Most people are not capable of keeping their wallets safe?

[tomcollins]

Right now there are a lot of technology geeks involved, so most people are capable.  But if BitCoins were to spread to a more widestream appeal, most people wouldn't be able to safely keep track of their wallets.

You'd see the following things:

1)  Trojans/viruses/exploits getting to the wallet file.  If I understand correctly, this file is unencrypted, so anyone who takes this file can take control of your wallet.

2)  People may lose their wallet.  Their computer crashes, they accidentally delete it, etc...  Bye bye Bitcoins forever.

3)  People will encrypt stuff, but forget the password and screw themselves.

Anything else that you would expect a casual user to screw up?

Those two things are real deal breakers that I would recommend to people who were not computer geeks to NOT use BitCoins, just because they would be incapable of having a good experience with them almost all of the time.

Some people have said "fools and their money should be parted, so this parts them faster", but I disagree.  We are the small minority and we cannot expect Joe Sixpack or Grandma to ever learn anything about computer security or backing up files.  Even knowing what to do, it would be a lot nicer if it was done for me automatically.

As the market matures, these issues will be solved.  But I would expect either an enhanced client for those types of users (clearly not a priority now), or some type of more centralized service for those types to keep from shooting themselves in the foot.

Are there any other common scenarios where someone would really shoot themselves in the foot?

[1714844978]

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[1714844978]

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[brocktice]

There is already MyBitcoin, but then we have seen with MtGox that services like this are already being targeted.

[cypherdoc]

There is already MyBitcoin, but then we have seen with MtGox that services like this are already being targeted.

can u elaborate on what u mean by this?

[mewantsbitcoins]

I suspect that the biggest problem will be trojans/viruses/exploits if wallet remains unencrypted. This should be addressed ASAP.

As to the other two points, backing up and remembering your password are trivial tasks. It's not 80's anymore - computers are here to stay and will become increasingly bigger part of our lives. We should learn to interact with them.

[cypherdoc]

I suspect that the biggest problem will be trojans/viruses/exploits if wallet remains unencrypted. This should be addressed ASAP.

As to the other two points, backing up and remembering your password are trivial tasks. It's not 80's anymore - computers are here to stay and will become increasingly bigger part of our lives. We should learn to interact with them.

did Mtgox and Mybitcoin get hacked?

[Alex Beckenham]

You'd see the following things:

1)  Trojans/viruses/exploits getting to the wallet file.  If I understand correctly, this file is unencrypted, so anyone who takes this file can take control of your wallet.

2)  People may lose their wallet.  Their computer crashes, they accidentally delete it, etc...  Bye bye Bitcoins forever.

3)  People will encrypt stuff, but forget the password and screw themselves.

Anything else that you would expect a casual user to screw up?

If Alice owes Bob 100 btc and her wallet contains exactly 100 btc, she may just email him her wallet.dat.

Now it's stored unencrypted in both parties email accounts...

Plus Bob possibly now gets any future money intended for Alice as he has those old keys.

[Ian Maxwell]

Private keys really need to be strongly encrypted. Like, yesterday. At the moment theft is much too easy considering how potentially profitable it is. I should have to enter in my passphrase every time I want to send bitcoins---a forgotten passphrase is unlikely if it's used frequently enough.

And there ought to be an automatic backup system as well. Right now I have an encrypted wallet.dat in my Dropbox which I update periodically (I deliberately produced a lot of keys up front), but I don't trust my mother or aunt to remember to do something like this. Even a centralized backup server is better than nothing.

[tomcollins]

I suspect that the biggest problem will be trojans/viruses/exploits if wallet remains unencrypted. This should be addressed ASAP.

As to the other two points, backing up and remembering your password are trivial tasks. It's not 80's anymore - computers are here to stay and will become increasingly bigger part of our lives. We should learn to interact with them.

Should and reality are two different things.  I have probably 50 different passwords for different things, different logons, etc...  I'll forget them every once in a while and have been bailed out by the "forgot your password" link on things all the time.

I'm not sure what the answer is, but if any significant wealth is stored on bitcoin, with no way to ever recover money, that's a big deal.  Even if I get hit by a bus, it's gone unless I left the information in my will or a trust or something.

[brocktice]

I understand and agree that currently bitcoin wallets are not very secure, and that that should change in the future, (or yesterday, as suggested).

