days ago [-]
Well, still a safer reason for clandestinely reducing the size of a battery in a mobile device many people carry around close to their body.
atomicUpdate 15 hours ago [-]
Interesting. Everyone that read the article also heard that.
Ah good one, more useful info in that one. That kapton circuit might be traceable to whoever ordered it.
curiousObject 1 days ago [-]
And the Vodafone NL SIM could also offer some leads
hocuspocus 1 days ago [-]
Vodafone NL data only SIMs are very common for IoT connectivity when devices need to roam in Europe, such as in connected cars.
I'd assume it's not a coincidence and fraudsters made sure there's no easy way to trace anything back from the SIMs.
jacquesm 1 days ago [-]
Yes, this is quite true. Virtual providers are quite easy to set up that way but the amount of KYC for this kind of service is substantial. Even so, these SIMs/eSIMs have turned up in all kinds of bad places such as SIM farms.
jacquesm 1 days ago [-]
I have some friends there, I will ping them.
theamk 24 hours ago [-]
This is May version. If you look at the twitter thread, the October version is different and looks much more "stock"
curiousObject 22 hours ago [-]
These recent teardowns of compromised Ledger wallets are frightening. Because the infiltration of hardware looks very pro. Mass production and standardized parts added.
Even weight difference might not be obvious. He compared weights for one Ledger product but the small variations in weight among genuine devices made comparisons not clear.
Possibly only X-ray would uncover the fake without cracking the case?
(Warning - MagicalTux is Tibanne or Mark Karpeles. He has a “complicated” legal history, but this looks legit)
lxgr 1 days ago [-]
Is that safe for devices containing a lithium battery?
jacquesm 1 days ago [-]
Good question: the battery here doesn't look like it had any room for expansion so it wouldn't be worse per se. But normally you want a little bit of room around a battery, I guess a thin foam liner would allow for that and would still allow you to pot the whole thing.
lxgr 1 days ago [-]
Worst case, a bloating battery cracking open a plastic enclosure or being able to vent gas through the gaps in one would be preferable too, right?
jacquesm 1 days ago [-]
Absolutely and it is why I hate these little pouch cells in wearables. Phones, headphones, in-ear pods, sports gear, toys (which kids take to bed), they're absolutely everywhere and if you look at the way they are usually mounted it is a small miracle there aren't more issues. Powerbanks in particular are a pretty serious hazard.
varispeed 1 days ago [-]
They could x-ray it, carve out epoxy with nothing inside, put the logger, apply epoxy.
jacquesm 1 days ago [-]
Not that easy. The potting epoxies made for this purpose are nothing like your regular epoxies. They're pricey and when you try to break them you are very likely to tear the parts right off the board. This is the brand I have used in the past:
The devices we made were put in places where there was a significant risk of tampering and to the best of my knowledge nobody ever managed to break the epoxy bond to the point that the circuit was still functional. But as I wrote above: not cheap.
InsidiousWombat 1 days ago [-]
Take off the case, put your own entire module in, put the case back in. Epoxy doesn't solve much.
...frankly, selling one as DIY kit have highest chance for tamper resistance. Tho pretty untenable with small SMD components sadly
ArtTimeInvestor 2 days ago [-]
Hardware wallets are not a solution to self-custody.
If one would make a list of things that can go wrong, starting from the supply chain that delivers parts to the manufacturer, malicious employees at the manufacturer, mistakes the manufacturer can make, attacks on the delivery chain from the manufacturer to the user, to mistakes the user can make creating, using and storing their keys - the list would contain hundreds of points.
embedding-shape 2 days ago [-]
> Hardware wallets are not a solution to self-custody.
Nothing in this world tends to be "the solution", everything has tradeoffs.
Say you want to do self-custody, what is then the best option? "Don't do self-custody" obviously isn't the solution, as the core use case here is self-custody, so what in your opinion is a better way, than hardware wallets?
If there is nothing better today than hardware wallets, then for now, they are "one of the better solutions" for how to do self-custody, even with the current tradeoffs. But again, I'm eager to hear what the alternatives are.
bsza 2 hours ago [-]
> Say you want to do self-custody, what is then the best option?
A $5 USB stick with Tails on it. You can make as many clones as you want, so no need for a recovery phrase. It's not specialized hardware, so there's no incentive for anyone to look for money on it (plus it's encrypted). If you want to be extra tinfoil hat, make sure you only plug it into an air-gapped machine and copy any output (address, transaction hex etc.) onto another USB.
ArtTimeInvestor 2 days ago [-]
There is no solution yet.
From a bird's-eye perspective, 3 things are needed: Create a key, derive an address from the key, store the key.
Creating a key safely is possible with dice. You would probably create a seed phrase instead of a key directly, but for this discussion it is the same.
Deriving an address from the key is hard and I have not yet seen a good protocol on how to do it. I have read through a bunch of descriptions of how people do it and they are all weak and brittle. The most popular seems to be "I order a hardware wallet and follow the instructions that come with it". But even people who put a lot of thought into it come up with weak and brittle approaches.
I would think there is a way to do it safely. But I have never seen a description of one yet. It might involve multiple computers, multiple software implementations and a hell of a lot of work to create a multisig that is not prone to a single attack vector.
Storing the key is probably the hardest. The most popular way seems to be to store it in a drawer or a safe. So now those coins are just as safe as a piece of gold would be. Or they use a multisig and store the keys in multiple locations. Quite painful. As you have the ongoing problem of keeping those locations accessible and safe at the same time.
thinkmassive 2 days ago [-]
How is multisig "quite painful" in your opinion?
ifwinterco 19 hours ago [-]
Say you've done everything right and used 3 coldcards spread across 3 geographic locations using 2of3 multisig.
You're feeling pretty proud of yourself, your coins are super safe.
Then it turns out the RNG in the coldcard mk2 was badly/maliciously implemented and is completely insecure. You need to move your coins right now.
You can probably see the issue
aftbit 18 hours ago [-]
You'd probably want to use diversity for this - do 2of3 multisig with a Coldcard, a Ledger, and a Trezor.
ifwinterco 16 hours ago [-]
Yes, but the complexity of the setup (which is already way too much for any non-cypherpunk normies) is starting to get kind of ridiculous.
I am still pro crypto and fascinated by the technology but we have to admit the original cypherpunk vision was unfortunately never going to work, we're going to end up with something else
embedding-shape 1 days ago [-]
> There is no solution yet.
Again, "best solution we have available" for self-custody is hardware wallets, so we're back to square one.
Imagine if I tried to discuss and argue about things like this on a TypeScript submission? "No, this won't actually solve the problems of TS" I say, "What is the solution then?" someone asks me and I reply "There is no real solutions to those problems, just use Clojure, problems avoided!", completely missing the point.
Aurornis 19 hours ago [-]
> Hardware wallets are not a solution to self-custody.
Look back as recently as last year and hardware wallets were held up as the recommended way to do self-custody all over.
Whenever I brought up the issue of losing coins due to hacks or bugs, I was told that hardware wallets had solved this problem.
odyssey7 13 hours ago [-]
People selling hardware wallets might pay good money to convince you of that. People not selling hardware wallets probably won’t pay for the reverse.
tenuousemphasis 18 hours ago [-]
There have been more hacks, bugs, and coins lost from software or custodial wallets than ever have and likely ever will be lost from hardware wallets.
0cf8612b2e1e 18 hours ago [-]
Do passkeys next.
JumpCrisscross 17 hours ago [-]
Passkeys don’t gate immutable financial transactions. (Pretty much everything you do in a bank’s website is reversible during the day to a few days out.)
Yizahi 16 hours ago [-]
Apparently in human societies "trust" is a feature and not a bug to be removed. Who knew, right? :)
nkrisc 2 days ago [-]
Then can you give an example of what you would consider a solution, whether hypothetical or real?
fps-hero 2 days ago [-]
Banks and payment providers (Visa Mastercard AMX) provide services beyond simply a store of wealth and a mechanism to transfer it.
Actually 2FA, hardware biometrics, behaviour based fraud prevention and personal confirmation of suspicious transactions. If you’re using credit they can refund fraudulent transactions, and there is the chargeback mechanism. This is probably banking system dependent, but in AUS there is a refund mechanism for mistaken/fraudulent traditional bank transactions.
BTC has effectively none of the safety net, and humans are fallible. We need the safety net. It’s the hugest barrier to adoption. Exchanges do a far better job of managing the risks than trusting your wealth to a hardware wallet.
miki123211 2 days ago [-]
In financial systems with a basis in law, no transaction is ever final. It doesn't matter what the protocol says or what the technology is capable of, if the judge says that the transaction must be reversed, you get it reversed, even if that means delivering cash in briefcases or something like that.
In systems with a basis in technology, final means final. If the North Koreans take your money, your money is taken.
> if the judge says that the transaction must be reversed, you get it reversed, even if that means delivering cash in briefcases or something like that
So if I pay cash for something, I can get it back if a judge orders the counterparty to do so.
Why is cryptocurrency not the same? Can I not go to a court and get an order, exactly the same?
Of course I may not know the counterparty's identity or they may be in a hostile jurisdiction, but how is that different to cash that has escaped my jurisdiction?
hnfong 3 hours ago [-]
You're exactly right. That is why you do not do business with an entity you do not trust outside your jurisdiction.
It's just that incidentally, "entity you do not trust outside your jurisdiction" also includes basically your average crypto peer.
ButlerianJihad 2 hours ago [-]
Which is exactly why I ceased divulging all my credentials to KeePassXC and friends. And why I remain skeptical about Yubikey.
AnthonyMouse 18 hours ago [-]
> In systems with a basis in technology, final means final. If the North Koreans take your money, your money is taken.
This seems obviously not true. If someone in New York steals your money then courts in New York can order them to give it back even if it's Bitcoin. If they don't comply then they get held in contempt until they do or the police seize their computer with the keys on it etc.
If the person who stole it is in North Korea then the courts with jurisdiction would be the ones in North Korea, which may not be to your advantage, but how is it any different from what happens after the money was transferred to a bank in North Korea? Or, for that matter, what happens if someone in North Korea has the stolen money deposited into a US account and then spends it before you get around to reversing the transaction?
The problem isn't what kind of technology you use, it's that someone can transfer stolen assets into a jurisdiction that won't help you get them back. Regardless of what payment system you use, they can get the same effect by using the stolen money to buy gold bullion or similar and have it shipped to them in their jurisdiction, and once it crosses the border they're not giving it back.
JumpCrisscross 17 hours ago [-]
> If the North Koreans take your money, your money is taken
If you wire your money to North Korea, forget about it for a week, and then ask a court to intervene you aren’t getting your funds back.
kasey_junk 17 hours ago [-]
Are there any American banks that will let you wire money to North Korea?
JumpCrisscross 17 hours ago [-]
No. But pretty much any American bank will let you wire to a new Chinese or Singaporean account that sweeps funds every evening to other jurisdiction.
kasey_junk 14 hours ago [-]
Ok but then you are dealing with criminals willing to run up against those governments.
That’s not an incremental change in risk over a crypto transaction.
JumpCrisscross 12 hours ago [-]
> but then you are dealing with criminals willing to run up against those governments
Sure...? If you get scammed you probably are. My point is immutable transactions aren't unique to crypto. They're just a lot more difficult to stumble into with real finance.
lrvick 2 days ago [-]
I have worked for and/or audited the majority of exchanges, that mostly white-label a much smaller number of players.
I have yet to see a single one, not one, that had a system of custody that did not allow any one of hundreds of people, most not even employees, to walk away with all of the funds.
There are no standards for security that apply to crypto custodians and the mostly fail to do the bare minimums.
If you use even a top ten custodian, operate under the assumption that the funds are in multi billion dollar plaintext wallets sitting on AWS servers the whole team has ssh access to from the same laptops they "npm install" random shit to all day.
Honestly if you do not feel confident custodying crypto yourself, you should probably not own any.
user43928 18 hours ago [-]
And if you do feel confident, you probably shouldn't own crypto either.
Even if you are not hacked, or otherwise lose access to the funds, they are not unlikely to become worthless simply due to the system with the stable coins collapsing.
The liquidity can easily disappear, much more so than with Fiat currency or other assets linked to real economies.
You cannot protect yourself from being scammed in that way, even if you do hold on to your keys.
lrvick 16 hours ago [-]
Good to hedge bets. The value of Fiat can go to zero at any time too. Especially when leadership is always talking about printing trillions of dollars to give every citizen checks.
user43928 7 hours ago [-]
That's like saying you're hedging against economic troubles by trading stock options on margin.
I mean crypto might seem like such a hedge, comparable to gold. But really it's a wealth redistribution scheme where already the current valuation depends somewhat on trusting exchanges that issue stable coins.
ameliaquining 2 days ago [-]
The safety net makes you less secure against the U.S. government, but more secure against everyone else. That's the right choice for almost all users, but I still think it's at least kind of good that people have a choice.
alerighi 5 hours ago [-]
Reason why I consider BTC to not have sense, it makes sense only compared to cash, and when you want cash? Illegal activity or tax evasion.
A person that doesn't have anything to hide is happy to leave it's money in a bank where, under EU legislation, it's guaranteed up to 100k euros per account (so you can have multiple accounts in multiple banks so you are safe), that is no matter if the bank goes bankrupt, the money is stolen, or whatever else you will have your money back.
