- If MtGox suffers a data loss or is forcibly shut down by the feds, (depending on how paranoid you feel) your money is lost.
They only need to back up their private key in several secure locations. In case of a failure for whatever reason, the private key can be released and everyone can move their own money to where they please. Not unfuckupable, I'll grant you that, but nothing is foolproof to the sufficiently talented fool. It is certainly a vast improvement. If the same thing where to happen today, my money would not only be lost., it would actually be under the control of whoever took over Mt Gox.
- If your PC is compromised an attacker may well be able to use social engineering techniques to take the yubikey off your account. (Don't believe me? Email MtGox and tell them you lost your key, see for yourself how hard it is to get it removed).
If this is indeed the case (and it may well be) then it is a seperate issue that needs to be addressed, irrespective of whether Gox uses multisig.
- You need to trust that when you enter your password it's not transmitted in plaintext to the serverside, or that MtGox doesn't secretly record your private key in the window when it has access to it. If it does either of these then when MtGox gets hacked you lose your money still. (Don't think this could happen? See here:
http://www.wired.com/threatlevel/2007/11/encrypted-e-mai/ ).
No, I don't. I can easily verify the javascript that is sent to my browser to confirm what will and will not be sent over the wire. Of course I wouldnt want too study the code evry time I want to make a payment, but as long as someone I trust has audited the code since the last version change, and I can reliably detect version changes in my browser, I don't have to. Not only should my private key not be sent in plaintext, it should not be sent at all. All that is sent to Gox under this model is a half signed 2-of-2 multisig tx. Even if it was plaintext it should be useless to any snoopers.
What advantage does multisig give you over Blockchain.info where the serverside account is encrypted with a client side password?
I don't have to trust Gox. They are in no position to take my funds (my BTC denominated funds that is, they can have a field day with my fiat). Nor is any hacker that manages to compromise their site in a position to swipe my funds. At the same time I have the ability to trade instantly without waiting for six confirmations, as I would have to do if I chose to keep my funds local and only send to Gox each time I want to trade. Most merchants will accept payments from such an address without waiting for confirmations, since Gox will not sign a double spending transaction. Lastly, my money is safe even if a key-logger is installed on my machine.