The Ledger fiasco was a win for crypto.

The entire Ledger PR disaster was an overall win for crypto. It didn’t expose some new threat, but rather a security vulnerability that has always been there in hardware wallets.

Most, including me, didn’t realize just how much trust we were putting into hardware wallet manufacturers to not be malicious. Obviously I doubt they would be, but the most obvious threat would be government intervention to compel them to be so.

Now we all know what is what now. There is no longer any misconception about hardware wallets being 100% impregnable. We are all aware now that we are potentially one malicious firmware update away from losing our funds or having them confiscated by a government entity if we approve the transaction.

But this is a win for crypto whether people realize it or not. It’s shown a spotlight on a previously overlooked vulnerability in many’s security profiles. That can only be a good thing for this industry.

What will happen now is more rapid evolution towards more secure systems to hold our crypto with. And honestly I think we already have one in multi-signature wallets.

Multi-sig wallets live on-chain and like the name suggests needs multiple signers to access their vaults. The blockchain itself would need to be compromised for multi-sigs to be drained, if I’m understanding it right.

Multi-sigs represent a vastly more secure way of securing funds on chain and you don’t even need to throw out your hardware wallet, but just use it as one of the signers. Having 2 or more hardware wallets from different manufacturers and even a hot wallet, like MetaMask that looks to be heading for community governance, adds a huge extra layer of security as an attacker or malicious government would need to compromise multiple wallets often based in several different countries.

Multi-sigs do have drawbacks though as you have to deploy on on each chain you use. That can get really annoying if you’re an avid Defi user or interact with multiple blockchains. Hopefully in the future with interoperability being toted as the next big thing there will be cross-chain multi-sigs one day. Also Bitcoin doesn’t have a multi-sig capability currently though I am interested if it would be possible with the latest developments towards BRC-20 tokens they’ve had on their chain.

Safe, formerly Gnosis Safe, has a great multi-sig product for EVM-compatible chains. Snowflake and Squads have a good product for Solana. I’m not too familiar with lesser known chain options.

The gist is this: this will lead to more capital looking for more secure options than just a hardware wallet and that will eventually lead to better options for that. I’m sure multi-sig providers have seen an uptick in usage recently. And this will only encourage companies offering these services to build them out further and make them more robust. So in the end this makes crypto better.

Also I plan to continue using Ledger, as they make a great product, but without the illusion of impregnable security that I had before.