I’m not saying they are perfect, but on aggregate they are better than hardware wallets. Legally they will be responsible if your money is lost. They are about as close as you can get to the type of legal assurances provided by a bank.
fps-hero 2 days ago [-]
Anacdote, I have a friend who is a locksmith. I needed his services one day, gave him a call, and it turned out his day job had evolved since I last talked to him 5 years ago.
Basically, he was now just a safe cracker. He is a a locksmith, but 100% of his full time hours are cracking safes. He didn’t even carry around the stuff in his van to repin a lock. He gave me mates rates but the shop had to do it.
This man was attending multiple callouts, per day, to crack into a safe. Because of, you guessed it, human fallibility.
In a city with with millions of people, basically a hundreds of people needed a single locksmiths service because they had locked themselves out of there own “personal store of wealth”.
I’ve heard zero such examples through traditional banking, with the exception of stolen cards.
eichin 16 hours ago [-]
... this sounds like the "use random password, discard it, always log in via the email-recovery path" approach, applied to the physical world :-)
maxbond 11 hours ago [-]
The poor man's magic link and the rich man's combination concierge.
18 hours ago [-]
2 days ago [-]
whywhywhywhy 2 days ago [-]
Use a device that’s mass produced enough it can’t be targeted e.g a MacBook, then keep it airgapped and don’t do normal computing on it.
Gigachad 2 days ago [-]
Hardware wallets are air-gapped. The issue here was a distributor got acquired and then snuck a chip in that could read the spi link between the microcontroller and the screen. The chip had its own cellular modem and could send the passphrase that was shown on the screen to the attackers.
wongarsu 2 days ago [-]
If you sell a device specifically for storing large amounts of liquid assets, that puts a huge target on that device. You are basically asking for supply chain attacks
An ordinary MacBook does not have that issue. If you are a high-value target, you can further decrease your risk profile by buying it from a random physical store, further preventing targeted attacks.
LoganDark 2 days ago [-]
Nobody said hardware wallets aren't air-gapped. They said take something normal and usual enough not to be an attractive target for bespoke crypto stealers, and then airgap that to make your wallet.
ameliaquining 2 days ago [-]
The post you're replying to is arguing that it wouldn't be feasible to do that with a MacBook (at least if you buy it off the shelf at Best Buy).
alwa 2 days ago [-]
Boy that was a slog, to dig deep enough through the slop to find the technical details…
In retrospect @gigachad’s summary is worth as much as both articles combined, but for the Clauded technical source (with pictures!) that Ledger’s Claude-release refers to:
https://www.tibane.net/research/ledger-nano-x-implant
throwawayfifo 18 hours ago [-]
>Hardware wallets are air-gapped.
The ones with hidden eSIMs aren't!
mianos 12 hours ago [-]
As dense as MacBooks are, it is nearly trivial to fit a spying device inside them, especially compared to small hardware wallets like Ledger Nanos. As secure as macOS is, once a device is inside the chassis, there are numerous ways to read data. USB serial is easily decodable, as are the many SPI, I2C, and other buses inside the machine.
Keyboard traffic is plain. Bluetooth access depends on where you are positioned. DVI is not hard to decode for capturing the entire screen. KVMs are so small now that one could easily be snuck in. Even though the motherboard is very compact, there is space above it and near the batteries.
teravor 11 hours ago [-]
by buying a mass produced generalist device (preferably from a randomly chosen vendor) and then restricting it to a specialized purpose you are effectively negating a targeted attack.
I always assumed the people buying those crypto gadgets were idiots.
also, if Apple falls to a supply chain attack like this where their laptops are backdoored crypto theft will be problem number #10.
QuadmasterXLII 2 days ago [-]
airgapped pre crypto devices are extra safe: break out the ti82! don’t buy a ti82 for this purpose, it has to be one you had in your closet. If a blog post describes how to code it in TiBasic then affiliate links a calculator in ebay, well…
If there was one, someone would write down the steps necessary and put them on the internet. But I have never seen a sound description of how to self-custody Bitcoin in a safe way.
The hardest part seems to not even be the one that currently creates all those problems - the hardware and software used. The hardest part is storing the key (for example a seed phrase). If anyone says they know a way to safely store Bitcoin, my first question is: How do you store the key?
skinfaxi 2 days ago [-]
Where do you store your bank password? Couldn't the same be used for a seed phrase?
rspeele 18 hours ago [-]
The sensitivity of my bank password is much lower than a seed phrase because most bank transactions can be reversed as long as I notice them in time and prove my identity to my bank.
With bitcoin nothing is reversible so every step of the process is a huge security risk where you can fall off a cliff and experience financial permadeath of "your" crypto, assuming a sufficiently motivated attacker.
remember it? Write it down somewhere hidden if you have to.
littlecranky67 2 days ago [-]
get a brand new, cheap laptop or machine (even a raspberry pi works) that you randomly pickup at the store (no delivery order). Install debian 13, install electrum, airgap the device, reboot and generate 1-of-2 your wallet keys.
The wipe the device, use any non-debian other linux (or BSD) to generated the 2-of-2 wallet key.
0cf8612b2e1e 18 hours ago [-]
Why would you ever connect it to the internet? Air gap forever. Physically rip out the radio, only load software by CD (ideally not through a USB interface).
notyourwork 2 days ago [-]
The existing financial system which provides protection to consumers. Crypto doesn’t solve the problem the general public assumes it does and hype has inflated its value dramatically.
pants2 2 days ago [-]
MPC or multi-sig is a pretty good solution, you can require a 2/3 sign off from different custody solutions (ie. a hardware, desktop, and mobile wallet)
akoboldfrying 2 days ago [-]
Yes, but this threat analysis also holds for laptops and phones.
What do you use to access your bank account online? I use my laptop, or my phone.
kasey_junk 2 days ago [-]
If your money is stolen from a bank account via fraud you have recourse to get it back, and it’s pretty straightforward to do in most cases.
SXX 2 days ago [-]
Very often this is not the case. Debit / credit cards payments are quite reversible, but once a person send $100,000 or even $10,000 to a scammer it can be quite hard to recover.
kasey_junk 2 days ago [-]
Caused by an account take over? This is letter of the law stuff and something bank (and other financial firms) employees receive specific training on. The customers loss is capped and their bank is on the hook.
For inter-bank transactions involving a scam that causes the customer to “voluntarily” send money it depends on the rail. But US ACH rules cover reversals due to fraud and have pretty substantial rules about it.
SXX 2 days ago [-]
All the countries have rules about it. Except if your credentials been compromised it can take weeks before you find out that money gone from your account.
Usually how it goes is if someone hacks your account or steals credit card info. You get refunded. If a scammer convinces you to willingly send the money, you’re out of luck.
iammrpayments 2 days ago [-]
The truth is that banks often have pretty bad security and customer service, but the risk of getting caught after stealing crypto is virtually zero when compared to scamming someone’s bank account balance.
nkrisc 2 days ago [-]
Because the scammers are instructing victims to use methods that are difficult or impossible to reverse, such as gift cards or cryptocurrency.
rwmj 2 days ago [-]
Don't buy gift cards and send them to random people would be a good rule to live by.
sfn42 2 days ago [-]
Yeah, "everyone" knows that. Except the world har an incredible amount of people who fall for these kinds of scams. And there are less obvious scams around.
I almost fell for a strange scam a while ago. A Steam user by the same name as one of my existing steam friends added me. I assumed it was his second account and accepted. A few days later, he messages me, asking me to participate in a DOTA2 tournament. I had previously played DOTA2 with this person, he spoke to me in our shared native language which is not English and everything seemed in order. I said I haven't played DOTA2 in years so I'm beyond rusty, he said I don't have to play, they just need me to register so they have a full team for the signups and then they'll find someone else to play before the tournament starts. Sent me a link to a website requiring a signup and I can't remember what it was now but there was something about the signup that irked me. Maybe it was just creating a account, maybe it required a credit card or something I can't remember but I ended up looking at my steam friends list and noticed both the accounts were online. So I sent a message to the other account asking if this is them, he said no and then I noticed the same scammer had added another mutual friend so I messaged them too warning them about it.
That's the closest I've been to getting scammed that I can recall. I'm not sure what the scammer would gain from my signing up but I'm sure they had some kind of profit angle.
Pannoniae 18 hours ago [-]
its a fake steam login! theyll phish you for your login and login into your account, messaging your friends...
sfn42 7 hours ago [-]
Oh yeah that might be the iffy thing that made me stop the signups, it probably required a steam login.
nkrisc 2 days ago [-]
And yet people still do it.
chinathrow 2 days ago [-]
But freedom.
Seriously, that's why we have banks, still.
iammrpayments 2 days ago [-]
Good luck trying send money abroad or dealing with a sudden unexplained account shutdown.
chinathrow 2 days ago [-]
I have had no problem sending or receiving money abroad, thank you.
theplumber 2 days ago [-]
yet
Dah00n 2 days ago [-]
We are not all living in America, yet.
theplumber 2 days ago [-]
Well as far as I know banks in Europe (UK included) already ask you a lot of questions when you withdraw your money(I.e cash) or even when you wire various amounts( unless you have a good bank manager). My bank manager in Europe just told me straight that I don’t need to explain him anything but he has to call me anyway because of the bank policy(I.e to tick the boxes).
Next is a hold on your suspicious transaction, request additional documents for your own money, basically a lot of AML and KYC before you can use what’s yours.
I understand the reason why they do this but it feels to me you are no longer in control of your money/property and somehow they fail to catch people loading billions from shady sources so I would rather not keep my money in a bank (at least not a retail bank) if I had a sensible option.
Most people don’t care about this until they get trapped just like most people are
/were OK with Paypal and other junk services.
what 12 hours ago [-]
It sounds like your withdrawals/transfers are actually suspicious. You don’t give any details on amounts or frequency or anything else. But you are certainly doing something outside the normal.
iammrpayments 11 hours ago [-]
Go to youtube and type “paypal froze my account”
ameliaquining 2 days ago [-]
That's not really relevant; the U.S. government has enough leverage over the global (fiat) financial system that they can cause any account in any First World country to be shut down.
The actual reason to discount this is that account shutdowns are flashy rare events that reliably summon HN outrage, and so the kind of person who posts here overweights how likely they are, at least for people not on the margins of society. (If that weren't the case, the system wouldn't work and normal people wouldn't use it.)
artisinal 17 hours ago [-]
About one in five international money transfers fail for me. EU to EU countries. SEPA isn’t bulletproof. Outside office hours I have an even higher failure rate.
Ironically the failure rate when I use the American Visa or MasterCard is maybe 5%.
redox99 16 hours ago [-]
I never understood why people considered specialized hardware more secure than general purpose hardware.
A hardware wallet is way way way more likely to be backdoored[1] than an off the shelve Intel or AMD CPU.
[1] by people wanting to steal your crypto (unlike the NSA or Intel)
fishfasell 16 hours ago [-]
I believe it was Ledger that said if you can hack their wallet you will become their CSO, looks like they owe someone a job!
mrheosuper 7 hours ago [-]
With how much money they(the hacker) made, the package they have to offer gonna be insane.
cavoirom 8 hours ago [-]
may be they already had someone without them knowing.
toss1 14 hours ago [-]
Yup, if they are in business long enough to onboard the hire...
jmyeet 11 hours ago [-]
Well this is a tradeoff. In theory a specialized device is more robust and has a smaller attack surface. Consider something running Linux with some libc and a whole host of other shared libs. Sure they have some robustness because they're so widely used but that's a massive attack surface. There is a solid argument for dedicated hardware.
Also, general purpose hardware doesn't really prevent this as much as you might like. You're still subject to supply chain attacks even if Linux (etc) are quite secure. Look at supply chain attacks we've had in the npm and other ecosystems.
cavoirom 8 hours ago [-]
it's about signal to noise ratio. if you spend money for specialized device, it's a good chance you have more money in your wallet.
csomar 8 hours ago [-]
My current pet-peeve with the top providers is that they all refuse a fully-airgapped solution. You have all these widgets and gadgets like it's a toy when you are planning to hold millions in there. Their apps are also a joke and polymarket-like these days.
At this point, the best is a 2-multi-sig solution where one is some hardware wallet and the second is an iPhone app wallet where the seed is stored digitally only. So even if your offline seed is compromised, you are still covered.
shingoshoji 17 hours ago [-]
These guys had the audacity to slap a label on their box:
"See how there's no security sticker? That's because our hardware is soooo secure"
Everyone at ledger has made absolute fools out of themselves.
chinathrow 2 days ago [-]
Exhibit #9387434 for reasons to stay out of crypto.
The other big wallet hardware maker, Trezor, already responded they will majorly cut back their authorized suppliers network.
They want to be certain they have the resources to properly personally verify the operations and trustworthiness of every authorized distributor that they’re vouching for.
Man, I wish there were some pictures. I didn’t even know that there are LTE modems that small.
userbinator 11 hours ago [-]
Look at the size of the board in something like a late-model iPhone. The biggest part of a regular smartphone is the battery. The modem and RFIC along with supporting discretes are absolutely tiny. They've been making wrist-sized watch-phones for many years.
There are pictures online. And for an unexplainable reason it is the person behind the biggest Bitcoin exchange SNAFU of all times (where hackers stole something like 800 000 Bitcoins), Mark Karpeles of "Mt. Gox" (who did jail time btw), who was the first to post them:
Apparently the hacker did remove the battery and replace it with a smaller one, leaving enough room for the tiny eSIM/LTE modem / OCR chip that did recognition of the secret on screen.