That said, I am curious. Have there been any reports *yet* of bitcoin theft directly from an individual's wallet (and not from some hacked web service)?

[chooseusername10]

Encryption wont solve this problem, because the hackers will steal the keys.
From another thread

I would change it so vital parts of the protocol can be preformed with out a connection to the internet, and only encrypted blocks of cipher text / already signed data would need to touch the internet. People could decrypt and verify signatures on a different machine with no connection to the internet, and the data to try to hash also transferred this way and then coins mined for and stored completely offline prior to a signed/ciphertext transfer of value. This would prevent hackers from being able to attack the network with buffer overflows and similar, root all of the clients and destroy the value of Bitcoin. This could be done either with flaws in the programming of the bitcoin client used, or flaws in the programming of other applications used in a shared environment. I doubt many Bitcoin users are taking security measures capable of defending from intelligence agency / military / super l33t hackers in general and such an attacker could likely take over the network. By removing critical processes from the internet entirely and having only secured/signed/encrypted data online, you can completely remove the risk of hackers 100%. This is the only way to remove such risk 100% as well, but most users are not even securing themselves near as well as they could be while connected to the internet, and the technical expertise required to do this is significantly beyond that of the average computer user.

I should also add that data should be transferred between the internet connected machine and the disconnected machine via CD which is discarded, so an attacker can not use the CD as a compromise vector to communicate data from the disconnected machine to the connected machine and then back to the attacker. Also, at least one back up of the drive of the disconnected drive should be made periodically, incase a compromise attempts to wipe the drive rather than steal the wallet

I think this is the only solution. Also I would like to point out that even if you are a security expert, as long as you are connected to the internet there is always the risk of some hacker. There are probably hacker groups out there right now that would be capable of taking over 99% of the bitcoin network and stealing all wallets, and adding encrypted wallets isn't going to change that since they could just steal the key.

[RodeoX]

I agree this should be a priority. At least encrypting the wallet file and requiring a strong passphrase to open it for spending.
Remember bitcoins are money, this is not like protecting a forum account from practical jokes. Enough coins in your wallet could bring out the not f-ing around crew.

[cypherdoc]

i don't leave my Bitcoin client open while i'm browsing and just to make sure, i offload the wallet.dat file after i encrypt off to my Blackberry with another copy in Dropbox.  how do u guys feel about storing a Truecrypt file in Dropbox.

[allinvain]

Yeah the bitcoin clients needs and should encrypt the wallet.dat file like RIGHT NOW..PRONTO!! This is a huge security risk. If we want bitcoin to become more widely adopted it has to be more than a e-currency for geeks..it has to be almost idiot proof and as secure BY DEFAULT as possible..ok..enough shouting :p

I think storing an encrypted file on Dropbox should be ok. If you want to be super paranoid store another copy on another cloud storage provider as well.

[ribuck]

i don't leave my Bitcoin client open while i'm browsing and just to make sure

Don't keep Bitcoin (i.e. wallet.dat) in the same login account that you do your browsing from.

[brocktice]

i don't leave my Bitcoin client open while i'm browsing and just to make sure, i offload the wallet.dat file after i encrypt off to my Blackberry with another copy in Dropbox.  how do u guys feel about storing a Truecrypt file in Dropbox.

I think it's a great idea to store an encrypted backup of your wallet in dropbox. HOWEVER, this only solves the I-lost-my-money-because-of-a-hard-drive-crash-or-fire problem, not the someone-hacked-my-computer-and-took-my-money problem.

[Alex Beckenham]

Encryption wont solve this problem, because the hackers will steal the keys.
From another thread

I would change it so vital parts of the protocol can be preformed with out a connection to the internet, and only encrypted blocks of cipher text / already signed data would need to touch the internet. People could decrypt and verify signatures on a different machine with no connection to the internet, and the data to try to hash also transferred this way and then coins mined for and stored completely offline prior to a signed/ciphertext transfer of value. This would prevent hackers from being able to attack the network with buffer overflows and similar, root all of the clients and destroy the value of Bitcoin. This could be done either with flaws in the programming of the bitcoin client used, or flaws in the programming of other applications used in a shared environment. I doubt many Bitcoin users are taking security measures capable of defending from intelligence agency / military / super l33t hackers in general and such an attacker could likely take over the network. By removing critical processes from the internet entirely and having only secured/signed/encrypted data online, you can completely remove the risk of hackers 100%. This is the only way to remove such risk 100% as well, but most users are not even securing themselves near as well as they could be while connected to the internet, and the technical expertise required to do this is significantly beyond that of the average computer user.

