ARM processors are getting very powerful and can match the performance x86 easily especially for many Laptop / Notebook applications with a far superior battery life. x86 software is also source compatible but is not binary compatible with ARM. This leads to a crucial difference between Microsoft Windows and GNU/Linux when it comes to ARM and actually gives GNU/Linux a huge advantage. A vendor such as Canonical (Ubuntu) can easily port GNU/Linux to ARM and produce a software distribution that is virtually identical to that on x86 since virtually all the third party software and drivers are Free Software / Open Source. The net result is that the experience on ARM and on x86 is essentially the same. Microsoft on the other hand can only port their own software, the OS and a handful of applications, to ARM and has to depend on third parties to port the drivers and most of the software. The net result is that the Windows 8 experience on ARM will be far inferior to that on x86 because most Windows software will not run and many peripherals will not work on ARM.  

To get an ides of what is possible with GNU/Linux on ARM take a look at Ubuntu for Android. http://www.ubuntu.com/devices/android where we have a full GNU/Linux desktop experience where the tower is replaced by a docked smartphone. I do agree Microsoft has shot themselves in the leg with Windows 8 and this path will lead to their downfall, with a majority running GNU/Linux on their desktop (with the tower replaced by a docked smartphone maybe?). Furthermore I would not be surprised if Bitcoin actually accelerates the downfall of Microsoft.

It is not that simple. Remember SOPA a year ago?

Free Software / Open Source is not perfect but it is far superior to the propriety model. I actually live in Canada and have spent a lot of time reading the Copyright Act.

The real threat with Microsoft Windows is DRM which has fundamentally changed the degree of centralized control in Microsoft Windows over the last decade from a completely open system to a completely locked down system. While it would be next to impossible for Microsoft to control what programs a user runs using say Windows 2000 or Windows 98SE, it is trivial to do with Windows 8 RT on ARM. The latter is a completely closed software system where only software from the Microsoft controlled store is allowed to run very much like IOS. ARM Windows 8 computers will also come with a locked bootloader. It is an evolutionary process with XP more restricted than 2000, Vista more restricted than XP, 7 more restricted than Vista, 8 more restricted than 7. It is also a pattern among platforms with the oldest 32bit Intel as the freest and the newest ARM as the most restricted. 64bitAMD is in between. Many Windows users actually believe that they have the same freedoms today with Windows 8 than they had 12 years ago with Windows 2000 or Windows 98SE, when in fact the situation very different and will also get a lot worse with each new version of Windows. By the time Bitcoin becomes mainstream it will only be possible to run Bitcoin on Windows with Microsoft's permission, just as is currently the case with IOS and Apple.

The best analogy is how to cook a live frog alive by slowly rising the heat in small increments. If one places the frog in pot of boiling water it will jump out right away; however if one places the frog into a pot of cold water and slowly rises the heat to a boil the frog will stay in the pot and get cooked alive.

It is for this reason that I find it important to identify the real threats to Bitcoin from propriety OS vendors that wish to control every aspect of the end user computing experience for their own ends.

Just to clarify I mean 1% of the the world money supply which would put Bitcoin use when compared to Government currencies in a market share comparable to GNU/Linux on the desktop. The most conservative estimates of the GNU/Linux on the desktop market share is 1%

The key difference is that with Free Libre Open Source is that the source code is there for everyone to see. If a GNU/Linux distributer were to distribute binaries that did not match the source code they would be exposed in no time and in addition would be liable to civil and criminal liability for copyright infringement. So I do not need to inspect every line of code to not trust the GNU/Linux distributer and yet use that distribution.

Of course the fact many Bitcoin users do not run Windows is a great source of strength for the bitcoin network.

P2P file sharing is not illegal. Copyright infringement may be illegal under certain circumstances; however the most common liability for individuals is civil damages. In the scenario where a government were to try to stop Bitcoin the most efficient method would be to get Microsoft and Apple to shutdown most of the nodes. They can then concentrate their resources on the much fewer remaining GNU/Linux nodes. What is is really scary is that this can be done without making Bitcoin illegal thereby avoiding the legal and constitutional challenges that would arise in many countries. The best analogy is Wikileaks, just replace VISA, MasterCard, PayPal etc. with Microsoft and Apple in the Bitcoin case.

Have you seen the source code for what you download from Technet? If the answer is no then you a trusting Microsoft. Unless one does not update Windows at all there is no getting around the trust of a single centralized authority controlling over 90% of computers worldwide. The name of this authority with centralized control is Microsoft.

If the FPGA or ASIC is controlled via a Microsoft Windows machine the vulnerability is still there; however I do agree that FPGAs and / or ASICs will reduce greatly the danger to the bitcoin network posed by botnets of infected Windows computers. As to the impact on the bitcoin network of shutting down all the Windows nodes and mining, while I do believe bitcoin would survive in that scenario it is the single biggest risk to bitcoin from one single centralized source.

I never said such a thing; however if Bitcoin were to reach the level of penetration of GNU/linux on the desktop 1% market share the BTC / USD exchange rate would be in the neighborhood of 1 BTC = 10000 USD. We have a very long way to go with the "nerd fringe element" alone.