It's a great hack. I wonder why they didn't just spin a new board and transplant the secure-enclave chip to it.
I guess the sweatshop workers would then need to be trained in reballing BGAs if they did that.
sdcfgy 18 hours ago [-]
I want to read that but my slop detector went off. Instant disinterest.
Give me a shitty html4 page with the text ffs.
arm32 18 hours ago [-]
It's definitely AI-written, annoying as fuck god damn it, but the photos are good and the descriptions of the boards, are at least at cursory glance, pretty accurate.
tl;dr Implant is just a little cell phone that does OCR of the hardware wallet's screen during setup to steal the recovery phrases. The implant's design has improved notably three different times before landing on a pretty darn sleek spot-welded overlay that is laminated flat onto the host.
mrheosuper 7 hours ago [-]
Does it do OCR. The screen is very low res(128x64 monochrome iirc), so 2KB for entire buffer. I doubt there is OCR library that use less RAM than that. Better to just send the entire framebuffer and not have to worry about false negative.
mzajc 13 hours ago [-]
Wouldn't using transparent/translucent plastic for the casing make this attack much harder (assuming users verified the insides against official photos)? My bank's hardware tokens used to have that, but new ones are opaque like this wallet. I wonder why.
officeplant 2 hours ago [-]
As dumb as I think crypto is at least it provides these popcorn worthy moments of fraud.
Neywiny 2 days ago [-]
My gut reaction is that a hardware implant would be too costly so there's no way they'd actually do that but I guess when you can steal $92M, anything is possible. They could even fab an esoteric chip and still make a profit.
dannyw 2 days ago [-]
Why do you think it's too costly? It's well known that there are divisions in DPRK that are focused on generating $ through crypto hacks and compromises.
We're dealing with reasonably sophisticated state actors here in this dark forest; not script kiddies.
Cheap $5 PCB + programmable small FPGA is a very viable route too for hardware implants; but even a microcontroller / ESP32/etc will probably do.
FabHK 12 hours ago [-]
DPRK makes about a third to half of their foreign exchange income from crypto hacks. It's significant.
thinkmassive 2 days ago [-]
> A technical account published by Tibane Labs described an arrangement involving a microcontroller, cellular communication hardware and connections to the screen’s internal data lines.
Cellular communications hardware seems very sophisticated and expensive compared to a simple microcontroller.
tenuousemphasis 18 hours ago [-]
It's not though, it's a pretty standard component.
Neywiny 2 days ago [-]
Other commentator covered it a bit but BOM cost is a negligible percentage
They did, in fact, appear to mass-manufacture a custom-built flat flex implant with cellular (LTE-M!), eSIM, and everything that hid right inside the Ledger, sniffing the SPI reads to the display to read the recovery phrases it pukes out and send 'em over cellular to the ringleader.
It's an EXTREMELY well built implant. I'm impressed. Multiple revisions, even.
The money's too hot to not build shit like this and slip it into the stream. Even a few thousand in R&D netting a six figure ROI is worth it, getting millions is just the icing.
bluescrn 16 hours ago [-]
Custom flex PCBs designed to line up precisely on top of an existing PCB seems to be a fairly standard technique for games console mod chips (particularly Nintendo Switch) these days.
But yeah, putting a cellular modem and eSIM on there is certainly taking it to the next level
Shank 2 days ago [-]
PCBWay will make anything you send them for reasonable pricing. Custom boards etc are not at all hard to manufacture, and for the amount of money you can get, of course you can team up with someone. I think the most people overestimate the cost of bespoke PCB creation.
If it makes no sense economically there's a good chance (in general) that it was an intelligence agency of a superpower
danxbuild 3 hours ago [-]
getting more into just storing things on paper, and occasionally going digital, recently started working on making an open source secret storage/keeper, to just use by myself to store things when i need to access it on the go, built it with libsodium and argon2id. now i know it doesnt protect me against hardware things, but at least i know where i am storing my things
asdfman123 19 hours ago [-]
I hope they refer the exploit as "legerdemain"
rixed 10 hours ago [-]
I'm not into bitcoins nor physical wallets, but I'm guessing those are not supposed to attach any gsm network ever.
Isn't that trivial to detect, even without opening a device, that something inside is attaching the gsm network? Those are pretty strong signals in a well defined tiny range of frequency, after all.
(Not so long ago you could hear them talk with the towers through regular home speakers.)
srdjanr 8 hours ago [-]
You could only realistically detect this in a lab.
You need to actively listen at multiple frequencies at the same time (gsm/lte/5g have many different bands, + wifi/bt at 2.4/5/6 ghz and their bands). And you need to remove interference from all other devices to conclude that signal is coming from ledger (so any home isn't an option).
On top of that, you need to be listening at the exact time it exfiltrates data (it might intentionally wait for some time after using device), and you need to have the compromised device (which the hardest part here - you could test 100s of devices and not find anything).
So I think this could only be caught with a large scale, recurring lab testing, far from "trivial to detect".
jubilanti 9 hours ago [-]
It doesn't need to connect to or even turn on the eSIM until you already entered your key and code, by then it is too late. Unlike voice, it just needs a microsecond pulse to send the data. With all the wireless interference, you'd need a controlled setup too.
mmahemoff 13 hours ago [-]
“Not your wallet, not your coins” is usually taken to imply “Your wallet, your coins”, catchy marketing but a logical fallacy. This incident demonstrates as much.
basilikum 12 hours ago [-]
It's "not your keys, not your coins". And if someone steals your keys they also steal your coins.
hector_vasquez 18 hours ago [-]
I wonder the lengths smartphone vendors are going to prevent this kind of attack. I cannot imagine it is easy to completely validate hardware in such an elaborate supply chain. I shudder to think about the attack surface in something like a modern car.
slim 17 hours ago [-]
The attack is profitable because it's targeted. Every one of those devices contains crypto. Which is not the case for mobile phones.
tenuousemphasis 18 hours ago [-]
It seems unlikely that smartphones would be targeted for such an attack because almost nobody stores large amounts of crypto on their smartphone. Those that do will likely get hacked more traditionally.
stingraycharles 1 days ago [-]
Reminds me of that time when state actors wanted to spread the Stuxnet worm into an air gapped nucleair facility in Iran, and basically hijacked the whole USB supply chain and put the worm in there.
When enough resources / money is involved, these things are to be expected.
karel-3d 1 days ago [-]
Not your factory, distributor, warehouses, fulfillment centers and entire supply chain, not your coins.
olalonde 2 days ago [-]
I wonder if a epoxy/resin potting would solve this sort of attack. Or active tamper response that fries the board if someone tampers with the case.
swinglock 18 hours ago [-]
It would make the tampering more expensive, but not too expensive given the 100 million dollar reward, while also making inspection of the device practically impossible for users.
If you can't get to the insides without breaking it, the only devices verified to likely be safe would be unusable too, so the product would in practice be even more unsafe.
If the user first inspects it and then glue it on their own, that would work, but it wouldn't solve this problem. Evil maid attack is something else and obviously harder at scale.
15 hours ago [-]
olalonde 14 hours ago [-]
[dead]
mrheosuper 11 hours ago [-]
a lot of things can be done. Hardware epoxy, or anti-tamper switch that auto brick Firmware. There is hardware integrity check. Check the impedance of each pin/gpio, if it's fall out of expected value, brick it.
chinathrow 1 days ago [-]
I wonder why they only managed to steal 100M so far. Like with the order of effort needed, why haven't they waited for the really big fish to unlock their ledger?
agos 1 days ago [-]
because the longer they wait, the higher the chance of being discovered before they're able to steal anything. I'm sure there's some game theory about this
woadwarrior01 2 days ago [-]
Ledger has had three data leak incidents: once in 2020, a software supply chain attack in 2023 and another data leak in 2026. This latest one is the fourth.
Even if one were to ignore the latest incident, which arguably isn't their fault, the first three incidents make up a pretty bad security track record.
How a French (EU based) company is still in business after all of this, is an indicator of selective enforcement of EU privacy laws (GDPR, etc).
Slartie 1 days ago [-]
> the latest incident, which arguably isn't their fault
I'd not release them soo easily from their share of responsibility. Tamper-proof hardware is a thing, electronic funds transfer terminals for example already implement ways to detect or prevent physical intrusion into safety-relevant parts of the device. Would probably have cost a few cents in manufacturing to add countermeasures to physical modification into the Ledgers. The fact that there is not even the slightest attempt at securing the device against this kind of attacks is entirely on the manufacturer.
> How a French (EU based) company is still in business after all of this, is an indicator of selective enforcement of EU privacy laws (GDPR, etc).
Surely you can name a dozen of US companies that have been driven out of business by enforcement of EU privacy laws. But I'd be glad if you'd at least name a single one!
2 days ago [-]
17 hours ago [-]
Freeaqingme 2 days ago [-]
I'm guessing the best way to go about self custody these days is to have a multi sig wallet, based on multiple hardware wallets from different vendors.
scrlk 2 days ago [-]
I wouldn't trust any of the hardware wallet vendors. Pretty much all of them have had customer data leaks, resulting in wrench attacks.
You're better off just having a dedicated laptop for crypto transactions.
wongarsu 2 days ago [-]
Hardware wallets have a huge target on their back. They are great for convenience, but once you are using multiple for muli-sig you can have more security with less hassle with an airgapped old laptop or a hand-stamped piece of metal you keep in a safe
ForHackernews 18 hours ago [-]
Don't forget to bury it under a cement birdbath in your back yard!
sunshine-o 2 days ago [-]
What always surprised me is there aren't many implementations of multisig for EVM based chains.
Actually the only one I know is the Gnosis Safe. Talk about creating a huge risk if it would have a problem.
woailuo 5 hours ago [-]
if the chip was put in during the supply chain,is buying from the official website really safe? you always need to trust someone in chain
rishikeshs 6 hours ago [-]
So Ledger does not have a tamper proof seal or something?
new23d 6 hours ago [-]
They should publish the precise weight of these things.
eichin 15 hours ago [-]
One of the educational parts of this is that the phrase "supply chain attack" evokes image of Mission Impossible nonsense, whereas this was "just buy the reseller"...
wildzzz 1 days ago [-]
Makes the claim from BI that Supermicro had malicious hardware implants a little more believable, eh?
duskwuff 17 hours ago [-]
Not really. We have physical proof of the compromised Ledger devices; no one has ever presented any specific evidence that Supermicro hardware was similarly compromised.
anvuong 18 hours ago [-]
One would've thought that the display data bus would be encrypted/scrambled in such a device, or at least packaged in a way that makes this kind of attack destructive to the circuit board (chip-on-glass).
Amateur hour all around.
BatchJob 12 hours ago [-]
Well add "Ledger" to the pile of crypto companies that are finished.
Crypto is getting scary these days.
curiousObject 1 days ago [-]
Here’s a new market for $500 Faraday Cages, if any HN readers are interested in selling that
greyface- 23 hours ago [-]
How did the attackers acquire valid, active Vodafone eSIMs without doxxing themselves?
UPD: NL, just like some other few countries in EU, doesn't require mandatory identification for SIM card purchases and activation
postalcoder 2 days ago [-]
What a f-ing nightmare. It's stuff like this where I start to understand Apple's stance on right to repair. How do you maintain hardware security without strict provenance over every component in your device?
ragebol 19 hours ago [-]
Even if you have perfect provenance over every component you put in, the moment it leaves your factory to be shipped to customers, it can be tampered with.
Even if you would hand it from the factory straight to a customer that comes physically to your factory to pick it up, then you would still require some sort of ID to know that that person is in fact the customer I suppose. Which removes some of the advantages of cryptocurrencies
modeless 18 hours ago [-]
Why are these things not potted in epoxy at the factory? Not that it would entirely prevent this attack but it could make it a lot harder to execute and hide.
elbrownos 13 hours ago [-]
Ledger screens die. I had to replace my screen a few months ago. Not use-related either, just time.
bushbaba 15 hours ago [-]
This is why open source wins for security. The more able you are to audit and decentralize the better.
MadrasTh0rn 15 hours ago [-]
Hardware compromises to steal crypto? Hollywood movie anyone?
lucasRW 4 hours ago [-]
Curious on attribution. DPRK ?
ArtRichards 1 days ago [-]
"Because whoever can read the screen wins." This is a bit surprising from Heise.de?
tom_ 23 hours ago [-]
At the bottom:
> This article was originally published in German. It was translated with technical assistance and editorially reviewed before publication.
Presumably "technical assistance" covers just about everything.
smnplk 15 hours ago [-]
What is amazing to me is that crypto is still around.
bjackson2718 15 hours ago [-]
Many of us don't want to be subjugated to inflation. Sovereignty isn't for everyone.
maidaman 1 days ago [-]
Back to paper wallets I guess.
lxgr 1 days ago [-]
You should have a paper backup of your hardware wallet anyway. The point of the wallet is to perform cryptographic calculations you’ll probably rather not do in your head.
alchemist1e9 1 days ago [-]
This was stealing the seed phrases as they were being displayed so the user could make the paper backup you suggest and in the process have all their current and future coins stolen.
lxgr 1 days ago [-]
Yes, somehow the hardware wallet does need to import or export the seed phrase in some form.
buckle8017 2 days ago [-]
The tweet doesn't say that ledger installed the chip.
This is some D grade trash writing.
jmyeet 10 hours ago [-]
This is a cool attack from a technical POV, no doubt.
