dualstow wrote:
If someone hacked into Vanguard, I think I'd still get my shares back eventually. And, if someone hacked into my bank and/or robbed my branch at gunpoint, I'd still get my FDIC-insured dollars.
I'd like to see the same thing from bitcoin, rather than, we're spreading the loss around to our customers even if they were not direct victims of the hack. Until then, as you have pointed out, we don't need those exchanges to store our bitcoins in the first place.
If the world, like you, demands insurance or a set of standards for bitcoin-related companies to adhere to before doing business with them, I believe those types of companies will appear and thrive. There are some starting. I suspect, and hope, that there will be a variety of *choices* in types of bitcoin companies. Some insured, some uninsured (and cheaper!), some getting together and following similar legal standards, some staying anonymous perhaps.
Coinbase is insured
https://support.coinbase.com/customer/p ... e-insured-
Others may follow suit.
What just happened with the bitfinex theft will help shape market preferences and people will vote with their dollars... or bits.
dualstow wrote:
What about spending the coins? I saw a couple of interviews in the past, possibly posted at this forum. It was a pro-bitcoin interviewer who scared me. He said that once someone tried to purchase something online and the "merchant" took his bitcoins and delivered nothing. The pro-bitcoin guy proudly announced that many people in the bitcoin community generously donated a coin each to the victim.
That's heartwarming and everything (and I don't mean that in a snarky way), but I don't think I'd like to depend on that. People have been known to buy entire automobiles with a credit card. After hearing this story, I'm not sure how I could feel safe exchanging $45- or $65,000 in bitcoins and then waiting for delivery. Or maybe there are new safety mechanisms in place since that story aired a few years ago?
If you are sending bitcoins directly on the bitcoin network to someone, its permanent. So someone can easily stiff you. So you need to be careful. Bitcoin is more merchant friendly and less consumer friendly in this regard. But how long will the market tolerate such actors? Reputation is important. Very similar to cash in this regard.
Merchants that use 3rd party payment processors like Bitpay are probably safer to use since Bitpay is the middle man in that, but even then I am unsure of the exact protections they have in place.
It is the wild west, but in some ways, isnt that the free market? Choice, I mean. Not a guarantee of safety.