What I do not want to see is the average soccer mom losing their money, be it BTC, CAD, USD, EUR because of the sheer incompetence of a multinational corporation. Microsoft Windows is by far more difficult to use, secure and maintain than a modern GNU/Linux distribution such as Ubuntu. The average soccer mom is likely already mining bitcoins for the profit of some criminal botnet because of Microsoft Windows so in a sense they are already using bitcoin, they just do not realize it yet. The reason I know this is because I have removed bitcoin mining malware from the computer of a "soccer mom" who had no idea what bitcoin was.

This is not clear to me at all. The OP's backup wallet could have been compromised by a Windows based keylogger.

That is not bitcoin at all. It is more like MintChip. http://mintchipchallenge.com/. Bitcoin is about putting the end user in control and for that one needs a Free Libre Open Source Software OS.

Hovering over a URL before clicking on it is a very good idea if the source of the URL is in any way suspicious. I do it all the time with spam emails. In many cases the URL ends with .exe (Windows executable!).

Yes one can secure Microsoft Windows, but it takes considerable effort and technical expertise. The average consumer's Microsoft Windows computer is more often than not infected with all sorts of rootkits and malware. It is far simpler in these situations to simply ditch Windows and use GNU/Linux. Cold storage can also provide a false sense of security because the moment one needs to move coins then one is exposed.

GNU/Linux is way safer that Microsoft Windows when it comes to malware. There are many reasons that come down to the design of the OS, (it was designed form the ground up as a multi user OS, Windows was not), and the culture, (most GNU/Linux users download their software from trusted repositories, do not run as root, and have no motivation at all to download warez even if warez that actually runs natively on GNU/Linux even exists!). The entire Free Software / Open Source model of software development is far more secure since there is no opportunity for "security by obscurity". The latter is very popular with propriety software vendors. DRM for example is entirely based on security by obscurity.

There is a lot wrong with using a propriety OS with bitcoin, particularly one that has over 90% market share since that creates a massive single point of failure for a very large portion of the bitcoin network. If a Microsoft Windows related attack were to hit the bitcoin network, bitcoin's chance of survival will likely rest with those of us who have chosen to run bitcoin nodes and mining on GNU/Linux.

As for the MTGox and Bitcoinica hacks we are talking about servers being compromised because of less than optimal security procedures of the server administrators. This has nothing to do with the issue at hand here, namely malware on consumer computers.

Microsoft could easily issue a patch to Windows that would disable all bitcoin related software on computers running Windows. This would shut down a very large portion of the bitcoin nodes and mining hashing power. This is a far greater threat to bitcoin in my opinion than the potential actions of governments or banks.

This ignores the root cause of the problem. It is not the user or lack of training. It is Microsoft Windows which is a propriety operating system. It is even unclear if the Yubikey (apparently incorrectly used) or the backup wallet was compromised. The reality here is that many new users will loose their bitcoins if they use Microsoft Windows as their Operating System. Two factor authentication can help but as this case sadly demonstrates it is not foolproof.

At a very fundamental level a propriety operating system with over 90% market share worldwide is incompatible with bitcoin as the security of bitcoin is ultimately predicated on each individual user having complete control over their computing experience while propriety software is about the exact opposite. Be it Apple's walled garden or Microsoft's centralized control over people's computers the direction that propriety software has taken is very much about centralized control. For example with the recently released Windows 8 RT. Microsoft has complete control over which software is installed on a particular computer or device.

Centralizing control over the training of new bitcoin users in order to accommodate Microsoft or Apple is simply not the answer.

... and the first factor of the two factor authentication was? Let me guess a computer running Microsoft Windows. It seems to me that Microsoft Windows rather than bitcoin is the real problem here. By the way I have been using GNU/Linux exclusively for all my online financial transactions since well before bitcoin even existed with no problems.

It does not matter what king of currency one uses BTC, CAD, USD, EUR etc. If one uses Microsoft Windows for financial transactions there is good chance that sooner or later one will get burned.

Right now there is a simple solution to this problem that works everywhere for in person transactions. It is called cash.

In Canada a very famous case was Robert Dziekański who was Tasered to death 5 years ago in Vancouver International Airport by the RCMP. http://en.wikipedia.org/wiki/Robert_Dzieka%C5%84ski_Taser_incident. The incident was filmed by a bystander and the police took that camera and the video card and then subsequently returned the camera with a new video card. They were subsequently forced to return the video of the incident by the courts. The video was critical in the subsequent investigation and legal action.

This is a case that demonstrated the importance of citizens being able to film the police in order to protect civil liberties. It is not uncommon in these kind of situations for the police to try to suppress the video even if the law in on the side of the citizen taking the video, so it is not surprising that many have the impression that it is illegal to film the police.  By the way it also works both ways. During the Recent Vancouver Stanley Cup riot many of the rioters were caught due to filming by citizens of the rioters in action.

Are your sure it is actually illegal to film a police officer in the United States? http://technorati.com/technology/article/federal-courts-rule-it-is-not/

A key question here is how far in the future is the contract being traded?

That would explain why FedEx delivered my documents there on Monday. I am still waiting on a reply to my ticket; however it is early am in Tokyo right now. One thing I must say is that Charlie at BitInstant deserves a great deal of praise for getting involved in this issue. Thanks Charlie for all your efforts.