But what I want to talk about is trust. The big selling point of crypto has always been that fiat currencies, governments and the banking system can't be trusted. Your money can be seized. You may be subject to capital controls. Also, you're subject to chargebacks and so forth.
So crypto hasn't really eliminated the trust issue. It's just moved it. Instead of governments and the financial system having to be trusted, you're trusting far less accountable hardware vendors who might be completely trustworthy as far as you and they know but they can still be subject to supply chain attacks. An extreme (non-crypto) example of this is the Lebanon pager operation.
I've always maintained the crypto is largely solving non-problems and it treats things in the financial system as bugs when they're in fact features, such as reversible transactions.
Crypto transactions has significant limitations, such as everything needs to be on the blockchain (ie the so-called Oracle Problem), which is the whole reason we have stablecoins, etc.
People with this hardware wallet were largely very sophisticated users and even they couldn't successfully and securely manage a wallet. What hopes does the average Joe have?
The more time goes on, the more I'm convinced that crypto is a solution looking for a problem.
codedokode 1 days ago [-]
Looks like government's work to me. Why would someone risk a prison for this.
whywhywhywhy 2 days ago [-]
Can see why hardware wallets seemed a good idea at the time but history has shown this is a terrible way to self custody. Compromised devices aside, the KYC data leaks have put people in danger too.
jmakov 2 days ago [-]
So HW passkeys in general can also be compromised?
teiferer 7 hours ago [-]
> The crypto wallet maker also noted that it was working with authorities to identify the perpetrator and bring them to justice.
Is it nowadays a workable defense to say that you had a bunch of AI agents in a sandbox doing experiments and they somehow escaped and you will totally make sure this does not happen again?
csomar 18 hours ago [-]
I bought from this very reseller in the last 90 days and I just opened my Stax with a knife to find out it was implanted. It is a very good job too, if I didn't watch the Youtube video, I would think it's part of the original Ledger hardware.
artisinal 17 hours ago [-]
What made you purchase the ledger from a third party and not directly from ledger itself?
csomar 17 hours ago [-]
It's the official Ledger reseller in that country.
artisinal 17 hours ago [-]
But why not order directly with ledger? They ship all over the world.
csomar 17 hours ago [-]
My thinking was it is safer to buy from an authorized reseller than just shipping it. Many people get to access your mail in transit. Granted the devices come in mail regardless for anyone but I thought maybe the authorized thing had some more due diligence or something.
artisinal 17 hours ago [-]
That is reasonable. I hope you didn't lose your wallet.
csomar 17 hours ago [-]
Nope. Though I did leave a few hundreds just to see if it was compromised after all.
dboreham 13 hours ago [-]
On a whim I read TFA. What it reported as happening isn't quite what some of the comments here represent. Now, I'm sure there are all kinds of vulnerabilities in Ledger, but this attack seems to be a quite crude supply chain attack mounted on some part of Ledger's retail distribution network. It's actually not even clear that's the case because it talks about these being sold for "half the usual price" so they may have been gray market or second hand. Anyway, this is like buying a Yubikey from Amazon or eBay. You don't do that because Yubico sells direct, which is how you should buy them, to avoid obvious supply chain attacks.
There are other elements of the article that are confused: an "eSIM" is SOFTWARE, not a "tiny chip". Perhaps they mean a "realSIM"?? The SIM is of course only needed to authenticate to a cell network. The article mentions an LTE module. So the e/not-e-SIM aspect seems a little by the by. The main meat of the trojan was a regular ARM SoC.
tantalor 1 days ago [-]
It's a skimmer?
lsofzz 6 hours ago [-]
yes sorta
mrheosuper 11 hours ago [-]
Just tech bro doing hardware security. Everyone in this field knowing Anti-tamper measurement is one the very basic thing to do.
tamrix 13 hours ago [-]
Be careful. Some data from resellers has been hacked or leaked and scammers will contact you saying your device is compromised to run software or other methods to get your keys. This is a known scam from previous ledger software exploits. They will give you cves and won't have any typically scammers accent.
TacticalCoder 1 days ago [-]
I already commented the other day on this exploit but really it's fascinating.
I don't care about cryptocurrencies but I've always been fascinated by the cryptography behind it. I've also dabbled with hardware wallets for non-cryptocurrencies stuff: like U2F auth.
The idea of a master secret that is behind a secure element which I control and which I can duplicate is amazing to me (as opposed to, say, "your" passkeys which Google/Microsoft/Apple can basically backup and transfer to other devices for you).
But really to me in the cryptocurrencies world people have been sold the lie that a hardware wallet was secure: it's not. It could be tampered with (as happened in this hack, where an additional rogue chip reading the screen and then sending it using an eSIM steals the secret) but it can also contain a bug (like the recent Coldcard exploit where Coldcard hardware wallets fell back on a RNG with only 32 bits of entropy and some dark-hat hacker cracked those and stole Bitcoins) and, most of all, the vendor of the hardware wallet itself can do nasty attacks (like "kleptography").
From the very start everybody in the ecosystem should have pushed of "n-of-n" schemes (say even just 2-of-2), where one secret goes on a hardware wallet from one vendor and the other secret goes on a hardware wallet from another vendor.
For years and years the tune has been: "PCs cannot be trusted, use a hardware wallet" but it mislead people.
PCs indeed cannot be trusted but unsuspecting users should have learned how to use 2-of-2 or 3-of-3 schemes, to become immune from hacks affecting one hardware wallet vendor.
The typical, non-sensical, response to this is the idiotic: "but if you have two secrets, if you lose one of them you lose everything". It's totally idiotic for people basically save a list of 24 words (the "seed", which is the master secret). Well, guess what: instead of saving a list of 24 words, you save a list of 48 words. Exact same thing, just twice longer.
That's my take: the entire "your coins will be safe if you use a hardware wallet" was misguided.
You might be interested by the Tillltis TKey - it's an open-source open-hardware programmable-by-the-user secure element.
thinkmassive 1 days ago [-]
m-of-n provides increased security AND redundancy.
2-of-3 allows loss of one key, 3-of-5 allows loss of two keys, etc
The cost is increased complexity, but the alternative is potentially losing everything due to a single mistake. So far people seem to overweigh the complexity of multisig, and to overestimate their understanding of using a single signing device.
charcircuit 18 hours ago [-]
Why would they put all this effort in protecting the key within the chip and then go ahead and leak it via the screen?
dauertewigkeit 2 days ago [-]
Funny how all the rules of capitalism break down as you approach really big sums of money.
pjc50 2 days ago [-]
The #1 rule that you keep what you can get away with just seems to apply a lot harder. See also the Abramovich/Deloitte story on HN today.
brcmthrowaway 19 hours ago [-]
Couldn't they trace the thief through the eSIM?
Why are theee no legal repurcussions to this?
jacquesm 16 hours ago [-]
Possibly, there is a lot of KYC involved in setting up an eSIM virtual provider but the party that ordered the eSIMs may not be in the know, and the attacker may have obfuscated their credentials or used high quality fakes.
csomar 8 hours ago [-]
Conveniently, there is no KYC in acquiring a data-only eSIM. KYC is only enforced for the number which is not needed here.
knorker 1 days ago [-]
If you lie down with dogs, you will get up with fleas.
Dogs = cryptocurrencies. Fleas = scammed.
JKCalhoun 1 days ago [-]
Yep. Crypto is more clever than I am—and there are scammers in the field equally so.
(My hardware wallet is made of pleather and holds paper bills.)
jaekwon 23 hours ago [-]
your fiat goes brrrrr
knorker 18 hours ago [-]
It's been going very well, yes thanks.
Much better than the average crypto gambler.
The cash has been acting as a medium of exchange (something the cryptocurrency industry has given up on, at this point), which is its job, and my wealth is in capital. And capital is what the world runs on. And it's done really well.
astverskoy 2 days ago [-]
Crypto is a gift to scammers: billions stolen, victims left with little recourse, and no effective government oversight.
cindyllm 2 days ago [-]
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dgellow 2 days ago [-]
And yet on this exact website people critical of the industry were ridiculed with the exact same rhetoric adopted by the AI industry. It was touted by so many as inevitable, and how we will all be left behind if we don’t join the cult
brokensegue 2 days ago [-]
I think hn was generally more skeptical of crypto then AI
dgellow 2 days ago [-]
It really depends the year, but yes, overall I think that’s correct, a majority rejected the crypto bull narrative. While also a significant number of people were pushing it. the same money behind the crypto push has been behind the AI push. And the same peer pressure arguments are used
shadowgovt 18 hours ago [-]
It's always fascinating to me to poke my head into the crypto ecosystem because so many problems people are encountering in it are just... solved in fiat-currency ecosystems.
Nothing like the monopoly on violence to severely discourage bad actors from executing something like this.
lsofzz 6 hours ago [-]
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AnaMaria09 16 hours ago [-]
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elais-dev 13 hours ago [-]
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sehw 10 hours ago [-]
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djohnston 1 days ago [-]
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InsidiousWombat 1 days ago [-]
finally, good use for eSIMs /s
But damn, it's hard problem to fix. Put it in epoxy and while tampering is harder (not impossible! also can just replace whole module), you can't verify it
wartywhoa23 2 days ago [-]
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tokai 1 days ago [-]
+15 years later and it still doesn't do anything but provide idiots a way to lose their money. It really is impressive.
TheBozzCL 17 hours ago [-]
TBH, this just sounds to me like the crypto industry is discovering, yet again, why the banking and credit card industry have all this red tape and supply chain security.
Like sure, they're not fully immune... But at least I can call my bank and show them that I didn't suddenly fly from New Mexico to Florida to buy $200 in gift cards from a gas station in the middle of nowhere.
Crypto MUST deal with fraud and hacking if they want to become reliable. At that point, they'll just become another bank with a casino attached.
iammrpayments 11 hours ago [-]
Most banks in the US still use SMS password reset.
PNC is so bad they even have “secret question” password reset, last time I saw it, e.g. “what’s is the name of your cousin”
thot_experiment 19 hours ago [-]
Amazing, at least we have hackers stepping up to do the work the government refuses to.
Cytobit 2 days ago [-]
What is the use case of a hardware cryptocurrency wallet besides trapping bitcoins in the Shadow Realm?
numpad0 2 days ago [-]
Like any HSMs, to put private keys in it and to let things be signed with it.
mitxela 2 days ago [-]
Making sure malware on your PC can't steal your private keys.
Oh-Kay_Labs 1 days ago [-]
Oh-Kay_Labs have said it for years. Not only hackers and thieves go for them, but also kidnappers and robbers. If anyone knows you have one, and things could be much worse. Use paper-wallets, old phones and encrypted USBs instead.
arccy 1 days ago [-]
use leather wallets and paper cash...
KetoManx64 1 days ago [-]
Government currencies deflates at 15% a year, Bitcoin doesn't.
etchalon 18 hours ago [-]
Bitcoin has lost 25% of it's value in the last year.
KetoManx64 11 hours ago [-]
Bitcoin has gained 10,000% since its invention... The US dollar is worth 3% of what it was 100 years ago, I'm sure you're smart enough to do the math.
arccy 4 hours ago [-]
The paper US dollar bill has gained 150,000% since its invention.
I'm sure you're smart enough to do the math.
Odd, I couldn't seem to buy $10 worth of pieces of that dollar bill, it seems like it's non-divisible. I'll have to just keep buying $10 worth of bitcoin on a daily basis instead.
akimbostrawman 1 days ago [-]
>Use paper-wallets, old phones and encrypted USBs instead.
None of these prevent thieves or anybody from knowing you have one worth stealing. The actual solution is to not use fundamentally broken transparent crypto like BTC that broadcasts to the whole world your exact funds and ties them to your identity on every transaction. With monero your funds could be 0,10 or 10 billion and that is nobody's business.
expedition32 1 days ago [-]
Or just open a bank account like a normal person. But I suppose that requires deprogramming yourself out of the crypto cult.
theturtletalks 17 hours ago [-]
I can guarantee that if this was open-source, someone or some system would’ve picked it up. I’m still amazed that one guy picked up the XZ Utils backdoor because it slowed down after an update.
birdsongs 1 days ago [-]
Garbage website that doesn't allow me to reject tracking cookies without paying.
> Data processing by advertising providers including personalised advertising with profiling
> Consent [required for free use]
jocoda 1 days ago [-]
Just delete the cookies after if you absolutely must go to the site.
cowlevel 1 days ago [-]
Most websites do this, they just don't give you the option.
hn_submit 1 days ago [-]
LOL why would anyone want a hardware wallet when you can just store your Bitcoins on your own encrypted hard disk or USB stick? Bitcoin is merely a file.
These people are being suckered into a false sense of security with hardware cryptowallets. I mean, it would be very tempting to sell a hardware wallet with a backdoor inside of it to steal everyone's cryptocurrency, wouldn't it?
tredre3 16 hours ago [-]
You can use FDE all you want but you're still vulnerable to that file being stolen. Do you install programs from outside your package manager? Do you personally verify and compile everything? Do you pirate stuff? Use npm? Have an AI agent? Do you fully trust the browser sandbox? Click on email attachments? Even if you are Better Than Most, judging by the amount of youtubers that get hacked through stolen cookies, it's clear to me that even above-average people are susceptible to having files stolen.
Keeping your wallet file on a USB stick (or encrypting it) merely reduces the window of time an attacker can get the information. The attacker with local access could simply replace your wallet software. Or make use of a keylogger, screen capture, memory capture, etc.
