Hacker News Reader

Comment by 21 | Hacker News Reader

Hardly surprising.

It's hard to steal a truck of gold, especially considering the mens with guns which are typically around. It's hard to mess up physical security of a truck (not even to mention a vault), and even if you lose it, the thief still has a big and heavy problem on his hands. Real world police is good at these things. And unlike bitcoin, gold can't just teleport to Russia (using a generic non-cooperative country here)

Stealing bitcoin requires just one tiny mistake in a miriad of places (starting with random number generation, ...), and then you are done with no other recourse.

View on HN

Coinbase uses redundant hardware wallets in geographically-distributed safe deposit boxes for their cold storage. It's very unlikely that they'll have a major theft from that, and their hot wallet funds are insured.

Personally I think hardware wallet random numbers are safe but anyone technical who's worried about that could generate their own from von Neumann coin flips, and turn that into a 24-word seed for setting up a hardware wallet.

https://en.wikipedia.org/wiki/Fair_coin#Fair_results_from_a_...

I wouldn't say this is more difficult than securing a large amount of gold. If someone gets into your safe deposit they can just take your gold. With a hardware wallet you get three guesses of a 4 to 8 digit PIN and then it wipes itself. And you can't store gold redundantly to protect from loss.

If I live in a huge city, I might have afew million people to protect your gold against.

Anywhere in the world your securing Bitcoin against a billion or more people, plus bots. A proven attack vector could wipe out thousands of people in afew minutes.

If your key was generated properly and isn't on a computer connected to the internet, the only attack vector is physical.

> With a hardware wallet you get three guesses of a 4 to 8 digit PIN and then it wipes itself

> wipes itself

Now that seems like a really shitty security feature. Whoever finds it can just wipe out your funds?

Its a great feature. I have a ledger nano S. It looks like a big USB key, so it would be really easy to lose. Or it could break or malfunction or get stolen or something. I don't want to risk a significant chunk of my assets on the off chance that happens, so I store the recovery keys in a safe place as a backup.

Now, given that I have recovery keys stored in a safe place anyway, the ledger itself is somewhat disposable. Its still a great way to actually access my money, but if something happens to it I can just get a new ledger. So, yes, I want it to wipe itself if the wrong PIN is entered a few times. That feature means if I lose the ledger I can relax knowing my money is still safe even if somebody finds it.

Usually you have a group of "recovery phrases" that once entered into the device, it restores itself so you can still access the funds. There is more information how this works on a Ledger Nano S for example here: https://medium.com/@trionkidnapper/ledger-nano-s-restoring-a...

> Now that seems like a really shitty security feature. Whoever finds it can just wipe out your funds?

That is good for someone who have several secure redundant copies.

No, they wipe out that hardware. It's like your smartphone wiping itself with a few wrong password attempts. It can still be recovered, it just means that particular hardware is now useless until it has been recovered. It's great if you lose your smartphone, but if it was just your kid messing around then you can still recover it.

They can only wipe out your funds if they copy they wipe is the only copy. But this is extremely poor practice, and backups are very common practice to protect against precisely this sort of thing.

How bug-free is the "hardware" wallet though? Especially given that we recently saw a weak key issue force Estonia to re-issue all its PKI ID cards ...

To avoid any possibility of weak key issues, flip the coins. Key generation from the random seed uses a standard algorithm that has been public for years, with billions of dollars available for anyone who breaks it. You can check the implementation by entering your seed into other software to make sure it generates the same addresses.

You don't have any trucks involved when you buy gold, just some entries in a ledger changed. Some gold funds buy futures not physical gold too.

People also buy shares which don't give them substantial dividends. Many wrong things are overvalued nowadays. See my comments.

Why would one care about whether a dividend is paid? Tax treatment?

Reply on news.ycombinator.com