Ledger’s hardware wallets have the most robust physical security on the market. To this day, nobody has been able to extract the seed words from the popular Ledger Nano S or the newer Nano X. But this kind of security is owed to a trusted setup which uses a closed-source secure element chip. In other words, you can’t verify what the device is doing and you must trust in Ledger with both your wallet xpub (so they know your public key and how many bitcoins you own) and security updates.

This “trust us” philosophy is a big part of the way in which Ledger operates as a company. But the recent news about Ledger’s database leaks should be concerning for all customers: on July 14th 2020 (which happens to be the French National Day), a security researcher has reported a data breach on the Ledger website.

The good news is that no customer has lost any coins. The bad news is that if you ever bought a Ledger hardware wallet from the official website, then your full name, e-mail address, shipping address, and phone number may have ended up in the hands of hackers.

Consequently, it’s likely that malevolent actors will contact you and ask for private information – or if you hold enough BTC to make the extra effort worthwhile, some people may even try to physically attack you. Just remember that Ledger will never ask you for information concerning your seed phrase, PIN number, or private keys.

Also, they most likely won’t ask you to confirm your home address and definitely won’t suddenly decide to send you a free hardware wallet if you tell them where you live. So if anyone ever contacts you and asks for such data, never reply to their message. It’s better for them to think that your e-mail address is inactive.

Furthermore, it’s important to be careful and never install any suspicious software update. Smart hackers will try to target you and ask that you install a critical security update on your Ledger Nano S or X. Never trust these sources and stay away from any update that doesn’t come from the Ledger Live software. Don’t fall for phishing or malware scams, as you may lose your coins.

The situation is very similar with the case of exchange hacks which target customer data and enable the hackers to extort coins directly from the owners. Ledger has done a poor job protecting your personal information, so you shouldn’t be surprised if you get contacted by all sorts of dubious people.

Ledger CEO Pascal Gauthier assures users that the company has taken immediate action in appealing to the CNIL (Commission nationale de l’informatique et des libertés, the governmental branch which deals with personal data over the internet) and filing documents to the French public prosecutor. But even if the hackers get caught and they face justice, your data is still out there and you never know who ends up getting it and using it for malevolent purposes. So please be careful if you think you might be targeted.

How can you securely buy a hardware wallet?

Buying a hardware wallet online can expose you to database hacking risks. But buying the same device from unauthorized sellers may also subject you to supply chain attacks. So what is the best way to securely buy a hardware wallet?

Well, the best answer is “Bitcoin conferences”. Most of the times, hardware wallet manufacturers will attend conferences and sell hardware wallets. This direct purchase won’t be registered under your name, you can pay in cash or bitcoins, and being in a crowd of Bitcoin enthusiasts also gives you a lot of plausible deniability – it’s not like you put a target on your back just because you purchase a Trezor or Ledger in plain sight.

The second best answer is “look for local authorized resellers”. If you check the Ledger website, you’re going to find a list of authorized retailers. Though it’s also a bad idea to order hardware wallets from their online stores, they sometimes also have physical stores where you can go and do your shopping. And in some cases (such as Amazon’s), their record of handling customer data is slightly better in terms of getting hacked – yet the fact that Amazon might share your shopping list with advertisers that can also get hacked should also be a concern.

Even if it costs more in some cases, it pays off in terms of privacy and peace of mind to purchase your hardware wallet from a physical store that doesn’t ask for your personal information. The experience should be as simple as dropping the device in your cart among a pile of other electronic-related devices, and then paying at the counter.

And yes, it’s convenient to order your hardware wallet directly from the manufacturer’s website. We’re in the middle of a pandemic, there are no Bitcoin conferences to make the process any easier, and sometimes we don’t have proper stores and distribution in our area of residence. Nonetheless, we should always consider the privacy tradeoffs and remember that privacy is the best gatekeeper of security – if nobody knows about it, then nobody can attempt to hack it.

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Today I have recorded and released a new video, which I titled “Bitcoin and Pokemon?!”. It’s available on YouTube, it contains lots of funny references and I’m sure that you will have a fun time watching it (watch out for a CSW and Farfetch’d joke).

Full Transcript

So Bitcoin and Pokemon, eh? As you’re watching this, you’re definitely assuming that I’ve gone crazy and have no topics to talk about – but don’t worry about it, I have plenty of plans for upcoming videos and they won’t be rooted in a Japanese animes from the 90s.