I should also add that data should be transferred between the internet connected machine and the disconnected machine via CD which is discarded, so an attacker can not use the CD as a compromise vector to communicate data from the disconnected machine to the connected machine and then back to the attacker. Also, at least one back up of the drive of the disconnected drive should be made periodically, incase a compromise attempts to wipe the drive rather than steal the wallet

I think this is the only solution. Also I would like to point out that even if you are a security expert, as long as you are connected to the internet there is always the risk of some hacker. There are probably hacker groups out there right now that would be capable of taking over 99% of the bitcoin network and stealing all wallets, and adding encrypted wallets isn't going to change that since they could just steal the key.

Your main wallet could be in the offline machine, then you just update it's blockchain via CD.

As most people know, you can easily send to an offline account, so that's no problem, but how do you spend from it securely?

The answer I think is in wallet surgery... upcoming tools that will allow you to split off say $49.95 from your wallet while completely OFFLINE. Then transfer that new $49.95-value wallet.dat to the net-connected machine via CD for spending. This will probably be a bit dependent on your savings wallet consisting of many small-value addresses, rather than a few large-value addresses.

[cypherdoc]

i don't leave my Bitcoin client open while i'm browsing and just to make sure

Don't keep Bitcoin (i.e. wallet.dat) in the same login account that you do your browsing from.

thank you.

[Timo Y]

The problem is that it's extremely hard to achieve user friendliness and strong security at the same time.  It might even be impossible. There seems to be a fundamental law that greater security must always come at the cost of less user friendliness.

The best compromise I can think of is a piece of hardware, perhaps a smartphone, used exclusively for bitcoin.  This device takes the user's fingerprint and a password before every transaction. It has an extremely restrictive firewall.  The advantage of using a separate device is that it's simple to use and the amateur user can't compromise system security by installing software from third parties.

Automatic wallet encryption is not very secure at all, because the trojan/virus only has to sit and wait for the next time the user sends some bitcoins for the unencrypted version to appear on the OS.  There is also the problem that modern operating systems are getting increasingly complex and who knows where cached copies of the unencrypted wallet might be hiding, even if the copy visible to the bitcoin client is encrypted?

Giving users a false sense of security is worse than no security.

The market will no doubt one day offer solutions for non-geek users, such as my example of the "bitphone". Demand for them will soar once there are a few highly publicised cases of bittheft.  I fear that the fear is what it will take for a decent product to emerge. Unfortunately that's the way humans work. They grossly underestimate the risk from events that have never occurred (yet).

[RodeoX]

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

[Timo Y]

[...] and we cannot expect Joe Sixpack or Grandma to ever learn anything about computer security or backing up files.
[...]

Well maybe we should expect them to learn about it.

Basic computer literacy should be considered just as important as the three Rs these days.

I've not saying that Joe Sixpack should be expected to understand the mathematics of encryption, but he should have a conceptual notion of what comprises a good password, the most common attack scenarios, what a firewall does, backup strategies, redundance, etc .

Almost everybody can learn those basic concepts if they want to.  The problem I see with a lot of older people especially is not a lack of ability but a lack of motivation to deal with computers.  If a computer is suddenly more than just a novel way of shopping and mailing letters, and a big part of their savings is at stake, I bet that the motivation will appear.    

[cypherdoc]

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

r u not worried about that encrypted wallet on your computer while u surf?

[Alex Beckenham]

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

Well, if you're using truecrypt, you could follow the paranoid recommendations in their docs and never file-copy a container (Instead, you should make 3 different containers from scratch, then copy your files into each of them separately).

[RodeoX]

r u not worried about that encrypted wallet on your computer while u surf?

Yes. yes I am.     However I only fire up bitcoin when sending/receiving money. hope that mitigates my risk somewhat.

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

Well, if you're using truecrypt, you could follow the paranoid recommendations in their docs and never file-copy a container (Instead, you should make 3 different containers from scratch, then copy your files into each of them separately).

That's good advice.  I actually take some other steps that I will keep secret here. My most effective precaution is my Bit-poverty.
 

