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Ask HN: Why do people trust Bitcoin to third parties?
Every other day, really every day or twice a day, lately, we hear of bitcoin exchanges, banks, or services getting ripped off for thousands of bitcoins, and just giving up on their users, shutting down, and not reimbursing the "stolen" money.
You can't really tell if it was actually stolen by someone else, or the very service you trusted in.
Why do you trust these people?
What invaluable service do they provide that you can't live without them? Even if it means your bitcoins may end up not being yours anymore.
I ask out of ignorance and skepticism, I'm familiar with bitcoin, but don't own any.
- stevekemp 13y agoSome people do, because they don't know better. Others are trapped by circumstances. For example many users uploaded/stored coins at MtGox, and similar, because they wanted to trade them. But then the sites pulled the rug from under them, by disabling trading - leading to people having coins trapped that they couldn't reclaim.
- px1999 13y agoI'd wager that many of the people who had their money stolen (particularly at gox) aren't what you'd describe as "bitcoin enthusiasts". Less-technical people who have either heard about bitcoin, or who have been gifted some bitcoin are likely going to keep it in whatever service they received it on (many may not even have realised the difference between mtgoxbtc and btc). There's enough FUD out there to scare people who do a little bit of research away from storing the coins in their own wallet - brainwallet passwords being cracked and accounts emptied, viruses taking your wallet.dat, over-paranoid key-generation techniques recommended by the community. Living in the HN//./reddit/whatever else bubble, there's a prevailing attitude that users should be aware of the goings-on in the bitcoin world. We're definitely exposed to those details here. As a result, the reaction seems to be to almost blame the users for the exchange losing their money (to paraphrase, "why would anyone in their right mind trust Mt Gox?"). Personally, I think that this attitude is bullshit, and that technically competent bitcoiners are taking advantage of less-technical people with the rhetoric around how much of a great payment system bitcoin is/how it's a great investment/etc while glossing over the fact that if you aren't good with computers (and want to trust domain experts, or who don't know how to properly secure their own computer), you will be robbed of your money one way or another. That said, perhaps the best answer to your original set of questions is convenience...