But speaking of Japanese, what’s the name of the guy who created Pokemon? That’s right, Satoshi Tajiri. And what’s the name of the leading character of the Pokemon anime? That’s right, Ash Ketchum – except that his name in Japan is actually Satoshi.

Hold up a minute, does this mean what I think it does? Satoshi Nakamoto, Satoshi Tajiri. Digital money, digital monsters. 21 million coins on the original chain, 151 Pokemons in the original series. Pokeballs, hardware wallets. Pokedexes, full nodes. Farfetch’d, Craig Wright is Satoshi Nakamoto. Exeggcute, eggs are pee.

There is definitely a connection there. And if you look at the design of the original Pokemon game on the GameBoy, you will notice that players were encouraged to trade Pokemons using the Game Link Cable. You can’t make this stuff up: kids of the late 1990s were connecting their GameBoys to create a peer to peer network and transfer rare digital assets.

You know, kind of like today’s cool kids who join a global peer to peer network and then download a client which allows them to transact value across borders in a permissionless, uncensorable, and verifiably secure way.

Bitcoin is a lot like Pokemon, and the two universes definitely have a lot in common. So someone who was into Pokemon in the late 1990s and early 2000s will definitely find it easier to learn about Bitcoin, as the core principles (no pun intended) are already there.

Even Jason Paige, the guy who sings the Pokemon theme song in English has recorded an adaptation of the theme song which is about Bitcoin. So if even he’s seeing a connection here, then I don’t know what else to say. I’m not making this up, here’s a sample and check the description for the full song.

And if you think that there are no resources to go more into depth, then you should know that I’ve written two articles about it: one for the Bitcoin Takeover website, which also describes certain aspects about Bitcoin in Pokemon terms, and the other one is on the Trezor blog and explains why hardware wallets are a lot like Pokeballs.

Share this with a friend who is a Pokemon fan and let’s travel across the land, searching far and wide, teach Pokemon fans to understand the power that’s inside Bitcoin.

Until next time, get on the Bitcoin Takeover website to listen to some educational podcasts and read some useful articles such as “Bitcoin Is Not Slow, It’s Highly Secure”.

Don’t forget to like and subscribe. And in the comments, tell me which Pokemon is your favorite and how many bitcoins you think it’s worth. Obviously, mine is Charizard and I think I’d take 1000 BTC for it.

And if you want to make me a donation, you’ll find a Bitcoin address in the description and a link to my Patreon page. Thanks for watching, bye!

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Trezor is responsible for designing the world’s first Bitcoin hardware wallet, and it’s thanks to their open source contributions that this niche of coin security has expanded and flourished.

The following article presents a limited-time offer for Trezor’s hardware wallets, which marks the celebration of the Trezor One’s 6th birthday. In a nutshell, purchasing a Trezor Model T between the 21st of July (starting a midnight, CET) and the 23rd of July (ending at 9 AM CET) will get you a free Trezor One. Please refer to a specialized website to understand how that relates to your time zone (or do the math yourself).

This way, you don’t have to think about which device is right for your needs: you buy the Model T and you get the other model too.

Why Trezor?

Back in 2014, Satoshi Labs has introduced to the world the Trezor One: a simple device which aims to protect your bitcoins from infected computers. According to co-inventor Slush, the hardware wallet was aimed to help him manage his BTC at SlushPool.

6 years later, the Trezor One is still the benchmark for security and the standard from which every other hardware wallet starts developing. Satoshi Labs also open sources all of their software, so you shouldn’t be surprised to discover that lots of other hardware wallet developers use their code.

As described by Slush in S4 E8 of the Bitcoin Takeover Podcast, hardware always lags behind software and tends to get inefficient in time. So the design philosophy of Trezor isn’t to release a new model every year to fix some security flaws (as other manufacturers tend to do), but to focus on developing software updates for the existing devices.

This is also why the Trezor One is still being manufactured and sold 6 years later its launch: it received many firmware updates and has been constantly fixed after vulnerabilities were discovered. While other manufacturers focus on the hardware part and chase physical security at the expense of frequently putting out new products, Trezor focuses on code.

Also, it should be explained what Trezor is not trying to do (at least at this point): physical security.

The lack of a secure element chip for physical security is addressed through the passphrase, the Shamir backup, and the multisig setups.

It’s not that Trezor don’t want to attain physical security (as a matter of fact, they are starting a project named Tropic Square to address the issue in their trademark open-source manner). Instead, they don’t want to compromise on the open-source auditability and transparency just to follow the security trend that Ledger have started.