[newguy05]

If Alice owes Bob 100 btc and her wallet contains exactly 100 btc, she may just email him her wallet.dat.

Now it's stored unencrypted in both parties email accounts...

Plus Bob possibly now gets any future money intended for Alice as he has those old keys.

You cant fix stupid, that's like saying if alice owe bob $1000 and her bank account contains exactly $1000. She may just email her bank account login/password + debt card to him.  Then continue to deposit money into the bank account. Does that make any sense?

All average joe needs to do is install the bitcoin client on a usb dongle, plug it in when need to use and unplug immediately when done.   It's no safer/riskier than logging into your bank account from your pc.  It's expected the average user has antivirus running and keep their computer reasonably secure, if your computer is completely exposed with tons of virus/trojans, then anything on it gets compromised.

I think bitcoin is just fine the way it is.

[rebuilder]

I think it's a great idea to store an encrypted backup of your wallet in dropbox. HOWEVER, this only solves the I-lost-my-money-because-of-a-hard-drive-crash-or-fire problem, not the someone-hacked-my-computer-and-took-my-money problem.

If you store the wallet directly in an encrypted container and only mount that it when you need to send coins, that mitigates the risk. It still won't help against keyloggers, though. At the very least it's probably a good idea to schedule password changes for the container, and you'd probably want to do that change with a livecd. In fact, only mounting that container in an OS run off a CD should, provided that OS is clean, give a lot of peace of mind. There's hardware keyloggers of course, but I at least think it's unlikely someone would break into my home and install one without me noticing.

Bottom line, keep at least two wallets, one for spending and one as a vault, following more stringent security practices. You don't want to have to go home and boot up from a CD every time you want to spend some coins, so having small sums more readily available is a good idea.

[k]

would it be possible or useful to back up everyones wallet somehow in an encrypted form in the block chain such that it would always be an up to date backup and also accessible from anywhere running bitcoin. you would be forced to use a strong password/phrase somehow.

maybe a completely stupid idea. just seems appealing that you could go to any computer with bitcoin on it, enter you're passphrase and voila, you have access to your wallet.  actually just writing this now thinking that this would be pretty stupid as there could be all sorts of spyware/key loggers on an unknown computer.

[theboos]

We can expect Joe Sixpack and Grandma to learn about computer security if they own a computer. If I buy a house, it's perfectly reasonable to expect me to learn how to lock the doors and set an alarm. I agree that Bitcoin should be made more accessible so the security skills involved in computer usage transfer over, but a sufficiently stupid user will lose his bitcoins, and that seems perfectly fair.

The essentials of Bitcoin security are:

• Wallet.dat contains your money. If someone else has it, he will be able to use your bitcoins. If you lose it, your bitcoins are gone forever. If you keep it secure, NOBODY but you will be able to use your bitcoins.
• If you encrypt wallet.dat, keep the password secure. If someone else has your password and your encrypted wallet.dat, he will be able to use your bitcoins. If you lose your password, your bitcoins are gone forever. If you keep your password secure, NOBODY but you will be able to use your bitcoins.

All else follows. If you get a virus, your wallet.dat is vulnerable. If you don't back up your wallet.dat, you won't be able to get it back. If you tell someone your password or make an easily crackable password, someone will be able to spend your bitcoins. It's our job to make the essentials of Bitcoin security obvious, but nothing more. If someone doesn't understand the basics of computer security, they shouldn't be using one in the first place.

[theboos]

would it be possible or useful to back up everyones wallet somehow in an encrypted form in the block chain such that it would always be an up to date backup and also accessible from anywhere running bitcoin. you would be forced to use a strong password/phrase somehow.

maybe a completely stupid idea. just seems appealing that you could go to any computer with bitcoin on it, enter you're passphrase and voila, you have access to your wallet.  actually just writing this now thinking that this would be pretty stupid as there could be all sorts of spyware/key loggers on an unknown computer.

Better idea is to widely distribute your encrypted wallet.dat (P2P file storage comes to mind) and then download it if you move to a new computer. This protects fairly well from loss but you still need to remember your password (obviously).

[FlipPro]

I have a quick question, that I don't understand very well, but that's probably simple. When you make a backup of your "bitcoins" are you making a backup of a note, that says the system owes you that many bitcoins? Or are you backing up the actual bitcoins themselves? Also what happens if you transport these bitcoins from computer to computer? Do they transfer over even if the computer ID'S are different? And finally is there a 100% full proof solution to self management of the bitcoins in ones wallet, or than the online services mentioned ?

