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Oh dear - this should be interesting. Seems like it is good advice not to invest more in Bitcoin than you can comfortably lose...

ryanlol 10y ago
>Seems like it is good advice not to invest more in Bitcoin than you can comfortably lose... Not losing bitcoin isn't any harder than not losing cash. Problem here is people storing their coins with unqualified third parties.
- mikeash 10y ago
  I'd say it's a little harder than not losing cash. If you put cash in a safe, you can be confident that an attacker can't take the cash without getting into the safe. If you put bitcoin in a safe, an attacker can take it without ever getting into the safe if you happened to forget about a copy of your private key somewhere else.
  - ryanlol 10y ago
    Surely you would generate a new key to put in the safe if you had to worry about that. And anyway, robbing safes is easy. But try emptying a bitcoin wallet encrypted with a good password, it's very easy to make impossible.
    - russelluresti 10y ago
      Nothing is impossible in the digital realm. And the bad guys are ALWAYS better than the good guys.
    - mikeash 10y ago
      Surely, but that requires more knowledge and care than securing cash.
      - ryanlol 10y ago
        Producing a long random string to use as a password? Not particularly.
        mikeash 10y ago
        Most people have no idea what a long random string would even look like.
        ryanlol 10y ago
        I think you're seriously underestimating most people. "Long random string [of letters and numbers]" is rather self-explanatory.
        mikeash 10y ago
        I think you're seriously overestimating most people's ability to think when presented with anything remotely computerish.
        bdcravens 10y ago
        Dealing with nondevelopers, never say "string". Did that once and the person on the other end of the phone was obviously confused. After 2 seconds, realized how bizarre it sounded.
    - bdcravens 10y ago
      > a bitcoin wallet encrypted with a good password, it's very easy to make impossible There's the problem with adoption. "SFYL you should have been smarter" means there will always be a % of the population who should never use it.
- russelluresti 10y ago
  Not quite true. If you're talking physical cash, a person would have to get to the physical location to take it (as opposed to being available to everyone in the world with an internet connection). If you're talking digital cash in a bank, most banks have a form of insurance that will cover your losses (for example, most US banks are FDIC insured and cover up to $250,000 USD in losses). Stock assets may be the closest comparison, as brokerage firms aren't backed by an independent agency, and losses that occur from cyber-theft would only be reimbursed if the firm wanted to.
  - jzwinck 10y ago
    Stock trading accounts in the US are backed by the SIPC up to $500k (even for non-US persons). This protects you from an all-out insolvency of the institution, which would happen if somehow they had all their money stolen by hackers. But it does not protect you from hacking of your individual account. If someone tricks your broker/custodian into selling your stocks and wiring them the money, SIPC (perhaps surprisingly) will not save you. See: http://www.reuters.com/article/us-investing-hackedaccounts-idUSTRE8151UN20120206 http://www.reuters.com/article/us-investing-hackedaccounts-i...
- Lerc 10y ago
  How does one determine a qualified third party? Obviously you can't go with "You can trust us, we know what we're doing" You could find a party that is endorsed by someone going "You can trust them, They know what they are doing, Trust us on this, we know what we're doing" But that just moves the point of concern. Is there yet any "You can trust them, if we are wrong about that we will cover your losses" insurance. (even then how can you be certain they will follow through)
  - sixhobbits 10y ago
    "quis custodiet ipse custodies" (who guards the guards themselves) by Juvenal in the first century seems to be the root cause of so many modern issues - from finance, to politics, to automatic server monitoring.
  - ryanlol 10y ago
    >How does one determine a qualified third party? Surely you wouldn't store your cash in a bitcoin exchange? It's not a bank. With bitcoin you don't even necessarily need a third party, a hardware wallet could do just fine. That can be stored in a safety deposit box if you feel like it. >Is there yet any "You can trust them, if we are wrong about that we will cover your losses" insurance. (even then how can you be certain they will follow through) While you can certainly insure anything if you pay enough, I don't think there's anyone publicly offering that in the crypto space. But then there doesn't seem to exist a similar mechanism for USD accounts of any significant size either.
viraptor 10y ago
It is good advice not to invest more in anything than you can comfortably lose.
- flashman 10y ago
  Seriously, even gamers playing Eve Online know this.