In that context a dedicated device is the safer approach, and a hardware key is a minimalist device to do that whilst also being less inconvenient than an airgapped dedicated crypto laptop.
x1watt 17 hours ago [-]
This whole operation smells Israeli from the beginning to the end. First are these USB ledgers with modified hardware (guess who likes to do that on pagers and similar), then this happens in Germany, the country that never says "no" to the same specific group of people and finally they try exfiltrate the stolen funds with the favorite "private" coin of the same group of people, which in end is (again) proven to NOT be private at all.https://x.com/YFarmX/status/2108918564015006200
HN will never permit to look into the origin of this criminal action and normies will not even put that possibility on the table because they've been programmed against it. Let's play a game, this is a serious criminal act. I bet this will be quickly forgoten in about 3 weeks without anyone in Germany pointing fingers to the guilty party.
verteu 17 hours ago [-]
The crypto-theft angle seems more typical of China/NK/Russia to me. (China has some history of hardware supply-chain attacks). But without evidence we're simply speculating.
Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
We're talking here about a tiny eSIM implant and a little CPU doing OCR on the fonts appearing on the hardware wallet's screen to read the secrets during set up. So the secure element ain't tampered with.
Not long ago the Coldcard hardware wallet had an issue where it'd fallback to a 32-bit only RNG that could be cracked and so many people got their coins stolen.
Now it's Ledger that sees tampered devices all around the world (in Asia for sure but now there are reports about reseller in the EU selling backdoored/eSIM'ed devices).
For people who own Bitcoin at this point one of the only thing kinda sensible to do is to use multisig schemes, like 2-of-2 or 3-of-3 multisig, where your split the secret over two or three different hardware wallet brands (meaning being able to sign a 2-of-2 wallets requires hardware wallets from two different vendors).
When Ledger hardware wallets came out and people said that seed (the list of words) could be intercepted and relayed by a channel bypassing the computer (here by using an eSIM), people would post explaining that people were nuts if they thought such an attack could be pulled off.
Yet here we are.
And Ledger is responsible for very poor security practices: for example it's impossible to use a Ledger hardware wallet in a fully airgapped/offline way. For you're forced to not only upgrade the firmware but also install the Bitcoin "ledger app" (or whatever that is called) after you entered your seed into the device.
Which is complete and total amateur hour.
In addition to that Ledger offers a service to "backup your seed": what could possibly go wrong with that uh?
I'm betting that we'll soon hear about hardware wallets getting drained due to the seed being exfiltrated through "randomness" in how transactions are built/signed (aka "kleptography").
And it's not just representative about people in the cryptocurrencies ecosystem: people simply don't understand computer security and don't understand the potential attacks nor the length at which attackers are willing to go to steal data/funds/ruin other people's lives.
At this point we've heard about chips' plans being modified before the chips are even built (only to lower the entropy of RNGs) [unrelated to cryptocurrencies btw], a worldwide backdoor attempt in SSH, eSIM sending secrets from hardware wallets with tiny attack surfaces.
You're not anywhere near paranoid enough.
In some ways this is kinda encouraging, because it means that even in cases where society collapses and the government disappears, there are really only two fundamental technologies needed to reboot everything: money and contracts.
The incentives lead us toward the classic "Yes, the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders." scenario.
https://www.insidehook.com/culture/story-tom-toro-new-yorker...
Cryptocurrencies have the advantage that they can be spent worldwide, instantaneously, with little friction, while most commodities require that you be physically present to exchange them. They're also significantly easier to store and more resistant to garden-variety theft, as long as they're secured by passphrases. But they exist in the uncanny valley of requiring electricity and Internet. It is fairly unlikely that the government collapses and yet you still retain always-on electricity and Internet. What will you use to pay the electric company, and how do you enforce the contract that they keep providing you power?
There's perhaps an interesting role for a digital cryptocurrency that does not require always-on connectivity, eg. something that can be carried over SneakerNet for local transactions, and then automatically syncs up with the global system when the community regains Internet connectivity. In actual conflict zones today, people seem to get intermittent electrical & Internet connectivity, eg. the electricity will come on for an hour a day with rolling blackouts, and then you try to get everything charged in that one hour. And there are enough solar installations out there that several communities are likely to retain significant power even in the event of a societal collapse. But current crypto's consensus mechanisms aren't built for intermittent connectivity: you'd need to build and design something that is eventually consistent, where a weeks-long fork does not result in two competing cryptocurrencies.
https://fee.org/articles/how-a-fish-became-prison-currency/
It's pretty restrictive. You couldn't just port bitcoin to a CRDT while keeping CALM. You'd have to rethink the economics around the constraints of what's possible to do in a distributed way. But maybe that would be worth doing anyway.
Are cigarettes really currency in this case? Aren't they more like one of many possible barter units? Can't you also price things in ramen packs in prison?
Similarly, I thought the sea shells thing had been sort of debunked. In that scale of society you don't need currency, you know the guy. David Graeber summarizes this rather intuitively. Why would you need to give a guy a sea shell in a "hunter gatherer group"? You're gonna see him every day of your life and everyone is gonna know/remember he owes you one. It would be like giving your sibling a sea shell because you did them a little favor or something. It doesn't actually happen that way because it would be a complete waste of time, just actually return the favor next time. I believe the sea shell thing is more like a gift, rather than a currency. Like you might give someone a flower to tell them you think they're swell. Presumably you think that because they helped you at some point. That doesn't make it currency. People just liked giving each other shells.
I think on most modern theories, currency really comes about from conquest. The idea is as you expand these informal IOUs are not enough. You don't want to have to lug around ramen packs or cigarettes. So at the point of a sword or w/e you say hey take this coin and give us food and then you honor the coin enough and people trust it, not because it's "fungible, tradable, generally-durable commodity that the bulk of society decides to accept as being worthwhile" but because if you don't accept it the government will kill you. And if you do accept it then not only will they not kill you but they'll give things back to you later, which you will end up being a positive incentive for everyone. Now instead of a presiding over a killing field you've created a market. But without the threat of the state, it is not coherent. That's what government is.
That's basically what it says on American money. "This note is legal tender for all debts, public and private". So sure a business can refuse you service, that's a separate issue. But if you have a debt in the United States and you try to give them US dollars and they refuse and say, no thanks actually we demand cigarettes - well now they are breaking the law, aka inviting the wrath of the state. So everyone uses dollars because the last thing anyone wants is to be in debt and think a pack of ramen is gonna work and they just get to say no thanks cigarettes for me please.
And of course, you also don't want to get impaled on a spike by a dude who looks suspiciously like that guy on the coin you probably should have taken.
You actually see this on a small scale today in the functioning of many small communities, eg. you don't actually exchange currency to pay the host of a party, but you are expected to reciprocate and host sometimes yourself if you want to keep getting invited. There's a surprisingly large amount of these unpaid micro-transactions that happen, eg. my wife has gotten free childcare, free advice, free (used) furniture, free baby clothes, etc, all in the heart of Silicon Valley, because she reciprocates and also gives away her old furniture, baby toys, baby clothes, advice, introductions, childcare, etc. But when we have to pay the contractor for work on our house, we need dollars. When we buy a computer, we need dollars. When we buy all those goods that we give away new, we need dollars. That again reinforces the "credit is for people you know, currency is for people you don't" distinction.
Barter is used when a previous currency system collapses. The currency is no longer guaranteed to be accepted, so people want hard goods that they know they can use. But barter is an unstable equilibrium: as you mentioned, currency is just barter where one particular good becomes so widely accepted that people will take it not because they want it, but because it can be traded for other things that they want. There are reports of the Bosnian War [2] that described how alcohol and ammo quickly became pseudo-currencies because they were universally accepted and could easily be traded for what you actually needed.
Graeber isn't wrong, but as an anthropologist he over-indexes on the within-group interactions. There are lots of documented examples of currency emerging spontaneously from trade between groups where the groups all mutually decided that one type of object had value.
[1] https://news.ycombinator.com/item?id=49708431
[2] https://www.scribd.com/document/664716931/How-I-survived-a-y...
I'm not sure your in group/out group thing really holds up. I think of your credit/wife examples as not "credit" but something like basic reciprocity, closer to barter.
I think it's just a bit of blurring of terms. In my mind, bullets and ammo are just not currency in the same way a coin is. You can call it a "pseudo-currency" but the pseudo is kind of cheating.
I'm also not sure "There are lots of documented examples of currency emerging spontaneously from trade between groups where the groups all mutually decided that one type of object had value" disproves the point about violence/government. Can't I do the "pseudo" move back at you? What is the mechanism of the "mutual decision"? Would it be unlike the ones that lead to states? It sounds like everyone agrees something has value so we can have a dispute resolution mechanism. The implication being if you don't agree the other choice is violence? What if I say this "spontaneous collective of groups" is a "pseudo-government"?
Where would that leave us?
I do think that the development of currency is intimately connected with the development of government. The core problem government solves is dispute resolution, and I would bet that the majority of disputes come from transaction where one side does not hold up their end of the bargain. In small communities you just have the tribal elders adjudicate, but as you start doing more currency transactions between mutually-distrusting groups that can't agree on their authority figures, you need a system in place for dispute resolution. Cue states.
My point is simply that currency comes first. State formation is a consequence of extended trade networks transacting with currency, currency and trade is not a consequence of state formation. To my knowledge this is historically accurate, and there are a lot of examples of currency spontaneously arising without a state to back it.
Hell, cryptocurrency itself is a good example. We now have a viable transnational, trustless, instantaneous currency. We do not have a viable transnational trustless dispute resolution process. And we very much feel the lack, because crime and fraud is rampant in cryptocurrency transactions. Currency creates the problem that government solves. Creating a government that can go along with cryptocurrency is an unsolved exercise left to the reader.
Thank you - brilliant
I mean in the sense of, state formation was of such significance that I don't think you can say something like "currency came first" as if currency prior and post state formation is the same thing. It feels like the same sort of "pseudo-currency" with "currency" equivocation.
So if your model is - basic credit in that communal reciprocative sense, then you start trading with more distant outgroups, for this credit doesn't work, so everyone agrees on a currency, someone off in the distance doesn't agree, then states form to adjudicate disputes.
Then it is sensible as a primitive model, but I would just merely suggest that in the same way trying to say currency comes first is kind of a blurring the meaning of currency perhaps to the point of being a stretch, I think in this case to, it will be less orderly. One way this is blurred almost intrinsically in your articulation is via the term dispute resolution process. This could mean anything. It occurs to me that outright conquest and banditry is one way to resolve a dispute. Perhaps in places were there was "spontaneous" centering around a particular currency, this sort of violence was a predicate. I tend to think the need for violence and domination (and mitigations against the same) - what I think of when I think of states "resolving disputes" - was baked into the germ of humanity much earlier than what we might term "state formation". This gets back to the "pseudo-government" point I was trying to make earlier. I think of these things in parallel, rather than in sequence. If at their core humans are violent, such that they make violence, fear violence, and seek tradeoffs to manage violence, then this violence is a driver across currencies and states and trade networks, regardless of a determination of which "came first", if such a determination is even meaningful without greater specificity.
Similarly, I'm not sure if "State formation is a consequence of extended trade networks transacting with currency, currency and trade is not a consequence of state formation" is accurate in the same way. I suppose we have to unblur what "state" means.
I thank you for the back and forth though, which I enjoyed. I feel a need to do more reading on this topic, though I would guess much of these questions are not really falsifiable, as some of the answers are surely lost to history. Thanks, have a good day!
Kind of like how the local church might traditionally manage birth/death/land records, but that doesn't mean the documents are sacred or a religious observance.
Currency vs credit, as it was used some posts up is more like quantifiable vs not quantifiable. It's not about the exact catering expenses of parties thrown ("they had champagne, we have to invite them twice!") it's about inviting or not inviting. Not about the number of hours taking over the children, it's about being there when needed.
Well I mean technically they are always for credit purposes, even if they are the "default/convenient payment method"? That's part of the advantage, but it's still credit. You get to spend and pay later. It wouldn't be a very good evaluation for credit purposes if it didn't work like credit? Or am I misunderstanding you?
It's just to say that "credit" isn't just about an in vs out group anymore than debt is. Or anymore than "currency" is? I'm not sure how the distinction you make helps clarify that question. The point is why would credit be for people you know, and currency for people you don't? Isn't credit just a particular agreement around said currency?
1. I live in a village. I buy flour on credit from the miller, because I lack funds and they know I'll be able to pay them back after I sell my own textile goods at market.
2. I travel overseas to a store I've never seen before and I will never see again. I transact $100 on my credit-card purely because my debit card won't work for some reason. I leave with the goods, reminding myself to pay off the balance ASAP with funds I already possess when I get back to the hotel and a laptop.
Technically they both involve "credit", but it's not really equivalent. The first case involves a direct relationship in a community, while the second is indirect, a stranger trusting my card-company. In the first, incurring a debt is an intended feature, in the second the temporary debt is just a weird inconvenient quirk that I'd rather skip entirely because it makes more work for me.
In short, just because someone uses a credit card doesn't necessarily mean it's "credit" in the anthropological sense.
You said (emphasis added):
> We should be careful to distinguish when credit-cards are used for credit purposes versus the common scenario where they're just the default/convenient payment method and a debit-card could substitute just fine.