[phatsphere]

I have a quick question, that I don't understand very well, but that's probably simple. When you make a backup of your "bitcoins" are you making a backup of a note, that says the system owes you that many bitcoins? Or are you backing up the actual bitcoins themselves?

No, technically, there are no bitcoins in a file and there are also no bitcoins really floating around. The system is based on transactions. They have two ends: input and output and they form long chains which are public knowlege. (see blockexplorer website)
Your actual wallet contains the private keys to all the addresses, from where you would be able to send money to somebody else. I.e. the open ends of transactions where you can proof that you are the receiver and you are able to append another chain to somebody else (and also yourself, too).
Where does the chain start? Well, each new generated block ("mining") starts with a loose end.

Your backup basically contains those private keys and about 100 more which will be used for future transactions. So, even when you loose your wallet file and your backup is some transactions behind, you should not loose something.

Also what happens if you transport these bitcoins from computer to computer? Do they transfer over even if the computer ID'S are different? And finally is there a 100% full proof solution to self management of the bitcoins in ones wallet, or than the online services mentioned ?

Well, the client reads the wallet file and checks all transactions if it is able to append to the chains. Then it sums up all the amounts in the open ends. I don't know what you mean with computer ID ... that's irrelevant. The wallet file is client dependent (assuming there will be independent and completely different btc clients in the future ... so you have to make sure that the wallet file can be read by the client software, that's all)

Self management depends on you. The file itself is unencrypted ... which is a flaw in the system. Hence, you have to make sure that nobody could use it if your hard-drive is stolen ... hence disk encryption. When you upload it somewhere, make sure that you encrypt the file prior to sending it.

Final words, I'm also a newbie, so, maybe somebody will correct me on some details

[Maged]

Final words, I'm also a newbie, so, maybe somebody will correct me on some details

Really? That just about nailed it. Good job!

[TTBit]

If bitcoin could be put on an ironkey like device, would that help?

https://www.ironkey.com/

[lemonginger]

yes bitcoins will never see mainstream adoption as long as people can literally delete a file or forget a password and lose all their money, no matter what you geeks think. I agree that more services like mybitcoin will emerge, and I suspect the next iterations o cryptocurrencies (the ones that do catch on after BTC crashes and burns) will have much different ways of dealing with this.

It simply isn't reasonable to ask people to take the risk that their money can disappear because of an unbacked-up file.

[MacFall]

All average joe needs to do is install the bitcoin client on a usb dongle, plug it in when need to use and unplug immediately when done.

...Except as I just found out, that requires running bitcoin.exe with cmd with modifying instructions to relocate the data directory to the USB dongle, which is a real bitch. Average Joe doesn't even know what the F cmd is, much less how to use it.

I don't think it would be hard* to add something onto the client that will do that for the user automatically (on install have an option to run it from C:/ or elsewhere), and it would go MILES towards helping Average Joes and Janes use bitcoin securely more easily. Without ease of use, bitcoin will remain a niche commodity - and bitcoin needs greater market depth more than anything else.

*Note: I say this as a non-programmer. I have no idea how hard it would actually be. But I can't see why it would be hard.

[theboos]

It simply isn't reasonable to ask people to take the risk that their money can disappear because of an unbacked-up file.

We don't ask anyone to take that risk.

This is the price of ultimately controlling your own money. Bitcoin makes it possible to store money in a single file; anyone who does not like this should not be using Bitcoin. If you are likely to forget a password, don't encrypt the file, but risk theft. If you don't want to back up a file, try your luck with the longevity of a hard drive. This entire thread is debating a security "threat" that is inherent in any system which gives you direct possession of anything.

[lemonginger]

We don't ask anyone to take that risk.

This is the price of ultimately controlling your own money. Bitcoin makes it possible to store money in a single file; anyone who does not like this should not be using Bitcoin. If you are likely to forget a password, don't encrypt the file, but risk theft. If you don't want to back up a file, try your luck with the longevity of a hard drive. This entire thread is debating a security "threat" that is inherent in any system which gives you direct possession of anything.

That's fine, if you want bitcoin to only be used by libertarian nerds.

