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Yes, right now using these online wallets is not really an option if you are at all concerned about your bitcoins. But it will be in the future. Because online

Yes, right now using these online wallets is not really an option if you are at all concerned about your bitcoins. But it will be in the future. Because online wallets are not less secure than an E-Banking account at a conventional bank. The difference is that banks spend a lot more money on security than the current online wallet operators (think penetration testing, code review, dedicated security staff, option to have two-factor authentication etc).

fusiongyro 14y ago
You make strong points, but (and without wanting to rehash some tedious arguments) there is still the fundamental difference that "e-banking" is not dealing with "e-cash" the way Bitcoin is "e-cash." Different members of the audience perceive this variously as a benefit or a drawback, but either way it will complicate security.
tempaccount9473 14y ago
> Because online wallets are not less secure than an E-Banking account at a conventional bank. Nope. Look at everything you can do with your online bank account. Transfers to other accounts, wires, bill pay, stop payments, ACH (if you're lucky), etc. What's the common there? All those transaction are reversable. This makes it hard for hackers to steal money from banks, they need an unwitting third party (mule) to accept an account transfer, and then go to a branch or ATM to withdraw cash. So it's not like your online banking accounts are secure, you can purchase any number of stolen online banking credentials from trojan/botnet operators. The price for those accounts is quite low, because the real effort is in finding unwitting mules. The problem with bitcoin, is that bitcoin transfers are irreversable. So banks will never be able to protect bitcoin wallets effectively, because they can't rely on being able to reverse transactions for compromised accounts.
- itcmcgrath 14y ago
  Excellent points. I worked in a bank designing systems at one point. Even with methods to retrieve money lost through fraudulent transactions, they still had monthly 'Fraud' budgets much larger than my salary for money they couldn't retrieve. Imagine BTC services 'Fraud Budget' when all transactions are non-reversible. Banks do have a massive advantage in 'Practical' security as well in the form of a 'big stick' aided by the government. Since the practical risks of fraud against a bank are much higher than fraud against an online BTC service (who is the FBI more likely to help), the exposure would be much bigger.
- mootothemax 14y ago
  Do banks regularly buy lists of their own compromised accounts? If not, why? Surely it'd be cheaper in the long run?
  - Nursie 14y ago
    Surely that would be encouraging the market ?!

fusiongyro 14y ago

You make strong points, but (and without wanting to rehash some tedious arguments) there is still the fundamental difference that "e-banking" is not dealing with "e-cash" the way Bitcoin is "e-cash." Different members of the audience perceive this variously as a benefit or a drawback, but either way it will complicate security.

tempaccount9473 14y ago

> Because online wallets are not less secure than an E-Banking account at a conventional bank. Nope. Look at everything you can do with your online bank account. Transfers to other accounts, wires, bill pay, stop payments, ACH (if you're lucky), etc. What's the common there? All those transaction are reversable. This makes it hard for hackers to steal money from banks, they need an unwitting third party (mule) to accept an account transfer, and then go to a branch or ATM to withdraw cash. So it's not like your online banking accounts are secure, you can purchase any number of stolen online banking credentials from trojan/botnet operators. The price for those accounts is quite low, because the real effort is in finding unwitting mules. The problem with bitcoin, is that bitcoin transfers are irreversable. So banks will never be able to protect bitcoin wallets effectively, because they can't rely on being able to reverse transactions for compromised accounts.

itcmcgrath 14y ago
Excellent points. I worked in a bank designing systems at one point. Even with methods to retrieve money lost through fraudulent transactions, they still had monthly 'Fraud' budgets much larger than my salary for money they couldn't retrieve. Imagine BTC services 'Fraud Budget' when all transactions are non-reversible. Banks do have a massive advantage in 'Practical' security as well in the form of a 'big stick' aided by the government. Since the practical risks of fraud against a bank are much higher than fraud against an online BTC service (who is the FBI more likely to help), the exposure would be much bigger.
mootothemax 14y ago
Do banks regularly buy lists of their own compromised accounts? If not, why? Surely it'd be cheaper in the long run?
- Nursie 14y ago
  Surely that would be encouraging the market ?!