So it wasn't about "credit" in the anthropological sense, as credit cards are never used in such a way. Unless you are going to suggest there is some bifurcated way of using credit cards where one offers a more "direct relationship to my community". In short, my misread wasn't as you indicated - about failing to misunderstand something about credit cards. Rather it was conflating a general sense of "credit" (such as credit cards) with what they had meant, "I'm talking about "credit" in the David Graeber sense, where people effectively just remember who has done good things for them and reciprocate, not in the modern sense of credit cards and bank accounts." - which is what you term the "anthropological sense".
So I appreciate the nudge in the right direction, but I hope you see my point given what you actually conveyed. Thanks, have a good day!
I don't necessarily buy the idea that someone with a chicken and needed bread wandered around looking for a baker in need of chicken, but their argument does fly in the face of the idea that barter follows failed currencies.
If nothing else you have a chicken and egg problem to unwind there, and barter does seem a bit more basic or simple than currency so I'd have guessed it came first.
You can watch both barter and currency develop in groups of children almost spontaneously.
The point is that they weren’t just used within a single group where everyone had access to more for the cost of only labor.
Sure it's evolved, but I don't see anything in your comment that really disputes the tie to force. Of course, taxation is connected to force. Additionally, as I addressed in another comment, a lack of modern "central authority" does not mean a lack of connection to "force" or violence. People can come up with distributed or atomized versions, which nevertheless arise under a similar tradeoff with respect to the fear of violence.
Speaking in terms of U.S. regulation and legislation, crypto is variously regulated as a "commodity" or as a "security" and therefore, cannot be formally considered a currency. The name, "cryptocurrency" is a marketing ploy, which cleverly seeks to dilute the meaning of the term, which is a term of art, and is still reserved, in legal circles, for things which are, in fact, currencies, and function as currencies, and are regulated as currencies, which crypto… is not.
It was rather painful to me in particular, because a few weeks ago, I registered and attended a municipal education session on fraud. And this session was co-hosted by an actual representative of the Arizona Corporation Commission - Securities Division. I can prove that because my prize for the session was an authentic, imprinted, ACC/SD pizza slicer! Anyway, as soon as she mentioned crypto and asserted it is a class of "currency" I tried to call her out, and I asked more than once, and being reluctant to turn the session into a referendum on her legal knowledge, I finally let her win. It was embarrassing.
Anyway, no, cryptocurrency has never been a currency. Not in the USA. Other nations may deem it as such, but I kind of doubt it so far. Please do not conflate real currency with crypto. They are distinct things that are easily distinguished. The consumer should not be deluded into thinking otherwise.
You don't need a government backed paper currency, you need a mint making precious metal coins. History has several examples like the mints at the Potosí silver mines or those by the East India Company that enabled trade without effective governments to back them up by just providing reliable coinage that spread to many other polities.
As long as there isn't some crazy inflationary force like colonizers arriving with an unlimited supply, we can use something as simple as beads or seashells for currency quite fine. It just means more labor overhead to create that currency in the first place.
I think it's also the case that hard money is a different kind of phenomenon from paper money reflecting an entirely different philosophy concerning property and what it is. It reflects a natural law perspective in its most earthy and primitive form, which is that gold and silver are money because ancestors from time immemorial saw it as such due to certain intrinsic characteristics. Governments certainly regulated mints, but also marketplaces could and did regulate coinage on their own which is possible because of its physical nature. If a coin is clipped or made into a false alloy, that can be detected and corrected without state institutions.
Paper money by contrast tends to reflect more modern positivist theories of property in which property rights are deemed to exist because the state speaks those rights into existence. In the middle ages and even before, states as we know them now did not exist and could not exist, so positivism would have been absurd on its face, and its most direct application in the form of artificial currency could not be made.
The EIC's first mint was operational in 1643, long before it became a quasi-state. It started to become a quasi-government more than a century later, when it started raising its first major army in the 1750s culminating in the Battle of Plassey and didn't really have the resources to fully become one until the diwani in 1765.
Somalia operated on paper money valued at the cost of producing it
How something comes to be is distinct from how it is used.
I'm not sure. I want to say there's volunteering, charities, clubs, religions etc. But those all need resources (time, energy, money) put into them to remain viable. I suppose if something is unprofitable it means the resources (money or not) are drained faster than they go in, and the entity dissolves.
I was just thinking about click fraud, and how I'll bet that a significant number of clicks on sites are now being driven by simple (they don't need to be too complicated) LLMs.
[0] https://discworld.fandom.com/wiki/Cut-Me-Own-Throat_Dibbler
A high trust society. Everything else is downstream of that.
Also, to the power of modern-day cryptography that rubber-hose and evil maid (backdoors) are the only viable (even if expensive) alternatives.
> the government disappears, there are really only two fundamental technologies needed to reboot everything: money and contracts
Both of which require "governance", but post-collapse, it may be of form that may not benefit the collective.
It doesn't prove the hardness assumption, if it did we could trot forward any toddler and ask if it knows the factors to some RSA product, and "prove" hardness assumption for factoring integers...
The difference is that the western attackers go free, whilst the Chinese attackers will very likely be executed.
Banking systems exist such as they do with the regulations that they do for a reason.
I bought directly from ledger. I don't know if they were assembling devices in house at the time or not.
Edit: further context, this discussion is somewhat relevant to how confident they were. See the OP's remark about what ledger said: https://www.reddit.com/r/CryptoCurrency/comments/ssycjn/my_l...
I think it's good to remember this is always the case. Attacks on tamper evident seals are commonly called "theoretical" or "lacking value" in practical terms, but recent customs evasion using counterfeit seals in the US shows that to be untrue.
Heck, The Wire had an arc about people bypassing customs tamper-seal tags.
Don't give out your account numbers, there will be a lot of hassle should an evil person get it. However you have a reasonable change of getting your money back in a couple years. (this is also why you get warning about some countries - a few will not cooperate with traces and so the money is lost)
Is that a US thing? In Europe, companies have their account numbers on their letter heads and websites, and people are quite comfortable giving out their account numbers.
https://www.quelle.de/service-hilfe/bezahlung-finanzierung/k...
1. Something electronic that kicks of the thing where I need to enter the “ID codes” from device or app; 2. Being present at the bank and having been ID’d;
One example of subjectivity is if, and this happens, a bug is found which can drastically increase the supply of coins beyond the intent of the creators; everyone comes together and removes those state transitions manually despite their objective validity. A more practical notion would be some type of "this transaction was fraud, someone has authority to reverse it." Of course, this is a hard tradeoff, but users should be able to make it.
The only thing they are better is providing security in an easier way.
Yeah, it is totally great to have to set up a different account for every service, then having to do AML and KYC, and then having your account suspended for no apparent reason. So great that international transfers takes days and tens of dollars in fees, if they succeed at all. So great how a large part of the world‘s populace is denied access to the global financial system. Great as well how centralized it is, so things go down when there are technical problems at your bank. Absolutely awesome how Canada was able to freeze bank accounts of people who donated to the ”wrong“ cause.
They totally have it figured out, we should stop looking for alternatives. We already have the perfect system for the ages. Anybody who even tries is delusional.
The same attack on every desktop and laptop would be... significantly harder.
I'll give you a little hint - https://en.wikipedia.org/wiki/Monopoly_on_violence
[1] “Newsnight” on BBC
[2] As in Diffie-Hellman etc https://en.wikipedia.org/wiki/Whitfield_Diffie
Every single time I thought maybe people on the internet know what they're talking about, I've been proven wrong. The internet is for entertainment purposes only.
The only educational exception has been people who weren't exactly posting on the internet, such as the Berkshire Hathaway shareholder meeting videos or Stanford lectures.
There's a lot of grief can come from it, so I try and read this poem often. [0]
[0] https://gladdestthing.com/poems/ed
This is not a homogenous mass...it also keeps changing. The internet is just a medium. It's like saying people writing books know what they talk about. Doesn't make sense. Anybody can write on the internet or write a book
These Ledger hardware wallets are following the best security practices for hardware wallets and still got hacked.
Its slow, but it will never have been tampered with and can't be digitally cracked if you have multiple physical copies of the resulting seed.
I don't have to think about any of this stuff when I am using the payment terminal at Kroger. We have well engineered systems that eliminate the need for being constantly on edge about every monetary transaction. I can lose my entire actual wallet and experience ~zero financial impact, even if a malicious party obtains it.
What happens if my wallet bricks itself due to some misconfiguration or environmental transient? I don't have to keep multiple redundant copies of my payment cards around just in case my physical wallet self destructs.
--------------
From: Vincenzo lozzo
Sent: Monday, July 2, 2018 8:04 AM
To: jeevacation@gmail.com
Subject: Ledger wallet warning
Attachments: image1jpeg; Untitled attachment 00284.txt
In case you hold any coins in it, please don't spread this as they h=ven't released any of the information yet.
As for what is worth, the other wallets seem just as bad
--------------
Links:
https://www.justice.gov/epstein/files/DataSet%2011/EFTA02501...
https://www.justice.gov/epstein/files/DataSet%2011/EFTA02507...
https://www.justice.gov/epstein/files/DataSet%209/EFTA008603...
https://www.justice.gov/epstein/files/DataSet%2011/EFTA02505...
There are lots of security measures you can bypass if you pretend to be crazy within given bounds or simply stop acting sane.
I've worked in payment terminal hardware security and this is not surprising to me at all.
This attack on the Ledger wallets would definitely rate as amateur in terms of sophistication in that world.
I always thought it is stupid to HODL using a hardware wallet. For HODLing, just get a random computer (no mailorder) and run debian13 with electrum (it is in the official repo, not an external package hence protected by standard debian safeties). Once you generated you keys, back them up and either wipe the machine, or at least airgap it.
Extra bonus: Raspberry pi 5 runs debian 13 out of the box.
https://www.reddit.com/r/Bitcoin/comments/1x46gnh/a_fake_cry...
That poster didn’t even prove the fake wallet app stole his bitcoin (in the sense required in a court of law). Presumably it wasn’t worth the effort because their money was gone and not coming back, but still.
It's predictable: The ROI of attacking cryptocurrencies in this manner is high enough to make expensive attacks worthwhile. It doesn't make other expensive attacks on typical end-users worthwhile, and they remain far-fetched.
Back in the day, RSA SecurID hardware tokens were completely physically sealed, with no room for a backdoor. Tampering with them in any ways destroys them or makes it physically obvious. That's a physically secure design. This Ledger thing looks more like a consumer toy.
https://smallhacks.wordpress.com/2012/11/11/reading-codes-fr...
This reminds me of the 2020 case where a union organizer thought there was a spy camera inside a utility pole outside his house. It was in a conspiracy subreddit, so it seemed like the deranged ramblings of a ravingly-paranoid stranger. But they found the addresses of the IP cams and had plenty of evidence to corroborate it.
Now, Flock cameras are just normal.
I think the 2020s will be defined by this trend. "Things which only existed in the minds of a paranoid person" becoming normal parts of daily life.
Here are two sources on the matter:
https://www.reddit.com/r/conspiracy_commons/comments/gin79z/...
https://www.fox13memphis.com/news/activists-find-camera-insi...
In August 2020, this was unbelievable, and it would have been considered reasonable (if wrong) to dismiss OP as paranoid, especially for the subreddit they posted in.
> Now basically: every single attack that's been described as "theoretical" or "far-fetched" or "only existing in the mind of a paranoid person" did actually happen.
Huh? Nothing here is theoretical or far-fetched. Hardware attacks of this sort have been documented for decades and basically part-and-parcel for most intelligence agencies, from the US govt installing backdoors in Cisco hardware to the exploding pagers for Hamas. This is not even the first hardware wallet attack documented on the internet (although it might be the largest-scale one).
It's just that hardware attacks are complicated, expensive, and risky, so they're usually done in a targeted manner. The only news here is that the crypto community painted a gigantic target on their backs by inventing a currency that can be taken from them with zero recourse, broadcasting it to the world that they own a lot of it, and then buying cheap hardware from overseas retailers to "protect" their assets. So all of sudden, it was profitable and relatively low-risk to cast a wider net.
It's fascinating in the sense that we're discovering from first principles why the financial system works the way it does. The damage caused by cryptocurrencies has been really pretty staggering, for little real benefit.
ewww
I refuse to touch anything crypto with a ten-foot pole. I don't know if that makes me "paranoid", but it is certainly very easy. Just stay away from the thing doing drug markets, scams and rugpulls every month.
What about ignoring proprietary hardware wallets, and implement your 'wallet' as a small, bare-bones, self installed debian system with enough empty disk space to be a full node, that stores the data on a dm-crypt volume? Buy the hardware in cash from a random used computer store. No it won't be as convenient and portable. But if you trust standards-based crypto, you can implement your own ssh tunnel or whatever to it from your other client devices. This also lets you take 1:1 disk clone images of the dm-crypt volume and safely back it up to remote locations at any time you want.
Nit: did it actually do OCR? Given the implant was embedded in a specific known device that probably used specifically known fonts, you'd think they could just do a lookup a character's block of pixels to read the screen.
Is it? The theory and even the implementation is literally a gas station credit card skimmer for crypto. I do agree that anyone dismissing attacks on Ledger was foolish, but mostly because Ledger is an obviously low-quality product on even a cursory inspection, not because we need to become even more paranoid conspiracy theorists.
As long as the cost of sucha single-target attack isn't substantially below its potential upside, you should be safe.
Otoh, it's only meaningful if you have more than just toy assets in there.
