>between two entities usually consists of a heavily guarded, insured, physical shipment of cash or gold.
Err, life isn't a james bond movie. For money transfer like this we use bank wires. We dont buy gold and ship it on gunships anymore.
Err, life isn't a james bond movie. For money transfer like this we use bank wires. We dont buy gold and ship it on gunships anymore.
http://rt.com/news/gold-shipment-stolen-france-304/
http://www.reuters.com/article/2013/05/16/us-usa-miami-gold-...
http://rt.com/news/bitcoin-hacking-stolen-million-417/
http://www.nbcnews.com/technology/250-000-worth-bitcoins-sto...
http://www.esecurityplanet.com/network-security/czech-bitcoi...
edit: unrelated, someone should make an index of how many Bitcoin threads hit the front page of HN per day.
The advantage, however, is you don't have to worry nearly as much about the security of a transaction (moving it from one place to another)
It's just much harder compared to doing comparable or greater value destruction to a bitcoin address, especially accidentally.
1) gold can be stolen due to mistakes
2) bitcoin can be stolen due to mistakes
but this does not mean that it is impossible to avoid having either stolen.
I agree that long term storage of both of these can be done very securely, but the risk for both is when trading or using them. Additionally, Bitcoin does require a lot of worry about security - how many people do you think have airgapped wallets?
Aren't the facts that you shouldn't store Bitcoin at exchanges, should use an airgapped storage mechanism, and are otherwise out of luck if your computer is compromised, enough to demonstrate that you also have to worry a lot about the security of Bitcoin transactions? Your stack of gold ingots won't vanish if you take one from the pile in your safe, but your Bitcoins can if you don't take stringent precautions.
If you view a Bitcoin transaction as only what happens on the blockchain, you're missing the context of where it occurs - which gives both gold and Bitcoin risk.
But since Bitcoin is digital, its maximum security is far, far higher. Your private keys can be encrypted and safely stored with any desired level of redundancy. Paper wallets are a big step backwards.
Also, if secret sharing is used, Bitcoins cannot be stolen unless the attacker gets to k of the n involved parties.
Hardware wallets should help immensely as well.
As with _all_ security, there's a tradeoff between security and convenience. Inline wallets are spectacularly convenient - and guess what that implies security-wise?
Paper wallets are much more hassle. But a paper wallet in a bank vault is arguably up there with the most secure bitcoin storage techniques.
As the stored value of your bitcoin varies - so should your security requirements. If I need to keep under $100USD available to pay for my anonymous vpn or my torrent-box vps - an online wallet (who's operator could make off with my half or quarter of a bitcoin at any time) might be a sensible choice. If I'd been mining bitcoin at a reasonable rate since 2009 and was sitting on a house-worth of bitcoins, I'd make a _very_ different choice.
Consider the value of your wallet(s) - if they were piles of $50 notes, how much would you spend securing that? Would you leave it in your pocket? Hide it under you mattress? Buy a lockbox or a safe for your home? Rent a safe deposit box? At what stage is a never-internet-connected laptop a perfectly sensible expense to incur? I'd suggest a lot of people I see posting in forums about how much they lost in onine-wallet-hack-de-jour who should be kicking themselves for not having a dedicated $300 laptop fr storing their wallets on.
Adding a BTC to a transaction doesn't really require any additional infrastructure. But once you've packed your first tanker with gold, you kind of have to hire a second boat.
Given the way each scales, it seems that BTC transfers are easier, at least at some values.
All I was saying was that physical stores of value increase in awkwardness (principally through weight and volume) when you increase their number, not so for digital.
Challenges in movement of large sums of gold: http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-...
Here's what $300 Billion in gold looks like: http://www.celebritynetworth.com/articles/entertainment-arti...
(Note that it would be harder to transport, than, say, the amount of gold one can fit in a pocket.)
I don't understand how so many sites can't use password hash generation to secure the private keys, or something to keep it more secure. The first link you posted was a site run by an 18 year old.
Pinkie Pie won his first $50k award by creating a 0-day sandbox escape on Chrome, by chaining 10 different vulnerabilities. He was 19 (now almost 21). Two years before, at 17, he released jailbreakme.com, all by himself, which was a 0-day able to jailbreak all iOS models shipped to date by just visiting a website.
Age means nothing by itself, but the point is correct. The problem is that we don't know how much we can trust bitcoin site owners, as most of them are relatively new with no history to inspect, closed source, and sometimes even run by anonymous users whose experience we can't inspect.
But do you know _anybody_ who would deposit money in a bank run exclusively by an 18 year old?
