Stacks Co-Founder Highlights Lessons from Coldcard Security Incident: Diversify BTC Holdings

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A recent security breach involving Coldcard wallets prompted Stacks co-founder Muneeb to highlight key Bitcoin update strategies. He emphasized the need to diversify Bitcoin holdings, citing potential risks from unaudited code and quantum computing threats. Muneeb recommended allocating 20%-30% to ETFs like IBIT, 40%-50% to multisignature setups, and 20%-30% to advanced self-custody solutions. He also urged the industry to prepare for cryptographic advancements.

Odaily Planet Daily reports: Stacks co-founder Muneeb has shared his insights on the Coldcard wallet incident, summarizing lessons learned in three areas: Bitcoin storage, quantum computing threats, and ecosystem security construction. Regarding Bitcoin storage strategies, he noted that many industry security experts are even unaware of Coldcard, and top-tier security research institutions may not have conducted thorough audits of its code. Muneeb believes the optimal approach moving forward should be asset diversification rather than concentrating all funds in a single solution, and he recommends:

Allocate 20%-30% of BTC to ETFs, such as BlackRock’s Bitcoin ETF IBIT, to benefit from professional custody and regulatory protection;

2. 40%-50% of BTC use a multi-signature solution similar to Casa, such as a three-key setup, with keys distributed among a security company, a mobile device, and a hardware wallet;

3. 20%-30% of BTC is allocated to more advanced self-custody solutions, combining multiple hardware wallets and diverse entropy sources.

Regarding the threat of quantum computing, Muneeb stated that once quantum computers break current encryption systems, Bitcoin users may experience a shock similar to BTC suddenly being drained from cold wallets. The quantum threat is real, and the industry should prepare in advance rather than underestimate technological advancements, especially given the accelerated pace of scientific breakthroughs driven by large language models.

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