There should be a range between those two though that would contain lots of folks comfortably.
Also known as buying a laptop, removing the WiFi card, and putting stock Ubuntu on it.
Yeah, the problem with "crypto hardware wallets" is the same as the problem with "secure phones for drug dealers" - they are an extremely juicy targets, you KNOW that any user of them is your target.
4G chips cost nothing and can be super small.
What would be cool is if someone from Ledger like did some reverse engineering, dumped instructions on how to buy these devices like this and made it so we could use them for hobbyist usage with our own esim. I could for sure think of some use cases for like remote wipe etc.
Any random person who can play spot-the-difference with two different pictures and is armed with a hammer could verify it in 15 minutes.
They don't even have to be technical or understand what the chips do or how the technical aspects of the compromise work, a raw visual check is all you need.
Supply chain attack?
"Can't do shit, not my problem."
If it was that easy to shed responsibility.
"We're talking here about a tiny eSIM implant and a little CPU doing OCR on the fonts appearing on the hardware wallet's screen to read the secrets during set up. So the secure element ain't tampered with."
...is accurate...it's one of the rare times I'd agree there's nothing they can do. And I was all prepared to storm in here saying "convenient excuse!"
The device should have bricked itself after someone opened it up to put hidden stuff inside. Also showing the key phrase to the user instead of keeping it secret to the secure element is a questionable decision.
Maybe these devices could ship in a tamper-detection-only mode, then detection triggered by user to be inspected by the user, then factory installed firmware wiped and reloaded if desired, have user key loaded to the firmware, and the shell sealed back up with electronic and physical detection enabled.
'You have unexpected components. You may want to have your device inspected or risking compromise of x/y/z. Should we continue or lock it down'?
Jokes aside, keystone wallets are air gapped. And not air gapped but awesome the lesser known but imo best of all, gridplus lattice1.
Heck, even a trezor, despite their mail provider being hacked, is better.
I, however, dont endorse the iPhone idea.
Just don’t buy ledger, terrible company. Many of my friends are getting endless spam because of them. The key backup is a disaster after they promised it was not possible to retrieve it. Their software stack is closed source.
This is imo the last nail in the coffin for them. They should refund all the money lost, and issue a worldwide recall.
Lots to hate about them.
Lattice for example, has strong anti-tampering features.
Then what is the best solution aside from tightly controlling the supply chain?
look up german angst
A few years ago, the Canon camera battery supply chain was intermingled with knock offs. The seller I bought from was exchanging for legit batteries or reimbursement when a customer made a claim.
But as the other comment points out, older HDCP is broken wide open so ... easier to just use that. Plenty HDCP strippers on the market.
https://grandideastudio.com/portfolio/security/ledger-hardwa...
They should have posted the weight with and without the device in it.
Also: never leave empty space in a hardware key, pot the whole thing in epoxy.
(sadly I have not found nice website with newer version photos yet)
If need be, just grind and cut till you are back to the one silicon wafer that contains crypto keys, then rebuild the whole lot from scratch, add your evil parts, then re-pot it.
The best I've done is to modify a potted chip by very careful thermal imaging to figure out where the part was that blocked the feature I wanted to unlock (market segmentation) and then drill through the case to a depth just higher than the chip. You'd have definitely been able to spot the difference. This was at the millimeter level. Recently there was a post about a group doing this at the chip level, which I thought was extremely impressive, and again, even with the recipe out there duplicating it would still be very hard.
https://www.xda-developers.com/how-drill-defeated-the-xbox-3...
Sounds like a good approach when you only have a single (or just a few) of the devices so you need to be careful.
With hardware wallets (aka substantial incentive), then the attackers could order a bunch of them for sacrificial zero-ing in the exact places to drill with a CNC/microscope/etc.
Yes, initially I had just the one. But once I had it figured out there were lots of other people that wanted their device 'improved' so that jig got used plenty of times. Even so working on other people's hardware always felt very scary, especially poking around with a drill in a sensitive piece of hardware. Even so, they all worked, it was a neat little trick.
But it was clear what it did: as soon as the channel selector went to a forbidden channel the blob sprung into action to disable the chip underneath. I measured the effect on the pins underneath that were accessible from the other side of the board and noticed that a whole bunch of them got shorted to ground. That was the hint I needed. A friend ran a laser game company and they had a nice little IR camera with built in display, that was used for calibration of the IR beam collimators in the laser guns (the laser doesn't actually do any of the shooting, the thing is basically just a very powerful remote control with a lens that sends out a relatively narrow beam). I set it up above the the blob and set the channel selector to a good channel and let it warm up. Had a look with the camera. Then set the channel selector to a bad channel, let it warm up again and had another look with the camera. The difference was pretty obvious, there was a hotspot right in the middle of the blob. I marked the spot and made a drill jig, then it took me a few days to gather courage and stick the drill in, it worked on the first try. That gave 18 nearly empty channels to play with. Once I had it figured out the second one was a lot easier :)
What you’re describing is a different thing. It’s an “evil maid” attack, when you tamper with a wallet that is already set up by the user. Also, it would be ultra difficult and expensive.
What you’re saying is possible. But:
It would probably be cheaper to build a total fake Ledger Wallet, then just replace the new real wallet and deliver a fake with a weak entropy generator. Any case, that’s not what has happened this time.
(The MITM supply chain attack which has happened succeeds because it preserves the original secure hardware but intercepts the secret data at the display interface. But a low-effort mimic of the entire device like I suggested? That wouldn’t work).
And as this workaround leaves the original Secure Element intact, good luck detecting the supply chain attack.
I'd assume it's not a coincidence and fraudsters made sure there's no easy way to trace anything back from the SIMs.
Even weight difference might not be obvious. He compared weights for one Ledger product but the small variations in weight among genuine devices made comparisons not clear.
Possibly only X-ray would uncover the fake without cracking the case?
https://youtube.com/@MagicalTux
(Warning - MagicalTux is Tibanne or Mark Karpeles. He has a “complicated” legal history, but this looks legit)
https://www.masterbond.com/techtips/tamper-resistant-potting...
The devices we made were put in places where there was a significant risk of tampering and to the best of my knowledge nobody ever managed to break the epoxy bond to the point that the circuit was still functional. But as I wrote above: not cheap.
...frankly, selling one as DIY kit have highest chance for tamper resistance. Tho pretty untenable with small SMD components sadly
If one would make a list of things that can go wrong, starting from the supply chain that delivers parts to the manufacturer, malicious employees at the manufacturer, mistakes the manufacturer can make, attacks on the delivery chain from the manufacturer to the user, to mistakes the user can make creating, using and storing their keys - the list would contain hundreds of points.
Nothing in this world tends to be "the solution", everything has tradeoffs.
Say you want to do self-custody, what is then the best option? "Don't do self-custody" obviously isn't the solution, as the core use case here is self-custody, so what in your opinion is a better way, than hardware wallets?
If there is nothing better today than hardware wallets, then for now, they are "one of the better solutions" for how to do self-custody, even with the current tradeoffs. But again, I'm eager to hear what the alternatives are.
A $5 USB stick with Tails on it. You can make as many clones as you want, so no need for a recovery phrase. It's not specialized hardware, so there's no incentive for anyone to look for money on it (plus it's encrypted). If you want to be extra tinfoil hat, make sure you only plug it into an air-gapped machine and copy any output (address, transaction hex etc.) onto another USB.
From a bird's-eye perspective, 3 things are needed: Create a key, derive an address from the key, store the key.
Creating a key safely is possible with dice. You would probably create a seed phrase instead of a key directly, but for this discussion it is the same.
Deriving an address from the key is hard and I have not yet seen a good protocol on how to do it. I have read through a bunch of descriptions of how people do it and they are all weak and brittle. The most popular seems to be "I order a hardware wallet and follow the instructions that come with it". But even people who put a lot of thought into it come up with weak and brittle approaches. I would think there is a way to do it safely. But I have never seen a description of one yet. It might involve multiple computers, multiple software implementations and a hell of a lot of work to create a multisig that is not prone to a single attack vector.
Storing the key is probably the hardest. The most popular way seems to be to store it in a drawer or a safe. So now those coins are just as safe as a piece of gold would be. Or they use a multisig and store the keys in multiple locations. Quite painful. As you have the ongoing problem of keeping those locations accessible and safe at the same time.
You're feeling pretty proud of yourself, your coins are super safe.
Then it turns out the RNG in the coldcard mk2 was badly/maliciously implemented and is completely insecure. You need to move your coins right now.
You can probably see the issue
I am still pro crypto and fascinated by the technology but we have to admit the original cypherpunk vision was unfortunately never going to work, we're going to end up with something else
Again, "best solution we have available" for self-custody is hardware wallets, so we're back to square one.
Imagine if I tried to discuss and argue about things like this on a TypeScript submission? "No, this won't actually solve the problems of TS" I say, "What is the solution then?" someone asks me and I reply "There is no real solutions to those problems, just use Clojure, problems avoided!", completely missing the point.
Look back as recently as last year and hardware wallets were held up as the recommended way to do self-custody all over.
Whenever I brought up the issue of losing coins due to hacks or bugs, I was told that hardware wallets had solved this problem.
Actually 2FA, hardware biometrics, behaviour based fraud prevention and personal confirmation of suspicious transactions. If you’re using credit they can refund fraudulent transactions, and there is the chargeback mechanism. This is probably banking system dependent, but in AUS there is a refund mechanism for mistaken/fraudulent traditional bank transactions.
BTC has effectively none of the safety net, and humans are fallible. We need the safety net. It’s the hugest barrier to adoption. Exchanges do a far better job of managing the risks than trusting your wealth to a hardware wallet.
In systems with a basis in technology, final means final. If the North Koreans take your money, your money is taken.
This piece from Patrick mcKenzie explains this well https://www.complexsystemspodcast.com/episodes/the-900m-wire...
So if I pay cash for something, I can get it back if a judge orders the counterparty to do so.
Why is cryptocurrency not the same? Can I not go to a court and get an order, exactly the same?
Of course I may not know the counterparty's identity or they may be in a hostile jurisdiction, but how is that different to cash that has escaped my jurisdiction?
It's just that incidentally, "entity you do not trust outside your jurisdiction" also includes basically your average crypto peer.
This seems obviously not true. If someone in New York steals your money then courts in New York can order them to give it back even if it's Bitcoin. If they don't comply then they get held in contempt until they do or the police seize their computer with the keys on it etc.
If the person who stole it is in North Korea then the courts with jurisdiction would be the ones in North Korea, which may not be to your advantage, but how is it any different from what happens after the money was transferred to a bank in North Korea? Or, for that matter, what happens if someone in North Korea has the stolen money deposited into a US account and then spends it before you get around to reversing the transaction?
The problem isn't what kind of technology you use, it's that someone can transfer stolen assets into a jurisdiction that won't help you get them back. Regardless of what payment system you use, they can get the same effect by using the stolen money to buy gold bullion or similar and have it shipped to them in their jurisdiction, and once it crosses the border they're not giving it back.
If you wire your money to North Korea, forget about it for a week, and then ask a court to intervene you aren’t getting your funds back.
That’s not an incremental change in risk over a crypto transaction.
Sure...? If you get scammed you probably are. My point is immutable transactions aren't unique to crypto. They're just a lot more difficult to stumble into with real finance.
I have yet to see a single one, not one, that had a system of custody that did not allow any one of hundreds of people, most not even employees, to walk away with all of the funds.
There are no standards for security that apply to crypto custodians and the mostly fail to do the bare minimums.
If you use even a top ten custodian, operate under the assumption that the funds are in multi billion dollar plaintext wallets sitting on AWS servers the whole team has ssh access to from the same laptops they "npm install" random shit to all day.
Honestly if you do not feel confident custodying crypto yourself, you should probably not own any.
Even if you are not hacked, or otherwise lose access to the funds, they are not unlikely to become worthless simply due to the system with the stable coins collapsing.
The liquidity can easily disappear, much more so than with Fiat currency or other assets linked to real economies.
You cannot protect yourself from being scammed in that way, even if you do hold on to your keys.
I mean crypto might seem like such a hedge, comparable to gold. But really it's a wealth redistribution scheme where already the current valuation depends somewhat on trusting exchanges that issue stable coins.
A person that doesn't have anything to hide is happy to leave it's money in a bank where, under EU legislation, it's guaranteed up to 100k euros per account (so you can have multiple accounts in multiple banks so you are safe), that is no matter if the bank goes bankrupt, the money is stolen, or whatever else you will have your money back.
https://de.fi/rekt-database
Basically, he was now just a safe cracker. He is a a locksmith, but 100% of his full time hours are cracking safes. He didn’t even carry around the stuff in his van to repin a lock. He gave me mates rates but the shop had to do it.
This man was attending multiple callouts, per day, to crack into a safe. Because of, you guessed it, human fallibility.
In a city with with millions of people, basically a hundreds of people needed a single locksmiths service because they had locked themselves out of there own “personal store of wealth”.
I’ve heard zero such examples through traditional banking, with the exception of stolen cards.
An ordinary MacBook does not have that issue. If you are a high-value target, you can further decrease your risk profile by buying it from a random physical store, further preventing targeted attacks.
In retrospect @gigachad’s summary is worth as much as both articles combined, but for the Clauded technical source (with pictures!) that Ledger’s Claude-release refers to: https://www.tibane.net/research/ledger-nano-x-implant
The ones with hidden eSIMs aren't!
