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The security problem in a Bitcoin world is real though: The "instant" settlement is equally instantaneous, and equally non reversible, when someone has access t

by hibikir 11y ago

The security problem in a Bitcoin world is real though: The "instant" settlement is equally instantaneous, and equally non reversible, when someone has access to a private key. At the same time, if I lose the key, the coins are gone. So instead of being afraid of everyone else's credit worthiness, we now need Fort Knox level security, and any breach of said security means losing everything, permanently. It's like keeping savings inside a mattress, except people can use automated to try to hack into everyone's mattresses. You can have a different opinion of course, but seeing how even Bitcoin exchanges get hacked all the time, it seems to me that the traditional banking system is far less risky.

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pmorici 11y ago
The difference is you have no control over counter party risk you can only choose to accept it or not. You can do a a lot of simple things to prevent your Bitcoin from being stolen. The security problem with Bitcoin is largely a myth boosted by people and companies that were paying little to no attention to security or who were outright dishonest. People who kept their Bitcoins on deposit with exchanges. didn't own Bitcoin they put themselves in a position of being a Bitcoin creditor of an exchange.
- ryanjshaw 11y ago
  Regularly improving regulatory requirements protect the average person on the street from the majority of material risks. Cryptocurrencies have no such protection. Banking systems were not forced on the world; they evolved to solve real problems, and continue to evolve. It's is unreasonable to dismiss the structure of these institutions without a deeper discussion considering the reasons for complexity and where the industry is headed. I believe that cryptocurrencies may present some improvement in the status quo at some point in the future, but not until there is more regulation (through government and/or through private contracts enforceable by civil law).
icebraining 11y ago
So instead of being afraid of everyone else's credit worthiness, we now need Fort Knox level security, and any breach of said security means losing everything, permanently. It's like keeping savings inside a mattress, except people can use automated to try to hack into everyone's mattresses. No, you just need the mechanism we generally use when our assets might be stolen or lost: insurance. This is also one of the services provided by banks, in that bundle they call an "account".

by hibikir 11y ago

deleted 11y ago

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pmorici 11y ago

The difference is you have no control over counter party risk you can only choose to accept it or not. You can do a a lot of simple things to prevent your Bitcoin from being stolen. The security problem with Bitcoin is largely a myth boosted by people and companies that were paying little to no attention to security or who were outright dishonest. People who kept their Bitcoins on deposit with exchanges. didn't own Bitcoin they put themselves in a position of being a Bitcoin creditor of an exchange.

ryanjshaw 11y ago
Regularly improving regulatory requirements protect the average person on the street from the majority of material risks. Cryptocurrencies have no such protection. Banking systems were not forced on the world; they evolved to solve real problems, and continue to evolve. It's is unreasonable to dismiss the structure of these institutions without a deeper discussion considering the reasons for complexity and where the industry is headed. I believe that cryptocurrencies may present some improvement in the status quo at some point in the future, but not until there is more regulation (through government and/or through private contracts enforceable by civil law).

icebraining 11y ago

So instead of being afraid of everyone else's credit worthiness, we now need Fort Knox level security, and any breach of said security means losing everything, permanently. It's like keeping savings inside a mattress, except people can use automated to try to hack into everyone's mattresses. No, you just need the mechanism we generally use when our assets might be stolen or lost: insurance. This is also one of the services provided by banks, in that bundle they call an "account".