It has been a tough start to 2023 for Luke Dashjr. One of the first Bitcoin developers and one of the most important figures in the community has just announced that almost all of his BTC has been stolen.
All 213 BTC stolen?
In a series of tweets on Jan. 1, Luke Dashjr, a leading Bitcoin developer, said his PGP key — Pretty Good Privacy — had been leaked and many of his Bitcoins “had been stolen.”
In response to a Twitter user’s question about this possible hack, the developer replied that he “has no idea” what happened.
Netizens reacting to the news made a number of assumptions about vulnerabilities that hackers could exploit, but none of them were verified with certainty.
Part of the funds were sent to CoinJoin mixers, which help anonymize the transactions.
In an update a few hours later, Luke Dashjr confirmed that all of the BTC he was holding had been stolen. The published address shows that 213.6 bitcoins were transferred, equal to $3.5 million in current prices.
Luke Dashjr doesn’t understand how this could happen, he reached out to the FBI and his community on Twitter for help. Cointelegraph posted a comment from a user wondering how he could help one of the original developers of Bitcoin Core who is very security savvy.
Blockchain security
As a reminder, Bitcoin Core is open source software released by Satoshi Nakamoto in 2009, initially called Bitcoin Qt. The software is open and accessible to all, which is Bitcoin’s decentralization philosophy.
Bitcoin Core provides access to the Bitcoin network, so transactions on the Bitcoin blockchain can be received, sent or simply verified.
Today, few developers can boast of participating in such an adventure, which helps protect the Bitcoin network.
As a reminder, a cryptocurrency holder has both a private key and one (or more) public keys, which are sequences of numbers and letters.
The private key, which must remain strictly secret, allows users to make transactions (payments) in cryptocurrency, while the public key, known to all, allows them to receive transactions (payments) in turn. It’s a bit like the RIB in France when you have a bank account.
Details of the case should emerge, helping to understand how a prominent member of the Bitcoin community was able to lose such a large sum of money when kept in a cold wallet.
We remind you that it is better to keep your cryptocurrencies in “cold” wallets, never reveal your private key to anyone and use the best security measures.
The use of cold wallets
Cold wallets (or “cold wallets”) store the private keys associated with users’ cryptocurrencies outside the network (computer, phone). They allow you to carry out transactions (transactions on decentralized platforms, sending cryptocurrencies, buying NFTs) for users connected to the network.
Other means of protecting your cryptocurrencies are so-called “hot wallets”, which are connected to the Internet or centralized cryptocurrency platforms – such as Binance or Coinbase – hold the private keys of cryptocurrency users for security reasons.
Therefore, if the platform fails, it removes users’ private keys. We saw this with the FTX crash.
Despite the ambiguity surrounding the incident, Luke Dashjr has received support from Changpeng Zhao on Twitter.
The Binance CEO said the company’s security team knew about the theft and if the lost bitcoins passed through the cryptocurrency exchange, they would be frozen.