It is important that the device is dedicated for specific use; do not use your everyday mobile phone or computer to manage your assets.

Written by: Lightning

There has been a major incident with hardware wallets again; Ledger wallets sold by distributors have been tampered with to have chips implanted, which can steal assets. Someone posted on X (note that this is not from official sources) claiming that there is a circuit board hidden under the Ledger screen that can steal and send your mnemonic phrase while you are writing it down.

It is now said that the stolen amount has exceeded 90 million U, involving more than 300 wallets.

A long time ago, I wrote an article expressing skepticism about hardware wallets, titled "Using a Dedicated iPhone + Wallet App is Better than Using a Hardware Wallet".

Back then, I felt that a dedicated iPhone with one wallet app was secure enough.

But now I feel that is no longer sufficient. AI has become too powerful. Attackers have more tools: phishing pages look more genuine, fake customer service sounds more convincing, scams can be mass-customized by a single person, and those 0day vulnerabilities we don't understand can be magnified as threats by AI, with more attacks that we ordinary people can't even comprehend being amplified by AI.

However, we can also use AI to strengthen our defenses.

1. Use Multi-Signature, Split Keys Across Different Devices and Wallets

First, I have to retract the viewpoint I expressed years ago that one device is enough. I now believe that using multiple devices for multi-signature is necessary for sufficient security; the risk of a single point of failure is still too high, even if you turn it off every day and only turn it on when needed.

For assets that need to be moved frequently, it’s better to use multi-signature. Buy another device and manage a few more private keys; the more redundancies in security, the safer it is. At least aim for a 2-of-3 scheme.

For Ethereum and other EVM chains, there is safe.global, which is very useful. One iPhone with a wallet app acts as one private key, a Mac with a Chrome+ plug-in wallet serves as the second private key, and the third private key can be generated and backed up on the iPhone and then deleted.

This way, unless both your iPhone and Mac have issues simultaneously, the security is greatly enhanced.

For Bitcoin, which generally does not need to be moved frequently, you don’t even need to go on any websites or engage in DeFi; the only use is to deposit and withdraw from exchanges. I feel there isn’t a need for multi-signature across multiple devices here.

I believe this approach is already secure enough: use a Bitcoin Core node wallet, buy a dedicated MacBook to install Bitcoin Core, and add a 2 TB hard drive to download blockchain data. The risk can be reduced to very low levels since Bitcoin is very simple with few attack points.

Although BTC also has multi-signature wallets, I always feel they lack brand recognition, and the native multi-signing scheme in Bitcoin scripts involves too high a technical threshold, making you risk losing your coins as mining fees by mistake.

It is important that the device is dedicated for specific use; do not use your everyday mobile phone or computer to manage your assets. Especially, do not install AI on these devices.

Next, I will share how I think AI can help in managing assets.

2. Let AI Help You Create Custodial Plans

Investing is personalized, and custodial asset plans are also personalized. I used to put in a lot of effort writing about self-managed wallet solutions, but now with AI, those specific plans seem less valuable.

You no longer need to look up other articles for custodial plans; just talk to AI directly.

Clearly explain your situation to AI: how your assets are layered, which ones are frequently used and which ones haven't moved for years; how often you want to move them; which chains are in use; how complex you are willing to accept operations; and how your family can take over in case something happens to you.

Let it generate a plan. Then switch roles and let it act as a person trying to steal your assets and tell you which point of attack is the easiest. Revise and reattack a few times.

We trust AI too much; we can fully authorize our computers to AI, so do not install AI on the computers and phones used for managing assets. This is something you really need to pay special attention to, as AI is very powerful and we are rather vulnerable.

Also, does AI know if my assets are secure?

In my view, it is much safer than letting dealers know when you buy a hardware wallet. Dealers have your name, phone number, address, and have handled the device your private key was generated on. Once you place an order, it cannot be avoided.

