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> Bitcoin is getting stronger and proving to consumers and businesses it is not going away. That's all well and good, but as a consumer, I want some level of p

> Bitcoin is getting stronger and proving to consumers and businesses it is not going away. That's all well and good, but as a consumer, I want some level of protection. With credit cards and my bank account, if some entity (myself included) makes stupid decisions and causes me to lose money due to digital theft, my credit card/bank will often take care of the issue. With BitCoin, and the failure of Mt. Gox, consumers have no recourse (at least as far as I can tell). EDIT TO ADD: I'm not sure what problems BitCoin solves for me, as a consumer. I hate that PayPal can "lock" me out of my account, so I don't use it. BankOfAmerica, can, but usually will only do so for extreme circumstances (ie asset seizing and forfeiture). I hate that Banks charge a fee for the privilege of storing my money in it, but there are enough banks/credit unions that offer services for free. This article leaves open several issues by likening BitCoin to email. Great that email is a protocol. But what happens when Gmail fails? At this point GMail is too big to fail, and I for one am glad that Google, with it's resources and very talented engineers are backing it. > New technologies take time to mature. Granted. BitCoin is very sophisticated, and it's clearly valuable. But, this is my hard earned cashtro we're talking about, and I don't want to put it into "immature" technology. Again, as a consumer, my confidence is a real material thing when dealing with financial institutions.

SilasX 13y ago
Just like you'll wait until physical cash has mugger protections before using it?
- danhak 13y ago
  Great strawman. Parent post didn't mention physical cash. He mentioned credit cards, which have chargeback/purchase protection, and bank accounts, which have deposit insurance.
  - SilasX 13y ago
    That's not what strawman means, and the point is that different measures protect you from different things and you shouldn't fault one for not protecting against others (outside its "threat model"). Paper dollars are designed to protect against counterfeit. That's all. To protect against muggers requires either a) sacrificing the desirable properties of paper dollars, or b) use of a separate security layer (vaults, safes, holding little at a time on you, etc). In no case are those limitations a failing of the paper dollar itself. They likewise don't themselves protect against someone convincing you to give them your paper dollars under false pretenses. Same points apply: to handle that threat, you rely on laws, trust networks, escrows (like credit card arbitration) etc. Still not a problem with the dollar, just outside its threat model. I made the previous comment in the hopes of compressing that point into one sentence. Perhaps I failed, but at no point did I misattribute a position to the GGP. "Your position implies X" != "you are advocating X" ... even and especially if you're not advocating X!
    - danhak 13y ago
      The original post's point was that conventional banks and credit cards offer consumer protection. Your response was that physical cash offers no consumer protection. So you either misunderstood or misrepresented the original point.
      - SilasX 13y ago
        The original point was that 3rd party services can offer consumer protection. My point was that they can do this to bitcoin too. What did I misunderstand?
- deleted 13y ago
  [deleted]
- CJefferson 13y ago
  I would never carry around, or own, more than a couple of hundred pounds worth of physical cash or bitcoin at a time.
- balls187 13y ago
  I have a blue belt in Krav Maga. I am my own mugger protection.
  - pavel_lishin 13y ago
    I hope that belt is bullet- and knife-proof, and wraps your entire body. My mugger protection is throwing my wallet south, and running north.
    - balls187 13y ago
      I hope you can run faster than a bullet. Otherwise you'll die tired. What if your kid was with you? Your girlfriend/boyfriend/significant other? You just gonna take off running and hope for the best?
- aroch 13y ago
