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Air-gapped Bitcoin wallets reduce online risk but can still be exploited

Coldcard, an air-gapped hardware wallet maker, was hit by a major exploit that has led to losses totaling more than $114 million in Bitcoin, underscoring that offline security is not absolute.

Reported · Written up by our desk · Market Structure

Air-gapped Bitcoin wallets are designed to keep private keys completely isolated from the internet and wireless networks, aiming to reduce exposure to online attacks. In this setup, the wallet physically separates from connected systems, so keys cannot be accessed through typical online pathways like Wi-Fi, Bluetooth, or NFC.

Despite that offline approach, Decrypt reports that air-gapped wallets are not immune to threats. The outlet points to an incident involving hardware wallet maker Coldcard, where a large exploit has resulted in user losses totaling more than $114 million in Bitcoin, highlighting how attackers can still cause harm even when internet connectivity is eliminated.

The piece also explains how wallets do not store crypto directly. Instead, they manage public and private keys that authorize blockchain transactions, with the private key functioning like a password or digital signature.

Air-gapped wallets are positioned as a high-security form of non-custodial self custody, where the user controls the keys and bears responsibility for protection. Decrypt’s overview argues that even the strongest design protections can be challenged by real world vulnerabilities.

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