In fact, the greatest security is that no one knows you hold assets. This is no longer possible today. Exchanges know, the stores selling devices know, and blockchain addresses are visible to anyone. The only choice you have is: who knows and how much do they know. Trusting AI is better than trusting certain individuals.

3. Let AI Check the Sources of URLs and Apps

Dealing with assets inherently involves various websites, especially when dealing with DeFi, which always requires accessing a multitude of sites.

My previous rule was to verify any website’s domain name against three different information sources. Common sources include official websites like ethereum.org/bitcoin.org or CMC listings; checking Google; looking it up on x.com; and asking truly trusted friends.

Now we have AI; have you asked AI yet?

For verifying domain names, AI excels at this, and using free tools like Gemini, ChatGPT, Grok, or Doubao to check once can serve as an important verification method. It’s best to use a paid tool and increase the reasoning intensity to the highest level when asking.

The same applies to apps. Before downloading a wallet app, take a screenshot of the App Store page and send it to AI for verification; AI will clarify it for you. Make sure to let AI check any Chrome plug-in wallets as well.

The phrasing to ask AI is incredibly simple; just ask if it is legitimate. Whenever I click on any new domain name or download a new app, I always ask AI if it is legitimate.

4. Take a Photo for AI Before Signing

This is the point I most want to share this time.

Actually, for most ordinary transactions, such as transferring coins, authorizing, and interacting with mainstream contracts, the MetaMask signature interface will display the specific meaning of the transaction; if you read carefully before signing, you’ll understand what changes will occur in your wallet after the signature.

Modern wallets explain fields like to, value, data, and nonce very well.

Years ago, it wasn't so convenient; back then, the wallet interface showed a jumble of characters like 00, fff, and 1234 in the signing action interface.

There was a website in 4byte.directory where I used to paste transaction signatures to see what would happen.

If you are still unclear about what a transaction signature is and cannot understand these signature contents and are worried about your transactions, now with AI, it can teach you how to read these.

For the wallet popup interface before signing, take a photo or screenshot and send it to AI for interpretation; rest assured, this interface does not contain your private key or mnemonic phrase, and the content will be publicly available once you confirm the action. AI’s interpretation will clearly inform you what will happen to your transaction after signing, allowing you to know if you are being phished.

I believe using a test wallet and letting AI interpret every step of your operations is truly beneficial. Do not let AI read every screenshot directly in a live environment; I’m only talking about the test wallet; first use AI to learn how to interpret various operations of the wallet.

In a live environment, do not install AI on the phones and computers where your wallet exists; if you must have AI interpret your transaction signature content, please do so via taking photos.

When using the Safe wallet, the Safe wallet itself provides many explanations of transaction content, but when it comes to the MetaMask signing stage, the transaction information can become unclear. If you are apprehensive, you can send that bunch of characters like 00, fff, etc., to AI for interpretation; once interpreted, you'll know what will happen after your transaction signature.

When using Safe, remember that the explanations provided by Safe about transactions are not final; the explanations provided in the MetaMask signature interface are the final ones. The incident with Bybit where funds were stolen originated from the fact that the explanations were tampered with on the safe explanation page, so you must rely on the MetaMask popup's transaction field explanations.

5. Let AI Monitor Security Warnings for You

Another thing you can do with AI is to have it monitor hardware, software, contracts, and platforms you care about for vulnerability reports and security announcements.

Now Grok bot can perfectly monitor x.com; you can have Grok bot monitor your concerned x.com accounts and give it a set of X accounts, like MetaMask, SlowMist, Lido, etc., and let Grok bot watch if they post security-related posts, sending you an email if they do.

Additionally, if you do receive a warning, go verify it through official channels; do not click links in emails or posts. Be careful not to fall for phishing. Of course, sending an AI to verify is also acceptable.

When you make significant financial transfers, take a moment to read this email.

Conclusion

I believe AI will ultimately be benevolent, making our online environment safer.