The key stays inside the device and comes out only to sign a transaction. The selling point is that even a compromised internet-connected computer never sees the key. That defence rests on the key having been generated properly in the first place, so a defect in the device's firmware disables it entirely.
Bear 1
Predictions & track record (1)
Awaiting gradingWhat took $89 million in bitcoin was not a break-in on the walletsScore a hit if the number of addresses drained through this defect rises above 4,585 by the end of September 2026, meaning vulnerable seeds are still in use, and a miss if it does not.