You shill, muh Coldcard

Let me stop you right there are explain why I’m promoting Trezor. And no, this is not a paid post – I’ve joined the affiliate program of Trezor, and will only make money out of this if people actually buy their Model T in the next couple of days after clicking my link.

But while recording season 4 of the Bitcoin Takeover Podcast, I was surprised to discover that the two security experts (Lazy Ninja and Peter Todd) have expressed similar opinions about security: the best security is not the one that tries to cover every possible threat, but the one that’s limited and honest about its limitations.

It’s the reason why I have chosen to promote Trezor (they’re honest about who they are and what they’re doing), and I don’t know about you but I’d rather trust a developer and a hardware wallet hacker than a founder and his company’s marketing department.

“And if I am going to tell them to go get a hardware wallet, frankly I’d actually trust Trezor more because they do have a design that is based on more off-the-shelf chips than other people do. The problem with something like the Ledger is — to get all these fancy security chips — you have to go sign NDAs and then people can’t easily reverse engineer your devices and figure out if they’re actually doing what they should be doing. You’re actually putting much more trust into the manufacturer than you are on a Trezor, or let alone a phone” – Peter Todd

“I actually use a Trezor Model T. I had actually just upgraded from my Trezor One to that and now it’s sort of funny… people will be like ‘Well, you know, that doesn’t have the secure element that you like so much’ and stuff like that. And it is actually a security negative to that device to not have a secure element. And there are a number of attacks that are possible because of that. But in my case I’m valuing the screen size and ease of use from that perspective as being more important than the secure element. Because in general, I don’t actually take my hardware out of my house and I don’t actually store my funds on the hardware wallet most of the time. Usually everything’s in cold storage and the hardware wallet is just sort of storing intermediate levels of funds. So in my case, yeah, the Trezor Model T was the best one for me.” – Lazy Ninja

But wait, you work for Trezor!

Yes, as a freelancer who writes a blog post on the Trezor blog every couple of weeks. I’m free to talk about anything, I’m free to criticize or praise any product, I have no skin in the game at this point.

There are three reasons why I’ve written this article:

1. To raise awareness about this promotion (if you’re anything like me and collect hardware wallets, this is a good opportunity to expand your collection);
2. To explain what Trezor is all about (they’re not great at marketing their own products on Twitter and get a lot of undeserved hate while being the ones who create the code that everyone else forks for their “cooler” products);
3. To hopefully make some money from affiliate links.

So if you’d like to help me make some money, then please use my link.

If you’d rather make a donation to help me keep on writing, recording podcasts, and doing videos, then use this address: 3Hu32u76dDau752kjeH94e94JCU2fsMFoz

If you hate me for expressing a view which echoes the arguments of security professionals with a reputation and skin in the game, then so be it. Express it in the comments, cancel me on Twitter and do whatever makes you feel better about your own existence.

Bitcoin is extremely hard to change – and this is clearly not something that we can also say about dishonest altcoins and governments that compromise constitutional traditions to submit to the will of vocal minorities. And when it all comes down to protecting private property and immutability of public records, you definitely don’t want to bargain with vulnerable and ultimately fallible systems.

Today, even the most democratic countries engage in practices that infringe fundamental human rights. The protests that we’ve witnessed in the United States clearly prove a disregard for private property and a lack of willingness to protect owners from the attacks of an angry minority. Some may disagree with this view, but civil rights protests can also be conducted peacefully and with greater consideration for private property (as proven by a long history of peaceful protests).

One can also argue that this confusion between public and private is due to legal and economic illiteracy on behalf of the protestors. But the main argument here is that no protestor, dictator, or governmental authority can damage the money that you store on the Bitcoin blockchain. With Bitcoin, you simply choose to not expose yourself to such risks – but deal with a level of individual sovereignty that requires proper education for self-custodianship.

While your government chooses to not protect your private property (and even blames you when you try to apply the Castle Doctrine), you can opt out of this system with Bitcoin. Sure, you can’t protect physical property, but you can definitely store your wealth in a way that guarantees your property rights.

This article will explain why Bitcoin’s immutability and censorship resistance are unique, and argue that the network is better at protecting your property rights than your government. Ultimately, the choice about managing wealth is entirely yours to make.

