[The Crypto Industry Reignites Debate Over 'Who Should Hold Private Keys' Following $130 Million Coldcard Wallet Theft Case] BlockBeats News, August 10: A wallet security incident involving approximately $130 million in Bitcoin losses is reigniting discussions within the crypto industry about asset custody models—should Bitcoin holders rely on personal self-custody or shift toward institutional custody? Hardware wallet manufacturer Coldcard had a random number generation vulnerability in certain firmware versions back in 2021, which led to predictable risks in some mnemonic phrases generated by the devices. This vulnerability was discovered years later, and so far, over 5,200 addresses and approximately 2,000 BTC have been stolen, with losses totaling around $130 million. Following the incident, some investors have started turning to Wall Street custody products. Data shows that U.S. spot Bitcoin ETFs saw net inflows of approximately $626 million in the days following the event. Bloomberg ETF analyst Eric Balchunas stated that such security incidents could further drive funds toward ETFs. However, the Bitcoin core community remains steadfast in advocating for self-custody. Casa co-founder Jameson Lopp stated that recent events should not undermine users' confidence in self-custody and pointed out that third-party custody also carries risks. Early Bitcoin Core developer Peter Todd similarly argued that self-custody has a better long-term safety record compared to centralized institutions. Michael Tanguma, co-founder of Bitcoin custody platform Onramp, believes both approaches have flaws. He noted that concentrating large amounts of assets within a single institution creates a "honeypot," while hardware wallets face risks related to supply chains, firmware, and random number generation. Tanguma proposed a "multi-institution custody" model, where multiple regulated institutions hold keys through a multi-signature mechanism, requiring joint signatures from multiple entities for any transaction to reduce single points of failure. However, this model has sparked controversy. Critics argue that while multi-institution custody enhances security, it introduces permissioned management, conflicting with Bitcoin's original vision of decentralization. As Bitcoin increasingly enters pension funds, trusts, and institutional asset allocation, the industry is searching for new custody solutions suitable for long-term wealth management. The Coldcard vulnerability incident once again highlights the core challenge facing the Bitcoin ecosystem—how to strike a balance between security, decentralization, and usability. [Original Link]