Keyboard traffic is plain. Bluetooth access depends on where you are positioned. DVI is not hard to decode for capturing the entire screen. KVMs are so small now that one could easily be snuck in. Even though the motherboard is very compact, there is space above it and near the batteries.
I always assumed the people buying those crypto gadgets were idiots.
also, if Apple falls to a supply chain attack like this where their laptops are backdoored crypto theft will be problem number #10.
If there was one, someone would write down the steps necessary and put them on the internet. But I have never seen a sound description of how to self-custody Bitcoin in a safe way.
The hardest part seems to not even be the one that currently creates all those problems - the hardware and software used. The hardest part is storing the key (for example a seed phrase). If anyone says they know a way to safely store Bitcoin, my first question is: How do you store the key?
With bitcoin nothing is reversible so every step of the process is a huge security risk where you can fall off a cliff and experience financial permadeath of "your" crypto, assuming a sufficiently motivated attacker.
The wipe the device, use any non-debian other linux (or BSD) to generated the 2-of-2 wallet key.
What do you use to access your bank account online? I use my laptop, or my phone.
For inter-bank transactions involving a scam that causes the customer to “voluntarily” send money it depends on the rail. But US ACH rules cover reversals due to fraud and have pretty substantial rules about it.
I almost fell for a strange scam a while ago. A Steam user by the same name as one of my existing steam friends added me. I assumed it was his second account and accepted. A few days later, he messages me, asking me to participate in a DOTA2 tournament. I had previously played DOTA2 with this person, he spoke to me in our shared native language which is not English and everything seemed in order. I said I haven't played DOTA2 in years so I'm beyond rusty, he said I don't have to play, they just need me to register so they have a full team for the signups and then they'll find someone else to play before the tournament starts. Sent me a link to a website requiring a signup and I can't remember what it was now but there was something about the signup that irked me. Maybe it was just creating a account, maybe it required a credit card or something I can't remember but I ended up looking at my steam friends list and noticed both the accounts were online. So I sent a message to the other account asking if this is them, he said no and then I noticed the same scammer had added another mutual friend so I messaged them too warning them about it.
That's the closest I've been to getting scammed that I can recall. I'm not sure what the scammer would gain from my signing up but I'm sure they had some kind of profit angle.
Seriously, that's why we have banks, still.
Next is a hold on your suspicious transaction, request additional documents for your own money, basically a lot of AML and KYC before you can use what’s yours.
I understand the reason why they do this but it feels to me you are no longer in control of your money/property and somehow they fail to catch people loading billions from shady sources so I would rather not keep my money in a bank (at least not a retail bank) if I had a sensible option.
Most people don’t care about this until they get trapped just like most people are /were OK with Paypal and other junk services.
The actual reason to discount this is that account shutdowns are flashy rare events that reliably summon HN outrage, and so the kind of person who posts here overweights how likely they are, at least for people not on the margins of society. (If that weren't the case, the system wouldn't work and normal people wouldn't use it.)
Ironically the failure rate when I use the American Visa or MasterCard is maybe 5%.
A hardware wallet is way way way more likely to be backdoored[1] than an off the shelve Intel or AMD CPU.
[1] by people wanting to steal your crypto (unlike the NSA or Intel)
Also, general purpose hardware doesn't really prevent this as much as you might like. You're still subject to supply chain attacks even if Linux (etc) are quite secure. Look at supply chain attacks we've had in the npm and other ecosystems.
At this point, the best is a 2-multi-sig solution where one is some hardware wallet and the second is an iPhone app wallet where the seed is stored digitally only. So even if your offline seed is compromised, you are still covered.
Everyone at ledger has made absolute fools out of themselves.
They want to be certain they have the resources to properly personally verify the operations and trustworthiness of every authorized distributor that they’re vouching for.
https://xxcancel.com/Dantoshi/status/2110000117856248141
This was already the level of integration 13 years ago: https://www.bunniestudios.com/blog/the-12-gongkai-phone/
Observe how the SIM card socket is the biggest part on the board: http://bunniefoo.com/ntw/dozendp_8.png
https://x.com/MagicalTux/status/2108619685751374064
https://x.com/MagicalTux/status/2108574096636416402
Apparently the hacker did remove the battery and replace it with a smaller one, leaving enough room for the tiny eSIM/LTE modem / OCR chip that did recognition of the secret on screen.
They're here. It's wild.
I guess the sweatshop workers would then need to be trained in reballing BGAs if they did that.
Give me a shitty html4 page with the text ffs.
tl;dr Implant is just a little cell phone that does OCR of the hardware wallet's screen during setup to steal the recovery phrases. The implant's design has improved notably three different times before landing on a pretty darn sleek spot-welded overlay that is laminated flat onto the host.
We're dealing with reasonably sophisticated state actors here in this dark forest; not script kiddies.
Cheap $5 PCB + programmable small FPGA is a very viable route too for hardware implants; but even a microcontroller / ESP32/etc will probably do.
Cellular communications hardware seems very sophisticated and expensive compared to a simple microcontroller.
They did, in fact, appear to mass-manufacture a custom-built flat flex implant with cellular (LTE-M!), eSIM, and everything that hid right inside the Ledger, sniffing the SPI reads to the display to read the recovery phrases it pukes out and send 'em over cellular to the ringleader.
It's an EXTREMELY well built implant. I'm impressed. Multiple revisions, even.
The money's too hot to not build shit like this and slip it into the stream. Even a few thousand in R&D netting a six figure ROI is worth it, getting millions is just the icing.
But yeah, putting a cellular modem and eSIM on there is certainly taking it to the next level
Eg. https://dangerousthings.com/products/apex-flex?Antenna=Narro...
(Not so long ago you could hear them talk with the towers through regular home speakers.)
You need to actively listen at multiple frequencies at the same time (gsm/lte/5g have many different bands, + wifi/bt at 2.4/5/6 ghz and their bands). And you need to remove interference from all other devices to conclude that signal is coming from ledger (so any home isn't an option).
On top of that, you need to be listening at the exact time it exfiltrates data (it might intentionally wait for some time after using device), and you need to have the compromised device (which the hardest part here - you could test 100s of devices and not find anything).
So I think this could only be caught with a large scale, recurring lab testing, far from "trivial to detect".
When enough resources / money is involved, these things are to be expected.
If you can't get to the insides without breaking it, the only devices verified to likely be safe would be unusable too, so the product would in practice be even more unsafe.
If the user first inspects it and then glue it on their own, that would work, but it wouldn't solve this problem. Evil maid attack is something else and obviously harder at scale.
Even if one were to ignore the latest incident, which arguably isn't their fault, the first three incidents make up a pretty bad security track record.
How a French (EU based) company is still in business after all of this, is an indicator of selective enforcement of EU privacy laws (GDPR, etc).
I'd not release them soo easily from their share of responsibility. Tamper-proof hardware is a thing, electronic funds transfer terminals for example already implement ways to detect or prevent physical intrusion into safety-relevant parts of the device. Would probably have cost a few cents in manufacturing to add countermeasures to physical modification into the Ledgers. The fact that there is not even the slightest attempt at securing the device against this kind of attacks is entirely on the manufacturer.
> How a French (EU based) company is still in business after all of this, is an indicator of selective enforcement of EU privacy laws (GDPR, etc).
Surely you can name a dozen of US companies that have been driven out of business by enforcement of EU privacy laws. But I'd be glad if you'd at least name a single one!
You're better off just having a dedicated laptop for crypto transactions.
Actually the only one I know is the Gnosis Safe. Talk about creating a huge risk if it would have a problem.
Amateur hour all around.
UPD: NL, just like some other few countries in EU, doesn't require mandatory identification for SIM card purchases and activation
Even if you would hand it from the factory straight to a customer that comes physically to your factory to pick it up, then you would still require some sort of ID to know that that person is in fact the customer I suppose. Which removes some of the advantages of cryptocurrencies
> This article was originally published in German. It was translated with technical assistance and editorially reviewed before publication.
Presumably "technical assistance" covers just about everything.
This is some D grade trash writing.
But what I want to talk about is trust. The big selling point of crypto has always been that fiat currencies, governments and the banking system can't be trusted. Your money can be seized. You may be subject to capital controls. Also, you're subject to chargebacks and so forth.
So crypto hasn't really eliminated the trust issue. It's just moved it. Instead of governments and the financial system having to be trusted, you're trusting far less accountable hardware vendors who might be completely trustworthy as far as you and they know but they can still be subject to supply chain attacks. An extreme (non-crypto) example of this is the Lebanon pager operation.
I've always maintained the crypto is largely solving non-problems and it treats things in the financial system as bugs when they're in fact features, such as reversible transactions.
Crypto transactions has significant limitations, such as everything needs to be on the blockchain (ie the so-called Oracle Problem), which is the whole reason we have stablecoins, etc.
People with this hardware wallet were largely very sophisticated users and even they couldn't successfully and securely manage a wallet. What hopes does the average Joe have?
The more time goes on, the more I'm convinced that crypto is a solution looking for a problem.
Is it nowadays a workable defense to say that you had a bunch of AI agents in a sandbox doing experiments and they somehow escaped and you will totally make sure this does not happen again?
There are other elements of the article that are confused: an "eSIM" is SOFTWARE, not a "tiny chip". Perhaps they mean a "realSIM"?? The SIM is of course only needed to authenticate to a cell network. The article mentions an LTE module. So the e/not-e-SIM aspect seems a little by the by. The main meat of the trojan was a regular ARM SoC.
I don't care about cryptocurrencies but I've always been fascinated by the cryptography behind it. I've also dabbled with hardware wallets for non-cryptocurrencies stuff: like U2F auth.
The idea of a master secret that is behind a secure element which I control and which I can duplicate is amazing to me (as opposed to, say, "your" passkeys which Google/Microsoft/Apple can basically backup and transfer to other devices for you).
But really to me in the cryptocurrencies world people have been sold the lie that a hardware wallet was secure: it's not. It could be tampered with (as happened in this hack, where an additional rogue chip reading the screen and then sending it using an eSIM steals the secret) but it can also contain a bug (like the recent Coldcard exploit where Coldcard hardware wallets fell back on a RNG with only 32 bits of entropy and some dark-hat hacker cracked those and stole Bitcoins) and, most of all, the vendor of the hardware wallet itself can do nasty attacks (like "kleptography").
From the very start everybody in the ecosystem should have pushed of "n-of-n" schemes (say even just 2-of-2), where one secret goes on a hardware wallet from one vendor and the other secret goes on a hardware wallet from another vendor.
For years and years the tune has been: "PCs cannot be trusted, use a hardware wallet" but it mislead people.
PCs indeed cannot be trusted but unsuspecting users should have learned how to use 2-of-2 or 3-of-3 schemes, to become immune from hacks affecting one hardware wallet vendor.
The typical, non-sensical, response to this is the idiotic: "but if you have two secrets, if you lose one of them you lose everything". It's totally idiotic for people basically save a list of 24 words (the "seed", which is the master secret). Well, guess what: instead of saving a list of 24 words, you save a list of 48 words. Exact same thing, just twice longer.
That's my take: the entire "your coins will be safe if you use a hardware wallet" was misguided.
2-of-3 allows loss of one key, 3-of-5 allows loss of two keys, etc
The cost is increased complexity, but the alternative is potentially losing everything due to a single mistake. So far people seem to overweigh the complexity of multisig, and to overestimate their understanding of using a single signing device.
Why are theee no legal repurcussions to this?
Dogs = cryptocurrencies. Fleas = scammed.
(My hardware wallet is made of pleather and holds paper bills.)
Much better than the average crypto gambler.
The cash has been acting as a medium of exchange (something the cryptocurrency industry has given up on, at this point), which is its job, and my wealth is in capital. And capital is what the world runs on. And it's done really well.
Nothing like the monopoly on violence to severely discourage bad actors from executing something like this.
Like sure, they're not fully immune... But at least I can call my bank and show them that I didn't suddenly fly from New Mexico to Florida to buy $200 in gift cards from a gas station in the middle of nowhere.
Crypto MUST deal with fraud and hacking if they want to become reliable. At that point, they'll just become another bank with a casino attached.
PNC is so bad they even have “secret question” password reset, last time I saw it, e.g. “what’s is the name of your cousin”
https://www.biblioctopus.com/pages/books/938/u-s-currency/th...
None of these prevent thieves or anybody from knowing you have one worth stealing. The actual solution is to not use fundamentally broken transparent crypto like BTC that broadcasts to the whole world your exact funds and ties them to your identity on every transaction. With monero your funds could be 0,10 or 10 billion and that is nobody's business.
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These people are being suckered into a false sense of security with hardware cryptowallets. I mean, it would be very tempting to sell a hardware wallet with a backdoor inside of it to steal everyone's cryptocurrency, wouldn't it?
Keeping your wallet file on a USB stick (or encrypting it) merely reduces the window of time an attacker can get the information. The attacker with local access could simply replace your wallet software. Or make use of a keylogger, screen capture, memory capture, etc.
In that context a dedicated device is the safer approach, and a hardware key is a minimalist device to do that whilst also being less inconvenient than an airgapped dedicated crypto laptop.
HN will never permit to look into the origin of this criminal action and normies will not even put that possibility on the table because they've been programmed against it. Let's play a game, this is a serious criminal act. I bet this will be quickly forgoten in about 3 weeks without anyone in Germany pointing fingers to the guilty party.