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Comment by ch0wn | Hacker News Reader

Bitcoin is not money on the bank, but cash. If your wallet is stolen, the bank will not refund you, either. You can, however, go to the police and that is what the victim here is doing as well. There is, of course, a much lower chance of catching the thief than there would be with real cash.

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Yep, which is why if you have $500K you keep it in the bank and not in your wallet. (Err, not that $500K would fit in your wallet, but anyway...)

Bitcoin has no "bank" equivalent.

Except you can put a wallet on a thumb drive, and literally put it in a bank (safe deposit box).

Though interestingly, your bank isn't generally required to repay you for losses in your safe deposit box unless it arises from their negligence.

Exactly, make sure the only copies of the wallets with your money are on non-networked, non-running hardware, preferably just straight up storage media, and secure it physically. You can make it as secure as you can possibly make anything. Hell, you could even get it insured.

Probably makes sense to print it out on a sheet of paper and put it in there too.

What do you call exchanges that hold an on-site balance?

I'm also fairly sure there are several brands trying to provide a "bitcoin banking service".

not decentralized?

I have spent very little time thinking about bitcoin, so I really am not qualified to say anything for or against it - however I have a question that seems ridiculously obvious:

WHY would you implement the digital version of cash, as it seems you just stated -- WHY would you create a digital currency with no ability to really track and disable and refund?

Overhead is (supposed to be) lower with cash.

Kind of the whole point of digital currency is to evade tracking. A currency that is truly anonymous is more generally useful than one that isn't. The same features that make it easy to steal also make it easy to spend.

The US government won't let you leave with more than $10k in physical cash without "declaring" it, but declaring exposes you to likely theft by the government in the form of civil forfeiture or tax seizure, as does carrying it past TSA. Your bank won't let you wire-transfer large amounts without having to file a bunch of CTRs, again exposing you to potential legal liability. Making transactions in smaller amounts to avoid notice of the big amounts - even if you're doing so to avoid private thieves - is a federal crime called "structuring". Credit card companies solve some of the problem but can randomly "put a hold" on your funds without your consent.

Digital cash is trying to fill the role that cash used to fill before the War On Some Drugs made everything insane. Back when the government printed $500 bills and $1000 bills and it wasn't deemed "suspicious" to use them. In the modern age, digital cash promises to let us buy things around the world, "no questions asked", without banks and governments and other middlemen getting in the way.

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