Your Bitcoin wallet may be being opened by a "master key"!

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AiCoin
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11 hours ago

We usually think of Bitcoin wallet private keys as unique, unguessable passwords, with security comparable to a vault that is impenetrable. However, recent security incidents have completely overturned this perception—your crypto assets may have been at risk from the moment they were "born."

01-Source of Vulnerability: From "Astronomical Numbers" to "Enumeratable"

The core issue lies in the "birth certificate" of the private key. A secure private key requires extremely high, true randomness (entropy) to generate. However, some wallet software relies on flawed pseudo-random number generators (PRNG) when generating mnemonic phrases.

This leads to a drastic reduction in the possible combinations of private keys from the astronomical number of 2^256 to only about 4 billion (2^32). With today's computing power, attackers can easily and systematically generate all 4 billion possible private keys for matching.

Once a match is successful, that address and all its assets appear to the attacker as an unattended treasure.

02-Real Case: $14.5 Billion Shocking Theft, How the Vulnerability Was Scaled

1. Case Overview: The Collapse of a Former Giant

● Main Character: LuBian Pool, one of the largest mining pools in the world in 2020, once controlled 6% of the Bitcoin network's hash rate.

● Incident: From December 28 to 29, 2020, over 127,000 BTC were continuously stolen from the pool.

● Consequence: This resulted in the largest cryptocurrency theft in history, with the amount involved still reaching $14.5 billion. The mining pool quickly ceased operations after the incident, leading to its demise.

2. Key Evidence: Direct Confirmation of the Nature of the Vulnerability

● On-chain Plea: After the incident, LuBian spent 1.4 BTC through 1,516 transactions to send OP_RETURN on-chain messages to all hacker addresses, pleading for the return of funds. This desperate act confirmed the identity of the victim and eliminated speculation of hype.

● Official Analysis: The on-chain data platform Arkham clearly pointed out that LuBian Pool used an algorithm that is vulnerable to brute-force attacks to generate its private keys. This completely matches the description of the "enumerable private key" vulnerability.

● Current Asset Status: The hackers still firmly control this large sum, having only consolidated wallets once in July 2024. This means that the private key born from the vulnerability has permanently changed hands.

3. Pattern Confirmation: A "Public Secret" That Is Not an Isolated Case

The LuBian case is not an isolated incident. The "Milk Sad" vulnerability affected 220,000 addresses, with its root also being a flaw in the pseudo-random number generator. More thought-provoking is that F2Pool co-founder DiscusFish revealed that U.S. law enforcement has obtained the private keys of another batch of 120,000 mysteriously transferred Bitcoins in 2020, not through cracking or intrusion, but because these private keys also had randomness flaws during generation.

Recent significant events are proof of how these underlying vulnerabilities have been scaled:

Event Name

Amount Involved

Nature of Vulnerability

Key Findings

"Milk Sad" Vulnerability

Affected 220,000 addresses

Private key generation not random, can be brute-forced

U.S. law enforcement obtained private keys through deduction rather than cracking

"Prince Group" Incident

127,000 Bitcoins (about $15 billion)

Chinese mining pool wallets have systemic vulnerabilities

U.S. government becomes one of the largest entities holding Bitcoin

Source: Compiled by AiCoin

F2Pool co-founder DiscusFish clearly pointed out that U.S. law enforcement has obtained the private keys of 120,000 Bitcoins mysteriously transferred in 2020, not through cracking or intrusion, but because these private keys had randomness flaws during generation.

This reveals the real threat: the risk does not come from a specific hacker, but from a known, public vulnerability that you have yet to notice.

03-Dangerous Reality: Why Is There Still Continuous Fund Inflow?

It is concerning that users are still continuously transferring funds to these addresses that have confirmed vulnerabilities. This profoundly reflects the serious lack of education among cryptocurrency users:

● Many users are unaware of whether the wallets they are using have security risks.

● Some users do not even understand the basic principles of private key generation.

● They continue to use potentially problematic old wallets or transfer assets to old addresses generated in the past, completely unaware that these addresses have long been marked on the "public cracking list."

For attackers, this is akin to "waiting for the rabbit to come."

04-Summary and Reflection

The "Milk Sad" vulnerability and the "Prince Group" incident expose several deep-seated issues in the cryptocurrency ecosystem:

1. The Concealment and Long-term Impact of Technical Defects

These random number generator vulnerabilities did not appear recently; they have existed in the code for years.

Due to the decentralized nature of cryptocurrencies, once a vulnerability is introduced, its impact can lurk like a "time bomb" for a long time. Even if later fixed, the insecure addresses generated early will continue to face risks.

2. Lack of Industry Standards and Regulation

Currently, there is a lack of unified security standards and mandatory third-party auditing mechanisms in cryptocurrency wallet development.

Many projects sacrifice security for development speed, using unverified random number generation libraries, leading to systemic risks.

3. Serious Insufficiency in User Education

It is alarming that funds are still continuously flowing into known vulnerable addresses.

This reflects the severe lack of awareness among ordinary users regarding the principles of private key generation and wallet security, as well as the lack of effective channels to acquire relevant security knowledge.

Responsible Parties

Existing Issues

Improvement Directions

Wallet Developers

Use of unverified random number generation libraries, lack of security audits

Establish strict code review mechanisms and introduce third-party security audits

Industry Organizations

Lack of unified security standards and certification systems

Develop security specifications for wallet development and establish vulnerability disclosure and response mechanisms

Ordinary Users

Weak security awareness, lack of basic security knowledge

Proactively learn wallet security principles and regularly check asset security status

4. New Challenges of Regulatory Intervention

The U.S. government's acquisition of private keys through technical vulnerabilities rather than legal procedures has sparked new discussions about the boundaries of digital currency regulation. This casts a shadow over the future development of decentralized finance and reminds us: in the world of cryptocurrencies, threats do not only come from hackers but may also arise from the legitimization of regulatory actions based on technical vulnerabilities.

The security of cryptocurrencies is a systemic project that requires the joint efforts of developers, industry organizations, and users.

As ordinary users, we must not only pay attention to market fluctuations but also prioritize the security foundation of our assets—because in this decentralized world, the lack of security awareness is the greatest risk.

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