New Bitcoin addresses jumped from about 260,000 to more than 330,000 in a week, reversing a decline that had persisted for most of the year. The surge coincides with apparent wallet migrations off Coldcard hardware wallets after a firmware bug exposed weak private keys, with thefts topping 1,816 BTC since July 30.
The number of new bitcoin addresses climbed from roughly 260,000 to more than 330,000 last week, sharply reversing a downward trend that had persisted for most of the year. The jump lines up with apparent wallet migrations tied to an ongoing exploit of Coinkite's Coldcard hardware wallet.
Coldcard users have lost at least 1,816 BTC (~$116 million) across four theft waves since July 30. The losses trace to a 2021 firmware bug that generated wallet seeds with a weak software random number generator instead of the device's hardware entropy source. That flaw collapsed the effective strength of the resulting private keys enough for attackers to brute-force offline wallet generations.
Coinkite has told any user who generated a wallet between March 2021 and its security patch to move funds to a freshly created wallet. That advisory has contributed to the rise in new addresses being used on the network.
The exploit is a stress test of self-custody. Self-custody's allure has included the removal of counterparty risk, but it doesn't remove implementation risk, and this episode surfaces dangers that persist even for holders who followed standard hardware wallet practices.
As exploits have surged this year, users and holders are increasingly weighing the benefits of self-custody against custodial options such as centralized exchanges or ETF vehicles for exposure.
Source: The Block
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