Bitcoin's Biggest Problem: It's a Den of Thieves

If Bitcoin's ambitions are only to replace physical cash transactions, then sure, it works. (and that's no small success!) But if we are talking any kind of online transaction with delayed gratification, then trust is required, as is a recourse when things go wrong.

Actually it seems that credit/debt was usually the standard and not cash per se, at least if David Graeber's book on the history of debt can be believed ("Debt: The First 5,000 Years"). While cash has certainly been used since antiquity, most transactions were on credit, even before Western Europe exited the Middle Ages, with cash limited to certain purposes and/or segments of society.

Why do you say so, apart from ideology? The history of money and credit transactions suggests the opposite; consumers in fact clamor for transactions to be reversible. Do you have any evidence to support your claim?

There is. You can print out the private key and lock it away in a safe.

1. A flaw is discovered in the Bitcoin client.

2. A flaw is discovered in the public key cryptography algorithms the network uses.

3. An attacker has control of more than 50% of the processing power of the whole network.

The first two vulnerabilities are common to any system dealing with finances.

The third vulnerability is particular to Bitcoin, and would allow an attacker to "double-spend". This is because Bitcoin relies on a CPU-majority to determine which transaction came first, rather than a central authority such as a bank.

Another point to note is that normal bank transactions can be reversed if fraud is detected, but bitcoins are like physical cash in that there's no automatic mechanism to void a transaction.

There are ways of securely storing bitcoins, but the organisations and high-profile individuals who have been hacked have not had security even close to the level you'd want for storing hundreds of thousands of dollars.

Centralized digital currencies (eGold?) have been around, but their problem is twofold in that they are more vulnerable to single points of attack and more importantly, can be shut down by governments.

I don't know if there have been any real efforts yet to crack down on Bitcoin but it seems well positioned to survive such an attempt.

If you're talking about the psychology of the market or your own emotions, that's a different can of worms.

Two that I looked at were https://www.strongcoin.com and https://www.blockchain.info, the latter winning out after some test driving, just because it is larger and has a nice Android client.

(I'm very skeptical of bitcoin, but if this were the only problem, it would be worth working around it. At least for me, but then I know/like digital security...)

I have the same condition, selectitis. Drives the people around me mad when I'm clicking loads and I don't even notice. And websites that do things on select like pop up a definition or search box are really irritating to me.

The worse offenders are whole rectangular paragraphs that behave as a single button, and text input fields that don't get recognized when I click on them on my android browser (Coursera, I'm looking at you).

You assign agency where there is no entity.

Fool me five times?