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Bitcoins are a digital currency without a bank. If you kept all your money in cash at your house, and failed to secure your house, then someone could steal it.

Bitcoins are a digital currency without a bank. If you kept all your money in cash at your house, and failed to secure your house, then someone could steal it. Sure, you could try to catch them based on the evidence they leave behind (fingerprints for cash, logfiles for bitcoin wallets), but once they have the cash, it's nearly untraceable. But if you have banks that store Bitcoins for you, then you're trusting their security processes, not your own. We don't have Bitcoin banks yet. For BC users, maybe that's worth looking into.

cookiecaper 15y ago
It actually would not necessarily be difficult to trace the thief of your bitcoins. All btc transactions are logged publicly; a victim can watch the blockchain and record every address that receives his stolen coins, and this may produce good leads as to the thief's identity.
ssharp 15y ago
I've read this real-life money / storing all your money at your house analogy a few times related to BitCoin. It seems disingenuous. There are just too many physical things that separate the dangers of BitCoin and hoarding money somewhere in your house. - I don't have to worry about 6,500,000,000 people having access to my house. At most, there is a market of around a million or so who would live in close enough proximately to me. - I don't have thousands of people across the world tapping on my windows to find out how easy they are to break into. - I'd trust the chances of a local thief being caught more than a hacker across the globe stealing BitCoins being caught. I could go on and on. Right now, the BitCoin landscape is like the Wild West, probably even worse. Systems simply aren't in place to really protect people, and you have the potential to steal from anyone in the entire world. In real currencies, we have systems in place to protect holders. In the U.S. we have the FDIC, which insures bank accounts up to a certain amount. This insurance incentives people to keep their money in banks instead of the house because it's safe (both physically safe from theft and safe from bank failure). My understanding is that there are BitCoin "banks" but there is nothing guaranteeing these deposits. There are also established systems in place to help prevent theft. Police departments, close physical proximity to others (neighbors being able to see odd activities), etc. to prevent thefts.

cookiecaper 15y ago

It actually would not necessarily be difficult to trace the thief of your bitcoins. All btc transactions are logged publicly; a victim can watch the blockchain and record every address that receives his stolen coins, and this may produce good leads as to the thief's identity.

ssharp 15y ago

I've read this real-life money / storing all your money at your house analogy a few times related to BitCoin. It seems disingenuous. There are just too many physical things that separate the dangers of BitCoin and hoarding money somewhere in your house. - I don't have to worry about 6,500,000,000 people having access to my house. At most, there is a market of around a million or so who would live in close enough proximately to me. - I don't have thousands of people across the world tapping on my windows to find out how easy they are to break into. - I'd trust the chances of a local thief being caught more than a hacker across the globe stealing BitCoins being caught. I could go on and on. Right now, the BitCoin landscape is like the Wild West, probably even worse. Systems simply aren't in place to really protect people, and you have the potential to steal from anyone in the entire world. In real currencies, we have systems in place to protect holders. In the U.S. we have the FDIC, which insures bank accounts up to a certain amount. This insurance incentives people to keep their money in banks instead of the house because it's safe (both physically safe from theft and safe from bank failure). My understanding is that there are BitCoin "banks" but there is nothing guaranteeing these deposits. There are also established systems in place to help prevent theft. Police departments, close physical proximity to others (neighbors being able to see odd activities), etc. to prevent thefts.