[TraderTimm]

That's fine, if you want bitcoin to only be used by libertarian nerds.

That's what I like about you, no broad generalizations. Because, as we both know, only someone who has no argument to stand behind resorts to that kind of thing.

[Ian Maxwell]

The phrase "BITCOIN IS LIKE CASH" needs to be drummed into people from the day they download the client, if not sooner.

If you lose your cash, it's your problem.
If your cash is destroyed in a fire, it's your problem.
If you lock your cash in a safe and lose the key, it's your problem.
If you give someone your cash and he doesn't deliver, it's your problem.

But I agree that right now most people can't keep their wallets safe. Most people never back anything up, and eventually lose all their data as a result. Backup solutions are getting better and easier to use, but most people still aren't using them. Hell, I should know better, but I didn't get a wallet backup into place until I noticed that with the appreciation I suddenly had a lot of money invested in them, and I still don't have a real system.

There may actually be a business opening here for a secure wallet backup service that uses client-side encryption. (The client software would of course have to be open source, to prove it really was encrypting the data.) But then we'd still be trusting ordinary users to know the difference between a legitimate backup service and a scam. Personal responsibility is always dangerous in this way.

[phatsphere]

Final words, I'm also a newbie, so, maybe somebody will correct me on some details

Really? That just about nailed it. Good job!

Thx. I've a master in mathematics, that helps understanding the paper and the crypto background 

[phatsphere]

It simply isn't reasonable to ask people to take the risk that their money can disappear because of an unbacked-up file.

exactly what i think. my "dream" is some kind of banking or credit card, that has an intrinsic unique key and a passphrase -- just like EC cards today have. your actual wallet is stored at a central bank and thats where the real transaction happens.
the device where you put the card in just get's a token for verification and that also enables instant payouts. especially, the "bank", where your wallet actually is, pays for you and also manages your wallet to get the confirmations later.

even better: replace "card" with "smartphone"

[theboos]

We don't ask anyone to take that risk.

This is the price of ultimately controlling your own money. Bitcoin makes it possible to store money in a single file; anyone who does not like this should not be using Bitcoin. If you are likely to forget a password, don't encrypt the file, but risk theft. If you don't want to back up a file, try your luck with the longevity of a hard drive. This entire thread is debating a security "threat" that is inherent in any system which gives you direct possession of anything.

That's fine, if you want bitcoin to only be used by libertarian nerds.

I'd be interested to hear your ideas for how we might make Bitcoin secure for those who won't back up their wallet and won't remember their password without losing the decentralized aspect of Bitcoin. Bitcoin appeals to "libertarian nerds" because it gives users control over their own money. Would you give up control in exchange for security despite laziness? Use a USD bank.

exactly what i think. my "dream" is some kind of banking or credit card, that has an intrinsic unique key and a passphrase -- just like EC cards today have. your actual wallet is stored at a central bank and thats where the real transaction happens.
the device where you put the card in just get's a token for verification and that also enables instant payouts. especially, the "bank", where your wallet actually is, pays for you and also manages your wallet to get the confirmations later.

Bitcoin banking of this type would be an excellent business for anyone who wants to build it. It would allow some people to give up control in exchange for security/convenience, but not force it upon all users. Though you'd still have to rely on a user remembering his or her password.

[newguy05]

It simply isn't reasonable to ask people to take the risk that their money can disappear because of an unbacked-up file.

It simply isn't reasonable to ask people tot ake the risk that their paper dollar can disappear because of losing their wallet.  oh wait..but it is reasonable...

[lemonginger]

It simply isn't reasonable to ask people to take the risk that their money can disappear because of an unbacked-up file.

It simply isn't reasonable to ask people tot ake the risk that their paper dollar can disappear because of losing their wallet.  oh wait..but it is reasonable...

The average person if much more comfortable with keeping track of a physical wallet than a file that can be corrupted/deleted/etc (yes I know its crazy. the file can be copied and backed up in 72 different places and the physical wallet only exists in one place! but its also true. Only a very small percentage of the population is comfortable with assets that exist only in intangible form)

Here are suggestions
- Ability for automatic offsite encrypted backups that occur after every transaction (storing bitcoins in the cloud) and "password recovery" features in those cloud services
- Ability to easily use multiple wallets and transfer between wallets (I'm talking large buttons in the client that are like "Checking Wallet" "Savings Wallet" etc)
- Ability to have a physical card that bitcoins can be transferred to
- Easier ability to store bitcoins in a bitcoin bank
- Bitcoin banks with legally binding guarantees (ie; you can store up to 10000 BTC with us and if we get hacked or detrayo your btc somehow, we are on the hook)
- More services like My Bitcoin

There are no alterations that destroy the ability of BTC to be used exactly as they are now, just modifications that allow some users to forgo some decentralization or some pseudonymity for ease of use/greater security/whatever.

