When that trust turns out to be misplaced, there is no recourse. If your bitcoin exchange gets hacked, you lose all of your money. If your bitcoin wallet gets h

When that trust turns out to be misplaced, there is no recourse. If your bitcoin exchange gets hacked, you lose all of your money. If your bitcoin wallet gets hacked, you lose all of your money. If you forget your login credentials, you lose all of your money. If there's a bug in the code of your smart contract, you lose all of your money. If someone successfully hacks the blockchain security, you lose all of your money. In many ways, trusting technology is harder than trusting people. Would you rather trust a human legal system or the details of some computer code you don't have the expertise to audit? Most of these things have nothing to do with "blockchain" or Bitcoin. Exchanges are outside the scope - entirely. They are merely one kind of merchant. "Wallets" are also outside the scope, because the protocol only knows about scripts. Login credentials play no role whatsoever in Bitcoin - that's an add-on provided by third parties. Bugs in contract code are a problem. That's why you don't trust it. You verify it - just like you read any contract you sign. "Hacking blockchain security" is another matter. What Schneier is referring to is the Ethereum Classic majority hash rate attack. That's a well-known limitation of all block chains. Satoshi's white paper deals with it extensively and quantitatively. It's not like Schneier has stumbled onto something novel here. These four elements work together to enable trust. Take banking, for example. Financial institutions, merchants, and individuals are all concerned with their reputations, which prevents theft and fraud. The laws and regulations surrounding every aspect of banking keep everyone in line, including backstops that limit risks in the case of fraud. And there are lots of security systems in place, from anti-counterfeiting technologies to internet-security technologies. The nativity here beggars belief. Does this man not remember 2008? Does he not remember HSBC? Does he not know that the individuals responsible for the most egregious bank fraud have never been punished in a criminal sense? Does he not remember the vast amounts of sensitive, personal information leaked by these institutions? Has he never heard of the massive, unconstitutional civil asset forfeiture problem in the US? The best you can say about the banking system is that laws/regulations may inhibit, to some degree, some forms of theft and fraud.