Coding skills can be created and honed by highschoolers - business, legal, and commercial experience - very much less so.
But I think it's extremely rare in the cases you mentioned.
Think of them as like keeping your change on the bar - the security relies _purely_ on social conventions encouraging the bar owner, bar staff, other customers, and your friends to not take your money.
You would no more store your weekly pay, your rent money, or your new car savings on the counter at a bar - why the hell are people storing those sorts of values of bitcoin in other people's webservices?
Sure, online wallets might be _useful_, but anyone keeping any more value than they can afford to lose in one is insane (or, less critically, very poorly informed).
I may be wrong here - but is the private key only required to send the money? So, if the user kept the key and it wasn't recorded on the server...or if they use some type of password hash for encrypting it, then there wouldn't be hundreds or thousands of wallets stolen at once. The user would enter their password when they want to transfer funds, the hash is calculated, private key decrypted, transaction made, and the private key is never recorded anywhere.
But, this would require the user to NEVER forget their password, or else they lose their money.
Something like that: http://influxdb.org/blog/visualizing_bitcoin_post_frequency_... ?
The equivalent commodity value in BTC can be stored on a tiny rom, and transferred anywhere in the world for free from anywhere with network access.
I hate to be cynical, because the ideals behind this currency seem nobel -- but I can't help but feel dread that it is only a matter of time before bad things start happening here.
Is this outlook too negative?
Corporations and individuals generally do not move wealth via physical assets.
Off the top of my head, I am thinking of ...
- A deep, pervasive culture of gold hoarding and gold wealth transfer for dowries (yes, even in 2013) for Indians.[1]
- Persians/Iranians who have a deep cultural link to carpets as a store of value that can be used in day to day life, but also transported and stored as value.
How about any middle american over the age of 50 who counts his or her "vehicle" as an asset and shops/deals in used cars every 12-18 months. A lot of people think about cars this way.
As for corporations just consider casino counting rooms and exxon tankers full of crude oil.
[1] http://www.bloomberg.com/news/2013-11-17/gold-laden-brides-i...
Like the first google result for payments volume yeilds this: http://www.gfmag.com/component/content/article/119-economic-... As you can see, credit transfers dwarf everything. It's worth noting that all of these payment types are cleared electronically (including checks).
I sincerely doubt gold bugs and Persian carpet fans are trading at total volumes of 100's of trillions of fucking dollars globally.
If someone in Argentina wanted to buy something from anywhere else in the world in 2000, for example, they'd basically have to trade natural resources or gold for access to foreign currency, and then spend that.
The political class here is crazy corrupt and rich like in every third world country, and they are known for using piles of 500 euros bills to stay out of the bank system because euros have more wealth density than dollars.
In fact, here we are ranked right under (20th) the US (19th) in terms of transparency:
http://www.transparency.org/country#CHL http://www.transparency.org/country#USA_DataResearch
Argentina is ranked 102: http://www.transparency.org/country#ARG_DataResearch
In all of Latin America, the closest countries to Chile in that transparency ranking are Costa Rica, with the 48th place, then Cuba 58th and then Brazil 69th.
Edit: added justification data with links / I'm proud of Chile
There should be a term for "third-world country that's probably going to stay third-world for the forseeable future, excepting a revolutionary change of government." Maybe... dystopia? Argentina is a dystopia.
Sorry, I don't think so. Chile is doing good nowadays but basically their only export is copper. Copper is a semi-precious metal right now and thats why that country suddenly has so much wealth, but the difference between rich and poor is abysmal and their economy is tied to the price a single non-renewable resource.
Compared to Chile, Argentina still has a huge tech industry capable of exporting value-added products like cars.
Yes, copper is selling very well, and it takes up a large proportion of the country's exports, but you are mistaken to think that this is the driving cause of the country's increase in wealth over the last 20 years.
The increase in wealth comes from the fact that incentives now exist for people to create wealth. Where wealth is created, there is more wealth. It's the same principle we have seen working throughout history.
for 15-20 years, third world in military terms at least, meant the signatory of NAM movement. fourth world was anyone left after that.
They need to fill documents to officially ask the government, which will likely refuse you the right if it is for a huge amount (remember, this 'non-change' policy is exactly for that, avoid flights of capitals).
In an interesting validation of basic economy, the black market rates are much closer to the official ones in rurual tourist hotspots, presumably due to the much bigger supply of foreign currencies.
with Bitcoin, fees are optional
Everyone just keeps (a huge portion of) their gold in a single vault. A gold transfer involves carrying gold bars from one compartment of the vault to a second compartment in the same vault.
Yeah and there is a fee involved too, right?