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I think hardware wallets (like the Trezor), or smartphones with a TPM module is the solution.

This will take time, however (the latter more than the former).

The reason it will take time is that the concept of storing your own money digitally, like is the case with Bitcoin, is an entirely new concept that software and hardware needs to adapt to. With all other solutions (VISA, PayPal, bank wires), you're asking someone else to transfer your money, with Bitcoin you're doing it yourself. Basically, each user needs a greater level of security than PayPal, VISA and banks have internally, since Bitcoin payments are generally irreversible after an hour or so (and often much sooner).

This isn't something that is done overnight, and people have started working on it, but it takes time to, first of all, develop the hardware, and, second of all, develop and implement the interface between the hardware wallet and the actual payment request (ie. when I arrive at a BitPay invoice payment page, how do I pay using my hardware wallet?).

Your question doesn't make sense to me.

> when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?

As you point out in your own statement, there are companies meeting the need for a "turnkey solution": you list Coinbase and they are an excellent example of a company doing that well and being quite successful at it.

You apparently reject them because working with Coinbase requires the customer to "trust their coins to a third party service". Trusting the third party service is pretty much mandatory for using ANY third party service. Imagine a hypothetical service that provided "turnkey" software to store wallets on your own computer -- you would still need to fully trust the provider of this service to ensure that they actually stored the money rather than siphoning it off someplace else.

The only way to (mostly) avoid having to trust a third party is to avoid using a "turnkey" solution that is fully packaged without user serviceable parts. You would instead need to learn on your own how to safely store the coins yourself. Which is ALSO a choice, and many people do it. You complain that it takes "a solid week" to learn how to do this -- and indeed, it does take a few days to become an expert on any subject; there are 10 minute tutorials, but I presume you (rightfully) reject them as being insufficient to really teach a user enough to be fully safe.

Honestly, I think that you are just being unreasonable in your expectations.

there are companies meeting the need for a "turnkey solution": you list Coinbase and they are an excellent example of a company doing that well and being quite successful at it.

And if Coinbase goes bankrupt, all their users lose all their money.

I've written about this extensively several times before, so I won't rehash the old points. But the summary is, if you trust your money to an entity that doesn't have insurance, you're being very, very brave. Coinbase can go bankrupt for a multitude of reasons, some of which aren't fair.

One could counter this with, "Don't store very much money in Coinbase." Sure, but then consumers don't have much money on hand to buy things on a whim, which reduces consumer adoption. That's why I've been saying: Make bitcoin safe, and adoption will follow.

So can a bank and you will loose all your money just ask the people of Cyprus.

Bitcoin has been around for 4 years banks for several hundreds.

Your point is true but trivial and hardly says anything conclusive or useful other than you don't trust 3rd parties.

With time you wont have to.

> So can a bank and you will loose all your money just ask the people of Cyprus.

This is a silly comparison. In the USA, all deposits under $200k are guaranteed by the FDIC [1]. If the bank folds, you still get your money from the federal government. I imagine many similar institutions exist in other countries.

Why there was no such institution in Cyprus baffles me. Perhaps they haven't had to deal with institutional bank failures before. The point is that deposits in Coinbase or other bitcoin institutions are not covered by any such insuring body. They are hence inherently far riskier.

It all comes down to likelihood of failure. When institutions like coinbase fail, we call that "thursday". But if the FDIC folds, you should be less worried about your money and more concerned about hoarding ammo and cigarettes.

1. http://en.wikipedia.org/wiki/FDIC

The Cyprus banks didn't fail, the government confiscated a fraction of account balances. The FDIC guarantee wouldn't help you in that situation or many other types of national calamities.

You could use multisig transactions so that you don't put your trust centrally in one third party service, for example you could trust three independent services to each hold a private key, that way 2/3 would have to be compromised at the same time in order to for something bad to happen. For more robust security you could add services and need 3/5, 6/10, etc. I'm not sure of the exact implementation details, but in theory I think that would be one solution.

> https://en.bitcoin.it/wiki/Contracts#Theory

Unfortunately, the naive implementation of this precludes day trading.

> Your question doesn't make sense to me.

It is because you don't understand the nature of bitcoin or it's colorful history with third party services like Coinbase. The question is a good one and not at all unreasonable if you understand bitcoin. The system is supposed to be trustless, and one aspect of this is that you don't need a trusted third party to conduct safe and fast transactions with another individual. Another aspect is that you don't have to trust someone else to hold your money, but then of course the security is up to you, which has so far been something of a problem.

As others have mentioned, multi-sig addresses are one part of the solution (doesn't BitGo support these now?), and another is potentially a hardware solution. But the current Coinbase offerings are inadequate, and those types of solutions will eventually be replaced or people will continue to lose their money when they trust someone else with their private keys.

There is no insurance for stolen, hacked, or otherwise lost keys. In the banking system, when money is "lost", the loss is spread out among everyone, which is nice if you were the affected party but is a pretty raw deal for everyone else (cf. banking crisis of the past 5+ years). When bitcoins are lost, there is no recourse.

> So, when can customers expect their money to be protected after they convert their savings into bitcoin, without trusting their coins to a third party service like Coinbase, and without spending a solid week learning how to safely store their coins themselves?

Given the huge amount of developer interest, I'd be pretty surprised if several groups of smart people aren't kept awake at night by their awesome ideas about how to fix this.

There is people working on that issue. For example Trezor is an easy to use bitcoin safe. I think it's headed in the right direction: http://www.bitcointrezor.com/

Here's the Bitcoin theft reference: https://news.ycombinator.com/item?id=7233230