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Comment by bodski | Hacker News Reader

Don't forget, 'real' bank accounts work like this as well. The money is no longer yours once you deposit into an account. The bank represents it as a liability on its balance sheet. As an account holder you are an 'unsecured creditor' of the bank. I have a feeling a lot more of us will be aware of this arrangement within a year or two, once the bail-ins begin.

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US banks have FDIC insurance to protect deposits up to $250,000 [1]. To the extent that you trust the US government you can trust that your money is safe in a US bank up to the stated FDIC limits. Banks fail all the time. There have been 8 failures in 2014 so far and not a single penny of depositor money has been lost. You can see a list of every bank failure and the outcome here [2].

The simple and incontrovertible fact is that the US banking system is as close to 100% safe as you can get. Bitcoin isn't anywhere close.

[1]: http://www.fdic.gov/deposit/index.html [2]: http://www.fdic.gov/bank/individual/failed/index.html

Be careful regarding FDIC insurance. Most investment instruments: stock, bond, mutual funds are not covered by FDIC protections. [1]

[1] http://www.fdic.gov/consumers/consumer/information/fdiciorn....

False.

In many countries currency deposits (up to a certain level) are protected by law and government guarantees.

I didn't say you won't get your money but that legally speaking the money, once deposited, is not yours any more, it is an asset of the Bank. This is why you'd need insurance/government-guarantees during a bank failure, otherwise you'd be treated just like a stock or bond holder who holds no collateral.

"From a legal and financial accounting standpoint, the term "deposit" is used by the banking industry in financial statements to describe the liability owed by the bank to its depositor, and not the funds that the bank holds as a result of the deposit, which are shown as assets of the bank." - http://en.wikipedia.org/wiki/Deposit_account

"Bank deposits are simply a record of how much the bank itself owes its customers. So they are a liability of the bank, not an asset that could be lent out." - p.http://www.bankofengland.co.uk/publications/Documents/quarte...

Your intention was to imply the risk was the same. This is not true.

http://www.fdic.gov/deposit/deposits/

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