RE: Why Bitcoin will never be as secure as a Bank
Why this article is wrong.
- Bank money cannot be printed, or even etched into a metal plate, and stored in a small fireproof container, where nobody knows about it. There is just no comparison between a bank and this particular method of securing the private key of a bitcoin wallet. period
- Right now, there is a lot of risk with keeping the wallet on your computer, more than a few incidents of people losing them from wallets stored on their pc, I think even the unlock password was grabbed by a keylogger. Should it have to be stated, that you should not trust Windows with your bitcoins? Really?
- While those silly people at Bitfinex may have lost some 1200BTC that were attached to Bitgo accounts, the jury is far from out and the investigation such a collossal theft should have prompted, and the indefinite closure of the exchange, has not happened.
- Most exchanges, use cold storage, the keys holding the unlock to spend the bitcoins they are holding in trust for you, as account holder, cannot be breached except physically, and there is serious security around the places where this storage is being done.
- Simply, if you are running a secure operating system, with encrypted storage where you keep your keys, and substantial user passwords for blocking remote access to your account if they happen to breach some open service you didn't know was vulnerable, they still can't get at your wallet file. And then, if you have any sense, you have it encrypted with a password as well.
The biggest insecurity in bitcoin is the price volatility, and this is a natural function of its small market capitalisation and contentious development millieu. Double spend attacks, hardware wallets, printed and etched, wallet keys, I mean, seriously, if you make the effort, and don't need to spend the coins on a regular basis, you don't get much safer.
When I was first getting involved with bitcoin, in 2013, I mean, right then and there, the Cyprus government froze everyone's bank accounts. Do you think that this is really secure?
None of the fatal issues with the global financial system after 2007 were really addressed. Almost nobody thinks that within 12 months there is not going to be a serious issue with money in the bank.
But I will say one thing. Longer term, I think that money will turn out to be better secured by systems like the one Steem uses, or what Ethereum can potentially enable.
Nothing is more secure than cryptography, nothing in this whole world. That's the main reason why there is so much of a buzz around blockchain technology.
I don't think the point of the article was that the banking system does not have all the issues related to the global financial system and fiat currencies. The author is not really denying that. What the author is basically saying that 99% of the users out there are incapable of using the security of Bitcoins properly, and hence it invalidates the security benefit that they offer. Sure, if you are a smart user who knows how to properly secure your Bitcoins in a cold wallet, and will not lose your private keys - you are fine. For anyone who has helped a technology illiterate parent/grandparent try to use an iPhone though, imagine trying to get them to handle their Bitcoin security correctly.
You make very valid points but I take issue with the statement 'bank money cannot be printed'. A paper wallet in bitcoin is almost analogous to that of bank notes. I could draw a picture of Dorian Nakamoto and write 5 mBTC and put a private public key pair on it and fund that public key. Then hide that note somewhere. Is it really that different from taking a five dollar bill and hiding it somewhere?
this article is a joke. author should read up on trezor / other hw wallets before jumping to lengthy conclusions. much safer than any bank could ever be.