Bitcoin is like cash under the mattress

[Anders]

That's way too old tech for me. I don't even want to back up my computer files locally! I want it all on the cloud. At the same time other people may want to handle their own security and privacy. So both options should be available for Bitcoin.

I don't know if a personal ID could be added to the Bitcoin protocol. It would be powerful if both personal IDs and ordinary Bitcoin addresses could be used. I would then store most if not all of my bitcoins (if I had any) with my personal ID so that they would be secure automatically. Another person may want to do the opposite and store most of his or her bitcoins with Bitcoin addresses and only a few if any bitcoins with the personal ID. That allows maximum personal freedom and flexibility.

The problems starts when your "personal ID" gets compromised.

Biometrics and things like that are probably needed. So I admit that it's a tricky and big problem to solve.

Biometric is unfortunate not deterministic, since the human biology is not constant. Therefor is poorly suited for decryption or message signing. Perhaps 10-15 years from now, but the technology and infrastructure is not ready in its current state.

It's a huge problem to solve sure, yet many technologies are progressing exponentially so we may have a solution much sooner than that.

[TookDk]

But what about the security? If someone would hack into a smartphone the 12 words could be stolen. Or does the person enter all 12 words for every payment? Imagine paying for a Big Mac and having to manually type in 12 words.

Let me quote my self:

Edit. Also a good idea to have different level of security: 1. Hotwallet (not too secure, only for small amounts, but easy to access). 2. Cold storage on dedicated device (for medium term storage, middle sized amounts). 3. Paper wallets or heavy encrypted private keys (long term storage, your retirement savings).

You really don't need to have a secure hotwallet.

Same has having cash in your regular wallet, you don't bring your entire saving with you in 1000 dollar bills when you go shop for a big mac.

[TookDk]

It's a huge problem to solve sure, yet many technologies are progressing exponentially so we may have a solution much sooner than that.

Well, research in that field is ultra slow right now. But you are right, it could exponentially accelerate if the commercial interest are there.

[jonald_fyookball]

There's a simple solution.

It's called Electrum.

You simply need to memorize a 12 word seed,
and that's all you ever need to get your
bitcoins. 

Simple, safe, and secure.

If you are afraid of forgetting the seed,
you can hide a copy of it inside
an image.

But what about the security? If someone would hack into a smartphone the 12 words could be stolen. Or does the person enter all 12 words for every payment? Imagine paying for a Big Mac and having to manually type in 12 words.

Well that's not exactly how it works, but:

All online systems lack security by the very fact that they are online.
Even a biometric system doesn't solve this, because if
the system is compromised, it can simply be routed around.

That's why cold storage is the critical solution for savings.

Whatever wallet you choose, you should be keeping
your coins offline except what you need for spending
in the short term.

[elasticband]

it's actual more like cash in the old style swiss bank account.

[Anders]

That's way too old tech for me. I don't even want to back up my computer files locally! I want it all on the cloud. At the same time other people may want to handle their own security and privacy. So both options should be available for Bitcoin.

I don't know if a personal ID could be added to the Bitcoin protocol. It would be powerful if both personal IDs and ordinary Bitcoin addresses could be used. I would then store most if not all of my bitcoins (if I had any) with my personal ID so that they would be secure automatically. Another person may want to do the opposite and store most of his or her bitcoins with Bitcoin addresses and only a few if any bitcoins with the personal ID. That allows maximum personal freedom and flexibility.

The problems starts when your "personal ID" gets compromised.

Biometrics and things like that are probably needed. So I admit that it's a tricky and big problem to solve.

Its a problem that doesn't need solving, certainly not at the protocol level anyway.
If there is a demand for it, some entrepreneur will create a biometric wallet.

And it is a very ill-conceived idea to start putting any kind of personal IDs
into the protocol.  From there,  it is a slippery slope to dangerous regulation and control.

Big no on that.

But how is Bitcoin going to compete with new cryptocurrencies that will use personal IDs? Bitcoin would be relegated a shady underground currency for drug dealers and pimps, ha.