  Bitcoin are also vulnerable to physical theft and the OP isn't talking about physical theft of currency -- I'm pretty sure you know that and are electing to be snarky in spite of that. A credit/debit card when stolen, regardless of physical or electronic purloining, is backed by a set of consumer protection laws, regulations and policies -- some obviously required by government but some provided without legal obligation. Further a bank account, a brokerage account or any number of real money stores are insured against theft and loss (bankruptcy). BTC are not.
- patmcc 13y ago
  "Physical cash" stored at a third-party like a bank or credit union does have mugger protections - they have safes and vaults and security guards and insurance. If a bitcoin "wallet" service opened that offered those things, consumers would be more likely to take it seriously. Putting a fortune into Mt. Gox or someone similar is like burying your cash in someone else's backyard. You don't need mugger protection, you need common sense.
  - balls187 13y ago
    So the question remains: Is there a bitcoin wallet that offers such a guarantee? The Federal Government has up to $100,000 for deposits. Banks themselves will provide funds bank in case of fraud, to increase consumer confidence. Credit Cards have a number of consumer guarantees (for example, did you know if you purchase an item with a credit card, the credit card company will extend the warranty of the item in many cases--read the fine print). As another commenter said, yes I'm "paying" for that insurance by giving up some amount of control, but I think before BitCoin or another decentralized currency can reach critical mass, it will need service providers to offer similar protections. My opinion, anyway.
  - SilasX 13y ago
    >"Physical cash" stored at a third-party like a bank or credit union does have mugger protections - they have safes and vaults and security guards and insurance. If a bitcoin "wallet" service opened that offered those things, consumers would be more likely to take it seriously. Indeed. But you wouldn't fault the paper dollar itself for failing to have the protections of the vault, just as you shouldn't fault the Bitcoin itself for failing to have he protections of escrow, nor compare a paper apple to a vaulted orange. Yes, 3rd party services will help with the trust issue in the Bitcoin ecosystem. They are still not a failing of Bitcoin per se, just as lack of built in mugger protections is not a failure of the paper dollar per se.
- pseut 13y ago
  I think you're looking for the phrase "debit card."
sosborn 13y ago
It will be interesting to see if/how this evolves. It popularity is being driven (at least partly) by the "not controlled by a bank" aspect of it, but we are seeing that it is a double-edged sword. Is it possible to find a happy medium between traditional banking/currency systems? Will something similar to FDIC come to bitcoin, and if it does, will it be via private industry or government regulation?
dlsx 13y ago
This is going to be the general public perception, and their pdf documenting this would set bitcoin back possibly 5 years is accurate I believe. Already, for most people bitcoin does not meet a level of security in terms of recourse* Until bitcoin has a proper centralized method of recovering stolen bitcoins it will remain to be seen as an unsafe investment.
canvia 13y ago
You want to choose to pay insurance for security. That is fine and a valid option. Other people want to choose to accept responsibility for their own security and lose the overhead from all the regulation and insurance. This is the concept of libertarianism and bitcoin. The problem is that a small group of individuals wants to force everyone to purchase their insurance and security, and they are fighting tooth and nail to make that the only available option. This is not a free market. This is not an efficient market. It is a corrupt artificially created monopoly.
- balls187 13y ago
  Perhaps it fails in that it's less efficient than an open unregulated market. And it's a monopoly. But outside of economic theory and beliefs, how is that necessarily a bad thing? The US Dollar is a single currency, so it is a monopoly, but it has allowed for the growth of interstate commerce, as opposed to allowing any institution to use it's own currency. The Euro is another example--now I know many of my EU brethren may not be happy by the Euro, but as a consumer, using a single currency while in Europe has distinct advantages.