ryanlol 10y ago

>Seems like it is good advice not to invest more in Bitcoin than you can comfortably lose... Not losing bitcoin isn't any harder than not losing cash. Problem here is people storing their coins with unqualified third parties.

mikeash 10y ago
I'd say it's a little harder than not losing cash. If you put cash in a safe, you can be confident that an attacker can't take the cash without getting into the safe. If you put bitcoin in a safe, an attacker can take it without ever getting into the safe if you happened to forget about a copy of your private key somewhere else.
- ryanlol 10y ago
  Surely you would generate a new key to put in the safe if you had to worry about that. And anyway, robbing safes is easy. But try emptying a bitcoin wallet encrypted with a good password, it's very easy to make impossible.
  - russelluresti 10y ago
    Nothing is impossible in the digital realm. And the bad guys are ALWAYS better than the good guys.
  - mikeash 10y ago
    Surely, but that requires more knowledge and care than securing cash.
    - ryanlol 10y ago
      Producing a long random string to use as a password? Not particularly.
      - mikeash 10y ago
        Most people have no idea what a long random string would even look like.
        ryanlol 10y ago
        I think you're seriously underestimating most people. "Long random string [of letters and numbers]" is rather self-explanatory.
        mikeash 10y ago
        I think you're seriously overestimating most people's ability to think when presented with anything remotely computerish.
        bdcravens 10y ago
        Dealing with nondevelopers, never say "string". Did that once and the person on the other end of the phone was obviously confused. After 2 seconds, realized how bizarre it sounded.
  - bdcravens 10y ago
    > a bitcoin wallet encrypted with a good password, it's very easy to make impossible There's the problem with adoption. "SFYL you should have been smarter" means there will always be a % of the population who should never use it.
russelluresti 10y ago
Not quite true. If you're talking physical cash, a person would have to get to the physical location to take it (as opposed to being available to everyone in the world with an internet connection). If you're talking digital cash in a bank, most banks have a form of insurance that will cover your losses (for example, most US banks are FDIC insured and cover up to $250,000 USD in losses). Stock assets may be the closest comparison, as brokerage firms aren't backed by an independent agency, and losses that occur from cyber-theft would only be reimbursed if the firm wanted to.
- jzwinck 10y ago
  Stock trading accounts in the US are backed by the SIPC up to $500k (even for non-US persons). This protects you from an all-out insolvency of the institution, which would happen if somehow they had all their money stolen by hackers. But it does not protect you from hacking of your individual account. If someone tricks your broker/custodian into selling your stocks and wiring them the money, SIPC (perhaps surprisingly) will not save you. See: http://www.reuters.com/article/us-investing-hackedaccounts-idUSTRE8151UN20120206 http://www.reuters.com/article/us-investing-hackedaccounts-i...
Lerc 10y ago
How does one determine a qualified third party? Obviously you can't go with "You can trust us, we know what we're doing" You could find a party that is endorsed by someone going "You can trust them, They know what they are doing, Trust us on this, we know what we're doing" But that just moves the point of concern. Is there yet any "You can trust them, if we are wrong about that we will cover your losses" insurance. (even then how can you be certain they will follow through)
- sixhobbits 10y ago
  "quis custodiet ipse custodies" (who guards the guards themselves) by Juvenal in the first century seems to be the root cause of so many modern issues - from finance, to politics, to automatic server monitoring.
- ryanlol 10y ago
  >How does one determine a qualified third party? Surely you wouldn't store your cash in a bitcoin exchange? It's not a bank. With bitcoin you don't even necessarily need a third party, a hardware wallet could do just fine. That can be stored in a safety deposit box if you feel like it. >Is there yet any "You can trust them, if we are wrong about that we will cover your losses" insurance. (even then how can you be certain they will follow through) While you can certainly insure anything if you pay enough, I don't think there's anyone publicly offering that in the crypto space. But then there doesn't seem to exist a similar mechanism for USD accounts of any significant size either.

viraptor 10y ago

It is good advice not to invest more in anything than you can comfortably lose.

flashman 10y ago
Seriously, even gamers playing Eve Online know this.