this post was submitted on 17 Dec 2023
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You own a cryptographic key that a bunch of strangers have decided points to a spot on a ledger. These strangers have no legal connection to you, but things have been working out pretty well so far because your incentives align.
As a bunch of Ledger owners are finding out, there are reasons for FDIC insurance of banks and that reason is so that people don’t have to be exposed to the dangers of storing all their money under their mattresses. Everyone recommends getting your crypto into a hardwallet, but what happens when a Ledger update bricks it? Or the company decides to backdoor it to escrow your “private” keys? And what can you do with those hardwallet funds besides HODL? Can you imagine if every time you wanted to spend part of your dirty fiat savings, you had to expose all of it to danger to do so?
The FDIC is a scam. If JPMorgan or Wells Fargo failed they would not have enough to cover the loss. In fact they only hold ~2% of what they insure which would leave 98% of people with nothing. The only reason the FDIC is not bankrupt is because a cascade of banks have not failed all at once
The recent incident was a software supply chain attack. I am not aware of a bricked update but thats not saying much since i dont follow them closely
You lose all trust in them as you should and no longer use their products.
That is the point of a hardware wallet to hold your funds securely until you want to use them.
Your hardware wallet acts as savings and use a hot wallet as a spend account with less money in it.
I’m just saying what I saw over at https://old.reddit.com/r/ledgerwallet/search?q=Lost+my+btc+upgrade&restrict_sr=on&sort=relevance&t=all
Obviously I haven’t checked up on all of those, but it does seem to happen a bit. I’m not sure how frequently would be considered okay here, but that’s the sort of thing that shouldn’t happen.
Yeah, it should not occur. I have never used one, so do not know exactly how it works. But I have not lost any crypto in the 10 years I have been using crypto.