SilasX 13y ago

Just like you'll wait until physical cash has mugger protections before using it?

danhak 13y ago
Great strawman. Parent post didn't mention physical cash. He mentioned credit cards, which have chargeback/purchase protection, and bank accounts, which have deposit insurance.
- SilasX 13y ago
  That's not what strawman means, and the point is that different measures protect you from different things and you shouldn't fault one for not protecting against others (outside its "threat model"). Paper dollars are designed to protect against counterfeit. That's all. To protect against muggers requires either a) sacrificing the desirable properties of paper dollars, or b) use of a separate security layer (vaults, safes, holding little at a time on you, etc). In no case are those limitations a failing of the paper dollar itself. They likewise don't themselves protect against someone convincing you to give them your paper dollars under false pretenses. Same points apply: to handle that threat, you rely on laws, trust networks, escrows (like credit card arbitration) etc. Still not a problem with the dollar, just outside its threat model. I made the previous comment in the hopes of compressing that point into one sentence. Perhaps I failed, but at no point did I misattribute a position to the GGP. "Your position implies X" != "you are advocating X" ... even and especially if you're not advocating X!
  - danhak 13y ago
    The original post's point was that conventional banks and credit cards offer consumer protection. Your response was that physical cash offers no consumer protection. So you either misunderstood or misrepresented the original point.
    - SilasX 13y ago
      The original point was that 3rd party services can offer consumer protection. My point was that they can do this to bitcoin too. What did I misunderstand?
deleted 13y ago
[deleted]
CJefferson 13y ago
I would never carry around, or own, more than a couple of hundred pounds worth of physical cash or bitcoin at a time.
balls187 13y ago
I have a blue belt in Krav Maga. I am my own mugger protection.
- pavel_lishin 13y ago
  I hope that belt is bullet- and knife-proof, and wraps your entire body. My mugger protection is throwing my wallet south, and running north.
  - balls187 13y ago
    I hope you can run faster than a bullet. Otherwise you'll die tired. What if your kid was with you? Your girlfriend/boyfriend/significant other? You just gonna take off running and hope for the best?
aroch 13y ago
Bitcoin are also vulnerable to physical theft and the OP isn't talking about physical theft of currency -- I'm pretty sure you know that and are electing to be snarky in spite of that. A credit/debit card when stolen, regardless of physical or electronic purloining, is backed by a set of consumer protection laws, regulations and policies -- some obviously required by government but some provided without legal obligation. Further a bank account, a brokerage account or any number of real money stores are insured against theft and loss (bankruptcy). BTC are not.
patmcc 13y ago
"Physical cash" stored at a third-party like a bank or credit union does have mugger protections - they have safes and vaults and security guards and insurance. If a bitcoin "wallet" service opened that offered those things, consumers would be more likely to take it seriously. Putting a fortune into Mt. Gox or someone similar is like burying your cash in someone else's backyard. You don't need mugger protection, you need common sense.
- balls187 13y ago
  So the question remains: Is there a bitcoin wallet that offers such a guarantee? The Federal Government has up to $100,000 for deposits. Banks themselves will provide funds bank in case of fraud, to increase consumer confidence. Credit Cards have a number of consumer guarantees (for example, did you know if you purchase an item with a credit card, the credit card company will extend the warranty of the item in many cases--read the fine print). As another commenter said, yes I'm "paying" for that insurance by giving up some amount of control, but I think before BitCoin or another decentralized currency can reach critical mass, it will need service providers to offer similar protections. My opinion, anyway.
- SilasX 13y ago
  >"Physical cash" stored at a third-party like a bank or credit union does have mugger protections - they have safes and vaults and security guards and insurance. If a bitcoin "wallet" service opened that offered those things, consumers would be more likely to take it seriously. Indeed. But you wouldn't fault the paper dollar itself for failing to have the protections of the vault, just as you shouldn't fault the Bitcoin itself for failing to have he protections of escrow, nor compare a paper apple to a vaulted orange. Yes, 3rd party services will help with the trust issue in the Bitcoin ecosystem. They are still not a failing of Bitcoin per se, just as lack of built in mugger protections is not a failure of the paper dollar per se.
pseut 13y ago
I think you're looking for the phrase "debit card."

sosborn 13y ago

It will be interesting to see if/how this evolves. It popularity is being driven (at least partly) by the "not controlled by a bank" aspect of it, but we are seeing that it is a double-edged sword. Is it possible to find a happy medium between traditional banking/currency systems? Will something similar to FDIC come to bitcoin, and if it does, will it be via private industry or government regulation?

dlsx 13y ago

This is going to be the general public perception, and their pdf documenting this would set bitcoin back possibly 5 years is accurate I believe. Already, for most people bitcoin does not meet a level of security in terms of recourse* Until bitcoin has a proper centralized method of recovering stolen bitcoins it will remain to be seen as an unsafe investment.

canvia 13y ago

You want to choose to pay insurance for security. That is fine and a valid option. Other people want to choose to accept responsibility for their own security and lose the overhead from all the regulation and insurance. This is the concept of libertarianism and bitcoin. The problem is that a small group of individuals wants to force everyone to purchase their insurance and security, and they are fighting tooth and nail to make that the only available option. This is not a free market. This is not an efficient market. It is a corrupt artificially created monopoly.

balls187 13y ago
Perhaps it fails in that it's less efficient than an open unregulated market. And it's a monopoly. But outside of economic theory and beliefs, how is that necessarily a bad thing? The US Dollar is a single currency, so it is a monopoly, but it has allowed for the growth of interstate commerce, as opposed to allowing any institution to use it's own currency. The Euro is another example--now I know many of my EU brethren may not be happy by the Euro, but as a consumer, using a single currency while in Europe has distinct advantages.