I'll just add that the original automobile accident fatality in the UK involved a car moving 4 miles per hour.
There were laws that all motorized carriages required a man walking in front waving a red flag.
http://en.wikipedia.org/wiki/Red_flag_traffic_lawsA lot of the posts in this thread are asserting that we need the red flag laws. Others assert that 'people fucking up' *are* the red flags...
The decentralized nature of bitcoin means there is no robust, centralized effort to educate and babyproof the experience for people. Even if you write a nice guide, make a nice video, etc... you will still end up with people using brainwallet the way this person did because it requires someone to 'look up the info.'
Being smart isn't a static quality, it is indicative of a process of gathering information. In other words, being smart is the propensity to educate yourself. Some people simply don't possess that nature and require trust and assume simplicity protects them from their intentions. That is ignorant - even insane - but those assumptions carry through to everything that person would encounter in life.
Even if you shout redfaced at every moment about:
~ waterproofing paper wallets
~ making cold storage backups
~ being as redundant as possible while maintaining security
~ don't visit weird sites assuming the best instead of the worst
~ encryption and encrypting the encrypted, and so on ...
~ understanding the ramifications of using any 3rd party / cottage industry
~ lawful use / taxation responsibilities
you're still going to see
~ soggy ruined paper wallets
~ i threw my only harddrive with btc on it / reinstalled windows and forgot about my coins
~ made 10,000 copies of my private key on a cloud website and somehow my coins are gone
~ i was hacked even with 2FA
~ password123 encryption
~ hey where'd the online wallet go that looked like every other twitter bootstrap site
~ i got a letter in the mail from my bank that my funds are frozen after running a kewl exchange site
due to people who do not have that propensity, or even those that do but miss a detail while trying to absorb myriad other details...
etc... bitcoin is smart, that will slow adoption. people are stupid with other currencies, investments, security... bitcoin is simultaneously more alluring and more complex. it isn't really any less secure, but i would say it is vastly more prone to simple, fatal errors in the user experience.
As others have voiced, it needs to mature past the "well if you make a mistake you get kicked in the balls repeatedly for the rest of your life" experience. That's not on bitcoin, that's on the industry around it to make a nice product. Trust, however, of that product... well, in the unregulated world that is an issue.
