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A substantial volume of low-level fraud occurs every day and is baked into the cost of doing business because that costs less than reengineering fundamentally i

A substantial volume of low-level fraud occurs every day and is baked into the cost of doing business because that costs less than reengineering fundamentally insecure systems. A system where you can pull money by knowing a set of "secret" numbers shared with every entity an account holder has ever done business with is just insane to begin with. We rely on reading transactions after the fact looking for red flags. You can beat the filters sometimes by running millions of credit cards. You can't really expect to move $100 billion from an investment bank to your checking account without anyone noticing and using their central authority to reverse the transaction.

ufmace 12y ago
There's some truth to all that, but I'd say it's kind of another point. We don't have and never really did have a logically secure finance system. We have a human-secured finance system instead, where for virtually every transaction, there is a human somewhere who has the power to review and reverse it. It seems clumsy to the programmer's mind, but it largely works pretty well. I don't think we even have a really solid idea what a logically secure financial system would look like, how to build it, or if it's practical. Bitcoin seems to be the closest and most practical thing we have so far to that. While Bitcoin is cool and interesting in a lot of ways, the practical security of it leaves much to be desired, based on the observed results so far.