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RE: Why Bitcoin will never be as secure as a Bank
Just to be clear. You are not arguing the doom of bitcoin, but the problems with the storage of it - banks vs. wallets. Your arguments are valid, but it is easy to compare a system which matured over hundreds of years with one which is not ten years old. Whatever is happening now with hacking and losing crypto coins are part of the process to mature. For you to assume that crypto must take on the same mature form which worked for fiat banks is wrong. Whatever a mature crypto banking system will be, time will teach us. But I am very sure that when it is mature, it will be superior to the fiat banking system.
The biggest flaw of the banking system, that arose in the middle ages, is its centralisation. While it is true that it is convenient and cheaper to defend all the eggs in one basket, it also means that you can win big if you violate that basket. Cryptocurrencies enable people to dial up or down the centralisation of their financial security according to their needs and risk appetite. Just as it was not so long ago that bank robberies were a common occurance, and really, even now, with electronic banking, the robbers have just moved online. They represent the essence of the problem with the old established banking system. Cryptocurrencies allow the dispersion of the assets in such a way that the big rewards of bank robbery become diminished.
Over time this decentralisation of security will increase. Computers enable the security to be automatically performed by software agents, and simple protocols that do not require advanced training, the training is built into the software. Ultimately cryptocurrencies will lead to everyone being their own bank, because there is no benefit to trusting anyone to protect it, when the cost of individuals protecting their assets falls to zero, where previously, it was much higher.
And that my friend, is what the financial world fears the most. If each person can take care of their own banking needs, they cannot extract value from the value creators anymore!