(1) there are many ways to steal bitcoins, (2) stealing bitcoins is easier, "safer", and more effective in many ways than stealing credit cards or bank keys, and (3) bitcoin theft is still a common occurrence in bitcoin businesses, which are supposedly run by computer-savy people.
1) There are indeed. There are many
more ways to steal fiat.
There are many
other ways to steal through credit cards and from bank accounts (which is the "competition" being considered). Whether they are more or less than the ways of stealing bitcoins, in any sense, it is not clear.
2) Flat out bullshit. Not even gonna bother.
Item (3) is concrete evidence that item (2) is not bullshit. AFAIK, for (digital) bitcoin theft, the ROGTJ (Risk of Going To Jail) is basically 0%, and the average HMYKFWYS (How Much You Keep from What You Steal) rate is close to 100%. And the ratio of bitcoins stolen to bitcoins used in commerce is much larger than the similar ratio for credit cards (0.3%) , even if we leave out MtGOX and a few other cases that may be actually embezzlement rather than hacking.
[Credit cards] are still less secure than Bitcoin though - because credit card details are all that's required to fully authorise a payment and they are necessarily transmitted. Private keys can be kept confidential - credit card details can't.
Yes, I am aware that the private keys are
supposed to be confidential. But in practice they can be stolen, or used to sign transfers to the thief's wallet. These risks must be included when comparing the safety of bitcoin vs. competition.
3) It's new. People are getting better at it.
OK, so can we agree that bitcoins
may be one day safer than credit cards and bank deposits -- but are not quite there yet?
Security is always relative to threat model. [ ... ] As my threat model is biased towards seizure under color of law - overtly or covertly [ ... ], I naturally regard btc as advantaged.
OK.
However, I don't think that bitcoins will be much protection against seizure by government, either. For that purpose, storing your money in bitcoin is like burying cash in some desert location. If the government knows that you have the money hidden somewhere, and wants to get it, it will order you to turn it in or suffer the consequences. If you refuse, and are lucky to have a government that mostly respect human rights, they may just send you to jail for some years. Even in that case, most people would rather lose a few million dollars than some years of their life. Then they might as well leave their money in the bank, and let the government help itself to it.
In some aspects, hiding money as bitcoin is worse than burying cash in the desert for this purpose, because the blockchain is public and can be used as proof in court that you have that money, and that so-and-so gave it to you. All they need is to connect the bitcoin addresses to the people in question -- which we khew that they are quite capable of, even before Snowden.
Even without NSA-level hackery, they can just wait for you to spend some of those coins. Indeed, it is much easier for the police to monitor thousands of blockchain addresses and TCP/IP connections 24/7 for years, than to physically stalk one guy whom they suspect of having a cash hoard hidden somewhere.
robbery during transport or transmission, and theft from storage
Considering that card transactions can be cancelled and bank accounts are insured, these risks are so small for credit card payments and bank deposits that people usually do not worry much about them. For long-term storage, in fact, people generally put their money in some fund or savings account that pays small but guaranteed interest above inflation. That still seems to me a lot safer and more attractive than bitcoin.
And, needless to say, one cannot consider bitcoin a safe long-term wealth storage medium until its price stabilizes and its long-term survival is reasonably assured.
As people become better educated regarding the security characteristics of btc, they will increasingly use it appropriately and losses due to silliness like flashing a private key QR code on broadcast TV will approach zero. [ ... ] If your threat model includes exploits of your ignorance and you know that you are ignorant, it makes sense to be on high alert. But ignorance is curable.
Well, even the smartest computer genius has his moments of academic professorship.
Credit cards are rather "stupidity tolerant" because their transactions can be cancelled. Bitcoins seem to be much more "stupidity- sensitive".
Poll