[Mageant]

Would it be possible to have some kind of program running that checks if any process other than the Bitcoin program is acessing the wallet.dat file, and if so, then pop-up a warning?

[theboos]

Ability for automatic offsite encrypted backups that occur after every transaction (storing bitcoins in the cloud) and "password recovery" features in those cloud services

Someone could sell a "cloud client" that does this. However, you have to trust the provider that they won't use your Bitcoins.

Ability to easily use multiple wallets and transfer between wallets (I'm talking large buttons in the client that are like "Checking Wallet" "Savings Wallet" etc)

Wallets should be easily importable and exportable from the GUI. However, simultaneous usage of multiple wallets would be more confusing, don't you think? The whole point of the "savings" wallet idea is that you generate an address and then send money to it periodically, but you don't need to open the wallet unless you want to send from it.

Ability to have a physical card that bitcoins can be transferred to

If we're assuming that people can't back up or remember a password, the current QR code implementation in Bitbills probably won't be useful. I suppose someone could just encrypt and distribute their wallet and then write their password on a piece of paper and use it as a "Bitcoin card", but then the security of all of your money is dependent on a single piece of paper.

Easier ability to store bitcoins in a bitcoin bank

Bitcoin banks might be an excellent business but the market doesn't exist yet. Right now most people are content to control their own money.

Bitcoin banks with legally binding guarantees (ie; you can store up to 10000 BTC with us and if we get hacked or detrayo your btc somehow, we are on the hook)

Who would enforce this? The US? Bitcoin is not legally considered a currency anywhere to my knowledge. The bank could in fact just take your bitcoins and not return them. There would be zero legal repercussions.

More services like My Bitcoin

Sure, the market will decide, but this would be an easy way to steal people's bitcoins.


It seems like you're describing Paypal. It has a worldwide network, an easy to use interface, option of physical card, legal liability, and an online banking system. Apart from fees, there's no reason for anyone who can't back up or remember a password to use Bitcoin at all instead of Paypal.

[lemonginger]

Who would enforce this? The US? Bitcoin is not legally considered a currency anywhere to my knowledge. The bank could in fact just take your bitcoins and not return them. There would be zero legal repercussions.

So we can't have binding contracts in a bitcoin world? That would kinda suck.

More services like My Bitcoin

Sure, the market will decide, but this would be an easy way to steal people's bitcoins.

For a short period of time anyway. Presumably there is more money to be made in offering a service without scamming than with scamming. And whether or not bitcoins are recognized as a currency, there is nothing saying they aren't of any value, so that if you steal them from me and I know who you are, and my philosophy/politics do not go against getting the police involved, that I can't attempt to have you arrested for theft. Presumably a "trusted bitcoin bank" would be transparent as to who they were and seek something like voluntary regulation/certification.

If I have a choice between depositing with a bitcoin bank that tells me they are doing business as such and such in such and such a country and here are the regulations they are operating under versus a bitcoin bank that has none of that, it's not a really hard decision where to park some money.

It seems like you're describing Paypal. It has a worldwide network, an easy to use interface, option of physical card, legal liability, and an online banking system. Apart from fees, there's no reason for anyone who can't back up or remember a password to use Bitcoin at all instead of Paypal.

You're kidding, right? I can think of about 50 reasons why people might want to use BTC rather than paypal that have absolutely nothing to do with passwords, backups, or wallet.dat files.

[lonestranger]

I like to keep three copies of my wallet file. One I encrypt and leave in the /.bitcoin (in linux) folder then delete the original, not just move to trash. Then I make two copies of the encrypted file and store one on a remote server, the other on a USB stick well hidden. That is a lot of hassle, but what else can i do?

So you leave an encrypted version of wallet.dat in your .bitcoin folder. What does your client do when it sniffs around and finds no wallet.dat file?