See, if it were dollars, I could just reach into your bank account or your mattress, or wherever you keep them, and take them. Can't do that with bitcoins.
That's just out of practicality.
Anyone who possesses your private key has your coins.
So its more like bitcoin gives you a very strong box for holding your value and gives you a key.
This key can be taken from you and you could lose it.
Sure could. Most Western countries now have
laws requiring you to hand over the keys to any encrypted data the cops want to look at.
Sure. But do they get the key to all your riches, or a mostly empty show wallet? How would they know the difference?
The thing is, this goes for any information, like the location of my pirate treassure...
And in some ways information is hard to contain, even harder than physical keys.
