The original post: /r/bitcoin by /u/Ok-Actuary6706 on 2024-12-09 11:06:27.
I read another post about the probability of the cracking a random wallet by brute force.
Basically, to crack an exisiting wallet in 3 years, the post states a computer needs to calculate 10^60 seeds per second
According to Freethink (https://www.freethink.com/hard-tech/supercomputer-uses-machine-learning-to-set-new-speed-record#:~:text=On%20May%2027%2C%202022%2C%20Frontier,fastest%20computer%20in%20the%20world. ) In 2022, the #1 supercomputer perfromed 1.1 quintillion calculation per second (= 10^15). And Google’s new quantum computer states it is 241 million times faster than that. This results 2.41*10^23. Just to simplify, lets say 10^23 calculation per second.
that means with the current quantum computer and 1# supercomputer, it will take lesser than 9 years and 12 years respectively to crack an existing wallet.
That poses me a question, are 12 words seed phrase the safest way to keep bitcoin?
Currently, other major accounts, such as Microsoft or bank accounts, require an ID, password, authenticator, and often additional verifications, which significantly reduces the risk of unauthorized access. However, relying solely on a 12-word seed phrase for cryptocurrency security seems inherently unsafe. It appears illogical to claim that a 12-word seed phrase is the most secure method when it lacks the multi-layered security of other systems, like passwords or authenticator apps. Anyone could theoretically attempt to guess the correct combination from the 2048-word dictionary. You just have to hope that nobody attempts your seed phrases. Whereas you can change password regularly, and lock your account after 5 failed attempts / see login attempt details under security section for other major account.
The probability of winning the Powerball lottery is 1 in 292.2 million, and this probability remains constant with each additional ticket purchased. However, unlike lottery tickets, the probability of a successful brute-force attack on a cryptocurrency wallet decreases with each failed attempt. In theory, a wallet could be compromised on the very first attempt. Currently, the average mining cost for one Bitcoin is approximately $90,000, and this cost is likely to increase. What if a state actor like North Korea were to deploy a supercomputer to systematically attempt to crack cryptocurrency wallets using brute-force methods? Or what if major Bitcoin miners were secretly engaging in this activity, potentially finding it more cost-effective than traditional mining?
BlackRock, currently the largest ETF company, holds its Bitcoin with Coinbase Custody, not in a cold wallet. In contrast, MicroStrategy appears to be holding its Bitcoin in cold storage, likely based on Michael Saylor’s public pronouncements regarding the use of seed phrases.
Does keeping bitcoin on coinbase or another major exchange increase security over having a cold wallet? Are there any better methods of keeping cryptocurrency over 12 or 24 seed phrased cold wallet?