Original Title: How Korean Bitcoiners Survived Coldcard—and Issues It Revealed for the Rest of Us

Translation by: PANews Big Pliers

Introduction

The Coldcard hardware wallet security incident that erupted last weekend has caused a huge stir in the entire Bitcoin industry, with the aftermath yet to settle. The English-speaking community suffered heavy losses, while the South Korean Bitcoin community, which has a significant number of Coldcard users, reported almost zero losses. Is this a gap in technical capability, or are there deeper structural issues at play?

Koji Higashi, a Bitcoin practitioner from Japan, provides a deep analysis of the English-speaking community's over-reliance on Bitcoin influencers, loss of neutrality, and the "echo chamber" effect by comparing the responses of the two communities, calling for the principle of "Don't Trust, Verify" to extend beyond code to information filtering.

This article is not only a review of an incident but also an important reflection on the ecological health of the Bitcoin community.

The full translation is as follows:

The Coldcard incident that occurred last weekend brought a significant shock to the entire Bitcoin industry, and the dust has not yet fully settled.

Although I was fortunate not to be directly affected, considering the damage it caused and the potential negative impact on the future of Bitcoin, this incident has emotionally impacted me.

Amidst all this, I heard some interesting cases about how the South Korean Bitcoin community responded to the Coldcard incident, which I believe are worth sharing (thanks to @atomic for the information).

In short, despite the fact that there are many Coldcard users in South Korea, there have been almost no reported cases of direct Bitcoin losses locally. They handled this situation excellently.

In contrast, a notable feature of this event is that many of the victims came from the English-speaking community—those who are actually quite knowledgeable about self-custody of Bitcoin.

So why was the South Korean Bitcoin community able to safely weather this crisis?

I believe it’s not just a matter of technical proficiency or understanding of Bitcoin. It points to a problem that has been continuously deteriorating in the Bitcoin space for some time: the loss of neutrality and the over-reliance on influencers.

Using South Korea's successful case as an example, I’d like to point out some structural issues that I've particularly observed in the English-speaking Bitcoin community.

The South Korean Bitcoin Community's “Obsession” with Air-Gapped Self-Custody

As insiders know, the South Korean Bitcoin community has an extraordinary enthusiasm for self-custody and hardware wallets (especially air-gapped functionality, which is encrypted wallets that are not connected to the internet or wireless communications).

Because of this, Coldcard, being one of the earliest products to offer air-gapped functionality, is very popular among experienced users in South Korea. Until the incident occurred, there was evidently a considerable user base in the region.

Upon hearing this, you might think that many South Korean users suffered direct losses in this Coldcard incident. However, the reality is that, according to local insiders, almost no users in South Korea were affected.

Why?

It turns out that the leaders and influencers in the South Korean community have been strongly advocating for the "correct" method of self-custody.

In the context of this incident, they advised users not to trust the random number generation of any specific vendor’s wallet, but to generate their passphrases more safely by rolling physical dice. Importantly, it seems that many users genuinely followed this advice.

This is an impressive case. A community with such a high level of understanding of self-custody that is truly practiced is extremely rare.

Blind Spots and Biases: How Influencers Amplify Risks

On the other hand, why have the losses been so severe in the English-speaking community, where information should be more abundant?

As some have already pointed out, I believe one of the reasons for such extensive damage is the excessive trust some English-speaking influencers and podcast hosts placed in Coldcard.

Don’t get me wrong: I don't doubt that the vast majority of influencers are well-meaning and are trying to share the most accurate information possible. In this sense, it is unfair to place full blame for the financial losses on the influencers who recommended Coldcard.

At the same time, whether they realize it or not, quite a number of influential influencers and podcast hosts in the English-speaking community have been sponsored by Coldcard or have personal relationships with the team. Moreover, their alignment with the Coinkite team's "only do Bitcoin" philosophy likely distorts their objective evaluation and judgment of the product.

As a result, influential community leaders in the English-speaking world have developed an over-trust in the safety of Coldcard. Their followers and other Bitcoin users followed suit, further amplifying inaccurate information and perceptions.

In contrast, South Korean influencers—due to a lack of those direct, close connections and viewing Coldcard from a more neutral perspective—were able to calmly analyze the risks of trusting specific vendor products. They suggested that their followers generate random numbers by rolling dice, thereby minimizing trust in Coldcard. Ultimately, this approach protected many users from financial loss.

“Don’t Trust, Verify”: A Survival Guide Beyond Code

In hindsight, everything seems simple, but I have come to recognize that the excessive trust placed in influencers—and the resulting Bitcoin community "echo chamber" based on personal or financial relationships—is a significant structural problem.

Especially over the past few years, I couldn't help but notice that the overall quality of information and discussions about Bitcoin in the English-speaking world has significantly deteriorated, largely due to these distorted incentives and personal biases. I believe that the Coldcard incident has exposed this issue in the worst possible way.

Finally, the favorite motto of Bitcoiners, “Don’t Trust, Verify,” is usually used in the context of software development. However, I believe this motto should also be applied to how we filter general information beyond software.

In fact, I want to emphasize that simply considering the financial and relationship biases of the messenger—using basic common sense—can actively prevent many troubles and incidents.

This is something that even users without technical expertise can do. Personally, I believe one crucial reason I have survived in the wild west of Bitcoin for over a decade is my high sensitivity to human biases and incentives.

By comparing the success story of the South Korean Bitcoin community with that of the English-speaking community, I hope the entire community can genuinely reflect on itself and strive to avoid future financial losses and other potential harms.

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