[TookDk]

Well that's not exactly how it works, but:

All online systems lack security by the very fact that they are online.
Even a biometric system doesn't solve this, because if
the system is compromised, it can simply be routed around.

That's why cold storage is the critical solution for savings.

Whatever wallet you choose, you should be keeping
your coins offline except what you need for spending
in the short term.

Exactly.

Having a huge saving in the bank can be compared to have your funds online.
... and if you trust your bank with your entire saving then... well either you have balls or are stupid.

[TookDk]

But how is Bitcoin going to compete with new cryptocurrencies that will use personal IDs? Bitcoin would be relegated a shady underground currency for drug dealers and pimps, ha.

Lolz... you missed the point with bitcoin entirely.

[Anders]

All online systems lack security by the very fact that they are online.
Even a biometric system doesn't solve this, because if
the system is compromised, it can simply be routed around.

That's why cold storage is the critical solution for savings.

Whatever wallet you choose, you should be keeping
your coins offline except what you need for spending
in the short term.

People said the same thing about money transactions before Bitcoin was invented. Bitcoin changed the way online security could be managed. And something similar could happen to the personal ID problem today.

[jonald_fyookball]

But how is Bitcoin going to compete with new cryptocurrencies that will use personal IDs? Bitcoin would be relegated a shady underground currency for drug dealers and pimps, ha.

Lolz... you missed the point with bitcoin entirely.

uh...yeah.... we-track-you-coin  is going to outcompete Bitcoin.    

[Anders]

But how is Bitcoin going to compete with new cryptocurrencies that will use personal IDs? Bitcoin would be relegated a shady underground currency for drug dealers and pimps, ha.

Lolz... you missed the point with bitcoin entirely.

uh...yeah.... we-track-you-coin  is going to outcompete Bitcoin.    

The "we" in this case is everybody. Since the personal IDs are public for everyone. Not just something the NSA could track.

[jonald_fyookball]

But how is Bitcoin going to compete with new cryptocurrencies that will use personal IDs? Bitcoin would be relegated a shady underground currency for drug dealers and pimps, ha.

Lolz... you missed the point with bitcoin entirely.

uh...yeah.... we-track-you-coin  is going to outcompete Bitcoin.    

The "we" in this case is everybody. Since the personal IDs are public for everyone. Not just something the NSA could track.

well... my suggestion is start a poll... see how many people would prefer Bitcoin to have personal IDs.  Put your theory to the
test and you'll get an idea of how feasible it is for that to happen.

[TookDk]

But how is Bitcoin going to compete with new cryptocurrencies that will use personal IDs? Bitcoin would be relegated a shady underground currency for drug dealers and pimps, ha.

Lolz... you missed the point with bitcoin entirely.

uh...yeah.... we-track-you-coin  is going to outcompete Bitcoin.    

The "we" in this case is everybody. Since the personal IDs are public for everyone. Not just something the NSA could track.

But what should you do if you "ID" gets compromised? Generate a new "ID", and when that is being compromised, then generate a new. And who should administrate the ID's, that would require a central authority. Bitcoin can provide you with decentralized system of consensus - and that IS THE POINT.

[Anders]

But how is Bitcoin going to compete with new cryptocurrencies that will use personal IDs? Bitcoin would be relegated a shady underground currency for drug dealers and pimps, ha.

Lolz... you missed the point with bitcoin entirely.

uh...yeah.... we-track-you-coin  is going to outcompete Bitcoin.    

The "we" in this case is everybody. Since the personal IDs are public for everyone. Not just something the NSA could track.

well... my suggestion is start a poll... see how many people would prefer Bitcoin to have personal IDs.  Put your theory to the
test and you'll get an idea of how feasible it is for that to happen.

On a second thought, to have the personal IDs visible on the block chain could be problematic. What if criminals found out who had a lot of bitcoin and then robbed those people. Maybe the IDs could be stored encrypted on the block chain. Anonymous payments and still the bitcoins safely stored on the block chain!

[Anders]

But what should you do if you "ID" gets compromised? Generate a new "ID", and when that is being compromised, then generate a new. And who should administrate the ID's, that would require a central authority. Bitcoin can provide you with decentralized system of consensus - and that IS THE POINT.

