Artificial intelligence is rapidly changing cybersecurity, and a recent experiment involving a Bitcoin hardware wallet demonstrates just how quickly AI can identify software vulnerabilities. Researchers reported that the AI model GLM 5.2 rediscovered the flaw behind the recent ColdCard wallet incident in around 20 minutes at a cost of approximately $2. While there is no evidence that cybercriminals used AI in the original theft, the experiment highlights how inexpensive AI-assisted code analysis has become.

According to Dragonfly managing partner Haseeb Qureshi, the most significant takeaway was the cost. “GLM 5.2 running for 20 minutes costs about $2. So what does that mean? It means we are in a new world.”

AI Is Making Security Audits Faster and Cheaper

Traditionally, finding vulnerabilities in cryptographic software required experienced security researchers spending days or even weeks reviewing firmware, source code, and cryptographic implementations. AI models can now perform an initial review across large codebases in a fraction of the time.

According to Qureshi, researchers directed multiple AI models to inspect the affected software after the ColdCard incident had already become public. The models were reportedly not told where the vulnerability existed, yet GLM 5.2 identified the underlying weakness in roughly 20 minutes.

However, rediscovering a vulnerability is not the same as carrying out an attack. Exploiting such a flaw still requires identifying affected devices, reconstructing usable private keys, locating valuable wallets, and successfully transferring funds before users or manufacturers can respond.

The experiment therefore demonstrates AI's growing ability to assist security research rather than proving that AI played any role in the original theft.

Also Read: Coldcard Wallet Hack Tops $100 Million Across 7,300 Addresses

Security Teams Face a New Arms Race

The findings also highlight a shift in how cryptocurrency security may evolve. Much of the industry's long-term focus has been on quantum computing, which could eventually threaten Bitcoin's cryptographic foundations. AI presents a more immediate challenge because it can already identify mistakes in wallet firmware, random-number generation, key management, and cryptographic implementations without breaking Bitcoin's underlying encryption.

According to Qureshi, the affected users were “People who are doing all the right things.” Even users storing assets in offline hardware wallets remain dependent on the quality of the wallet's firmware and cryptographic implementation. If private keys are generated using weak randomness, keeping a device offline cannot strengthen those keys afterward.

For developers, AI represents both a defensive and offensive tool. Wallet manufacturers can repeatedly scan legacy firmware as newer AI models become available, while attackers can automate vulnerability discovery across older software releases at minimal cost.

The experiment underscores an important lesson for the cryptocurrency industry: security reviews can no longer be treated as one-time events. As AI models become faster, cheaper, and more capable, continuous code auditing, responsible disclosure programs, and rapid patch deployment will become essential for protecting digital assets.

FAQs:

1. What did the GLM 5.2 AI model accomplish?

According to researchers, GLM 5.2 successfully rediscovered the software vulnerability linked to the recent ColdCard wallet incident in around 20 minutes. The exercise demonstrated AI's ability to quickly identify known security flaws at a very low cost.

2. Did AI play a role in the original ColdCard theft?

No. There is currently no evidence that attackers used AI during the original theft. The experiment was conducted afterward to evaluate whether a modern AI model could independently identify the same vulnerability.

3. Why is the reported $2 cost significant?

The low cost shows that AI-assisted vulnerability research is becoming accessible to far more developers and researchers. It also means attackers could potentially scan many software projects for weaknesses without investing significant resources.

4. Can AI break Bitcoin's cryptography?

No. The experiment did not demonstrate that AI can break Bitcoin's underlying cryptographic algorithms. Instead, it showed that AI can help identify implementation bugs in wallet software, firmware, and cryptographic code surrounding Bitcoin.

5. How can crypto developers use AI to improve security?

Developers can use AI to scan source code before release, re-audit older firmware as AI models improve, identify potential vulnerabilities faster, and support bug bounty programs. Human security experts are still required to verify findings and deploy secure fixes.