Gavin, your ClearCoin project holds bitcoins on deposits. Can you direct me to the security standards that you are adhering to? Has a 3rd party audit been peformed to ensure that your organization is adhering to those standards? Have you subjected your infrastructure to any kind of penetration tests? If I have 1000 btc in escrow at ClearCoin and an act of God wipes out your server at 2:15PM on a Sunday afternoon, is money safe and recoverable?
No, no, no and yes. I'm planning on making the answers to all of those questions "yes" within the next six months, although I need to look at how many bitcoins are contained at any given time in the ClearCoin wallet; it might make more sense to send double or triple that amount of bitcoin to a publicly verifiable address, prove I own the coins, and guarantee any losses due to ClearCoin getting hacked.
(note: I just looked, and right now there are 540 bitcoins in the ClearCoin wallet, so spending $50,000 to protect them really wouldn't make sense).
More to the point, how can I or anyone affordably provide the same kind of fault tolerance and data security that a traditional banking institution would?
Yet another bitcoin chicken-and-egg problem that will get solved by investors taking a risk and giving bitcoin entrepreneurs the resources to do security right (or wealthy entrepreneurs stepping up and making the investment themselves).