How can a non custodial hardware wallet perform the function of a custodial wallet and yet expect people to make ise of such, we aren't novice anymore, at least by now the whole experience of what is happening that people are loosing their asset to the hands of custodial exchanges should habe taught us enough lessons to avoid anything that has to do with custody of what belongs to is with another party, I've also seen a centralized exchange claiming they are building a decentralized exchange wallet for it users, what a mistery, we have to be careful because they are painting black as white for us and we should not accept such or fall in for such.

^ With this announcement, that is definitely right, never use them at all.
The fact that just a year ago, the company claimed it was impossible for the seed to leave the device, but now they acknowledge its possibility, has further fueled the controversy. However, there is no funds have been stolen so far, but this incident has highlighted the potential vulnerabilities of hardware wallets, which were previously believed to be highly secure and we have a wrong thought.
From now on, I will not recommend that wallet at all.

Whether you opt to use the service or perform the upgrade isn’t the issue. The issue is that the way the device was designed was poorly because it shouldn’t be possible to extract the seed with a firmware upgrade which gets sent over the internet.

That seed should of never been able to leave the device. But we learnt that it’s not the case here. What if there is some fake software upgrade and people upgrade theirs and get their crypto stolen since it’s possible to extract the seed. What’s the point of the hardware wallet. Might as well stick with electrum.

Of course it is. I never invested in BTC a decade ago because I believed that governments would find a way to fight back against it.

I described the way they would do this as follows:

- Prison sentences for known holders of BTC. There are many varieties to this. For example my EU citizens now have to declare BTC holdings on their tax declaration forms. Not declaring this could have prison sentence as a consequence in the future. Or confiscation of other assets
- Taking down exchanges (lawsuits against Binance and Coinbase now happening)
- Attacking hardware wallet companies. We all thought this was impossible. Now we witness that it is not.

I wonder what Trezor is going to do. It won't be long before governments come knocking on their door. I can't imagine any of those companies surviving their regulations. And if they don't comply now, surely they will be taken out of business in the future.

I'm not tech savvy enough to understand if buying a device (either Ledger or Trezor) allows us to safely store BTC if we do not update any software (ledger live app, for example) for an entire decade. I can't imagine trading to be easy unless you constantly go through exchanges (which are under attack) or you constantly use apps (Ledger Live) which can only continue if you update it.

At least it's a better idea to move from them as soon as possible, what other options do you have? Stay with them? Ledger has said that it's designed in a way that it's impossible for the seed phrase to leave device but as you see, it doesn't work like that.
You'll never be 100% sure whom to trust but when something becomes clear, you should act accordingly.
Btw this Ledger accident can become a good opportunity for others to start a bitcoin hardware wallet business and increase the competitiveness and this is a perfect time for someone to come up with better security and with more proofs.

---

Am I the only one who feels a little confused? They say that they backup your seeds but at the same time they say that they don't backup your seeds

https://twitter.com/Ledger_Support/status/1658824402694283267?cxt=HHwWhoC9tayAqoUuAAAA

---

I don't live in the EU and i don't know about their tax laws, but i know governments cannot sanction, confiscate assets or require information from users who trade on decentralized platforms and use self custody wallets. Centralized exchanges and services are data farms, and the government can require any information from them or from their users or confiscate assets kept in them.
Governments don't have to "track" centralized exchanges, they comply with them, the charges you read against Binance and a few others is because of how shady they are and how they want to make profit at all cost.
I don't think the issue with Ledger has anything to do with the government attacking them, this was their decision because they want to make money or because they have forgotten the basic operational security of BTC assets, both Ledger and Trezor are now bad recommendations, there are better alternatives, or just set up your own air-gapped or cold storage wallet.

How do you know that? Because Ledger said so?

Those of us who act as asset owners who store in hardware wallets only need to store seed phrases as securely as possible. What is it for, to ensure that one day we can recover assets to another hardware wallet.
Isn't it that Bitcoin asset owners who store in Ledger can still ignore the Recover feature.

IMO, thinking as fast as possible can sometimes be useful and sometimes not. But the over-concern about Bitcoin because of this problem in my opinion needs to slow down a bit to be able to compartmentalize the problem.

The same viewpoint! How could we truly trust a company that's suffered a breach before? It's just fair warning for users to be careful, because what Ledger has technically done, is they backdoored their devices. Plus I will say it again like a broken record, "How can we really verify that their ability to backdoor isn't already there"?

But you're also right. Everyone is making the issue bigger than what it is. Anyone who doesn't like Ledger's update should buy a Trezor.