The personal ID system would have to be controlled by a centralized authority I guess. Unless someone comes up with a clever solution for decentralizing that! Remember, Bitcoin changed the way people believed what was possible. New information technology inventions can do that again.

[Anders]

To just throw up one's hands in resignation and store the bitcoins under the mattress is like going back to the days of Gutenberg. So we have this powerful new technology of Bitcoin and we stored the coins.... on paper?! How pathetic is that?

[franky1]

any other form of ID can be used or abused the same way a privkey can.

The IPv6 personal ID system I was thinking about would be secure. It's true that no such system exists today as far as I know yet it's probably coming soon to a ID card near you...

ok lets say transactions can only happen if using your IP..

well hello trojan.. sitting on my PC using MY IP.......... goodbye funds

again IP address and passwords, and seeds all require your computer at some point.. which CAN BE COMPROMISED

brain wallets are the same as privkeys. a long entropy which most people store offline as they could mis-spell it or forget one word and mess the whole thing up. so if your going to store a brain wallet safely offline. you might aswell save time and just save the privkey offline, instead.. its the same thing

storing a privkey, a username and a password and a third login procedure offline.. is futile, because as soon as you use them on a online system, they can be compromised. so 1 or 50 authentication requirements makes no difference.

your privkey is all you need to keep safe.. so keep it safe!

here is 3 solutions
1. use a computer system that only stores bitcoin and only goes online to push a signed transaction. no dodgy games you download from torrents, no going to facebook or porn sites.. no downloading altcoin clients........just use it for bitcoin transactions only

2. a hardware wallet that makes the signed TX. EG a smartphone with the antenna ripped out. that you use the camera to scan the QR code of the destination, you type in the amout you want to send, and the screen shows the QR code of the signed TX. your online computer or cashiers terminal scans the signed TX to send to the network.

3. privkey saved offline. and online put on your computer after ensuring no virus exists to instantly empty it. .. then quickly do the transaction and put the change onto another privkey you prepared offline

[TookDk]

The personal ID system would have to be controlled by a centralized authority I guess. Unless someone comes up with a clever solution for decentralizing that! Remember, Bitcoin changed the way people believed what was possible. New information technology inventions can do that again.

The centralized control of the ID, will be far more weak for the system, than having the user to secure its own private key.
The invention "bitcoin" and what makes it special is the decentralized system of consensus, this is the strength.

I collect and trade physical coins. I am not saying that we should use physical coins as a monetary system.
But the they are brilliant to learn people the concept about private keys. If the hologram on the back is broken then is your key compromised.

The bitcoin user should not have one private key, with all the funds he or she owns, he should have many (there are plenty available ~2^140).
Hotwallet, coldwallet, a stack of private keys with small amounts on, a paper wallet, a brink in the wall with a private key etc.
Never put all the eggs in one basket.

But yes, I follow you in what you are saying. For the average none-tech user is this rather complicated.
What is needed is online services for holding some of your bitcoins, and they should have insurance - so in case you get scammed or robbed, then should there be an insurance to cover.
All credit cards has the same problem, nobody would buy anything online if there was no insurance on you card.
Hopefully this kind of insurance will come one day.

But I still believe, that you need to take care of your saving your self!
You cannot rely on a bank to do this for you, if you do so, then are you blind.

*edit the private key not nessearly need to be on a piece of paper, it could as well be an encrypted file... (I just like paperwallets, but some of my paper wallets are also backed up with a JPEG that is heavy encrypted)

[SgtSpike]

IPv6 can be spoofed, just the same as IPv4 can be spoofed.  There's nothing stopping anyone with a computer from sending out a packet that says "hi, I'm from IP 123.456.789.123" (I know IPv6 is different format, but you get the point).

[TookDk]

IPv6 can be spoofed, just the same as IPv4 can be spoofed.  There's nothing stopping anyone with a computer from sending out a packet that says "hi, I'm from IP 123.456.789.123" (I know IPv6 is different format, but you get the point).

You can also break into the home of the personal to be robbed and use his wire to go online with his IP - not secure enough for securing funds.

As already said: keep your keys secure