The Bad News For Your Private Property: Man-Made Law Is Interpreted and Applied by Flawed Humans

Every modern constitution promises to protect private property and respect their citizen’s rights to own it. But in times of crisis, exceptions always emerge. Under certain conditions, the same government that vows to protect you from thieves and abusers will “temporarily” confiscate your possessions and issue a certificate that promises to compensate you for it.

And if elected officials are concerned about their popularity in polls, they will also be reluctant to apply the law when the decision appears to be unpopular or politically incorrect.

Law is a man-made concept and is due to human subjectivity. The 1936 constitution of the USSR (adopted under Stalin) “guaranteed” unprecedented rights and freedoms for citizens, including freedom of religion (article 124) and freedom of speech (article 125). Yet these provisions did not stop Christians from getting killed or being sent to forced labor camps under the atheist ideology, churches from being demolished, and journalists from being censored.

If the example of the USSR is a little extreme due to the great focus on propaganda and public image to cover up murderous deeds, then you probably won’t be surprised to discover that today’s common law countries aren’t doing so well either.

The USA might have derived its civil laws from Magna Carta, Thomas Hobbes’ “Leviathan”, and other works from the classical liberal tradition, but some decades of cultural Marxism have greatly diluted the value of freedom and property.

Take for example the case of Mark and Patricia McCloskey, who were filmed defending their property from their doorstep: they did not harm anybody, they merely stood their ground, they legally owned guns in St. Louis, Missouri, but the angry mob and the media have tried to portray them as the villains.

To some, the McCloskeys’ case of owning a historical house has turned them into “racists” who live a lavish lifestyle just like the slave owners of the 18th century. They were depicted as villains of the Black Lives Matters cause, had to take clueless attacks on social media, and were subjected to international scrutiny while acting within the boundaries of the law and on the doorsteps of their property.

In spite of the American tradition and the Magna Carta principle of “a man’s home is his castle”, the largest majority of the media has treated the story as if it came from a European country where owning guns is rare and illegal. Journalists have also used the McCloskeys’ wealth and race as arguments to suggest that the law is rigged in their favor.

The counter-argument here would be that mob rule and journalists’ judgment does not account for a judiciary ruling. But law is made by people and is doomed to receive new interpretations from every generation – especially in a common law system, where a role of disproportional importance is played by the jury and certain precedents can get twisted by a creative lawyer to strengthen the case.

While the constitution and the tradition suggest that an action of defending property is justified, the rule of a new and ideological mob suggests otherwise. There is only a small step that needs to be taken in order to redefine private property and fundamentally destroy its protections.

Under article 17 of the United Nations’ Universal Declaration of Human Rights, more than 100 countries vow to protect private property. Yet this commitment did not stop the USSR, Romania, and dozens of other communist countries from confiscating private property. And just because a country has had a good record, it doesn’t mean that it will remain safe while a large majority of the youth has been indoctrinated by Marxism and has a “class struggle” and materialistic type of worldview. Thankfully, Bitcoin partially fixes this.

Why Bitcoin’s Immutability and Censorship Resistance Protect Your Private Property

Since its deployment in January 2009, Bitcoin has constantly been under scrutiny and attackers never ceased to attempt to bring it down. Yet in spite of these attempts, Bitcoin has only been down for 15 hours due to early programming issues – this means that the network has an uptime of 99.98%.

And thanks to careful development, January 2009 holders can access their funds without any issues. If Satoshi Nakamoto wants to return and sell his coins, he can do it without anyone’s permission and without worrying that the new state of the blockchain has denied his access.

The biggest of Bitcoin incidents happened in August 2010, when somebody exploited an inflation bug. Consequently, the entire network moved to a new blockchain whose state preceded the issuing of counterfeit coins. This happened in a time when 1 BTC was worth roughly 6 cents, the development was still amateurish and reckless, and there was no industry built around Bitcoin.

Yet even this early resolution took into consideration property rights and the incentives of the Bitcoin network: financial scarcity was preserved, the total cap of 21 million units was considered, and the subsequent hard fork made sure that miners would only receive the fair amounts according to the rules. This lesson would improve the review process of Bitcoin code and put greater pressure on developers worldwide to do a better job.

Now the Bitcoin network has become so strong and global, that anyone attempting to send counterfeit bitcoins or cause double spends would get rejected by the honest nodes. Overtaking the hash power to cause double spends has become economically-irrational and very difficult to coordinate, while individual single points of failure have been eliminated.

Most governments can’t afford to individually or even collaboratively launch an attack (which would only affect the most recent few blocks), and pointing a gun to a developer’s head won’t help you insert a line of malicious code into the software client. In other words, Bitcoin as a network has matured to the point that its success is inevitable.

For reference, check out the voting for SegWit adoption and notice how many developers and businesses needed to agree with it before deploying the soft fork. And this was only a minor change that did not seek to change important rules or revert to a previous state of the blockchain. If you want to see records of opposition to change, take a look at the history of the XT, Classic, Unlimited, and SegWit2X hard fork proposals.

You might also want to read the reactions that Binance CEO Changpeng Zhao has received from community members when he suggested a rollback to recover the bitcoins his exchange lost in a hack. A day later after implying a selfish change, he had to correct his statement and try to do damage control.

Immutability and censorship resistance are Bitcoin’s strongest points, and the reason why it’s one of the safest ways to store value. As a network that’s governed by simple, clear, and publicly-auditable computer code, Bitcoin does what you government simply cannot: resist external pressures and apply the rules objectively, irrespective of who makes a request and what kind of wealth or influence they may possess.

Bitcoin doesn’t care about your nationality, race, gender, wealth, social status, or influence – and nor does it include any such provisions. As long as you respect the same objective rules as everybody else, you benefit from the exact same experience as everybody else. Where even the internet has failed, Bitcoin succeeds in creating a global, state-agnostic, and censorship-resistant network which relies on provable truth and enables a secure way of transferring value.

After 12 years of existence, Bitcoin is already better at protecting your property rights than your government.

Your government can and most likely will look the other way when protecting your private property involves making an unpopular decision. Constitutional law may be written in your favor, but the people in charge of applying the law may seek re-election and decide that you being the loser is the preferable case in their cost-benefits equation.

Bitcoin simply doesn’t care, as it’s operated by mathematic rules. The only bribe that you can offer is to a miner who may include your transaction in the next block. But you can’t pay another network participant to have someone’s funds frozen or stolen – and if you want to brute force SHA 256 cryptography to derive the private key from the public key, then good luck. It takes the Sun’s entire energy just to count to 2^256, let alone try all possible matches.

After 6 network confirmations, it’s safe to say that a transaction (and the block storing it) has become irreversible and permanent. And if this claim leaves any room for skepticism, feel free to refer to the research of mathematicians Ricardo Pérez-Marco and Cyril Grunspan, who demonstrated that rolling back one confirmation costs at least 50 coinbases (312.5 BTC in the current era, and $2.9 million at today’s rate of $9287 per BTC).

In the past, the US government excelled at protecting private property rights because it was also hard and costly to make any infringement (just like it’s increasingly costly to attack Bitcoin). If politicians were to be in favor of violating the sanctity of private property, they would be subjected to high levels of risk (falling out of grace, getting voted out of office).

Today, due to the intrusive technological surveillance which destroys privacy (the first requirement of security) and the abundance of cultural Marxism in education, the norms and incentives are changing. It’s safer and cheaper to violate somebody’s private property, and the signs don’t really point towards a favorable future for the Castle Doctrine.

Bitcoin, on the other hand, will never have arbitrary interventions with ownership under the premise of self-custody. Custodians are able to freeze your funds or censor transactions but they don’t like. But if you own your keys and take individual sovereignty seriously, you are the master of your own fate.

There is a great sense of power and responsibility that Bitcoin ownership brings. But the fact that no government, trans-national corporation, mining cartel, or user can tell you what to do with your money or prevent you from accessing it is truly unprecedented. And thanks to privacy improvements such as CoinJoins, ownership comes with a great plausible deniability.

In these times of civil unrest, owning real estate or any other types of physical assets may be risker than dealing with Bitcoin. It’s not even about the price volatility (which is irrelevant to long-term planners), but about the protection of your property and your rights to keep on owning it. If an angry mob decides that you should pay for the assumed crimes of your grand-grand-grandfather while the government shrugs off the fundamental and publicly-subsidized responsibility to provide protection, there really isn’t much that you can do.

You can play this game of class struggle, historic justice, and justifications for violence, or you can simply opt out by using Bitcoin. At this point in time, the Bitcoin network protects your private property a lot better than your government.

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This article started from a loose idea and took an entire day of work to develop, fact-check and document. If you would like to support my work and see more arguments about Bitcoin’s unique placement in this otherwise strange and troubled world, please consider making a donation.

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