Those are very fair points. I do feel like we are better protected when it comes to these instruments, though. For example, when someone used my credit card number to buy a bunch of computer equipment from a company that supplies that stuff to businesses, I was able to clear it right up. If I get mugged and someone steals cash from my wallet, I'm probably out of luck.bitcoininthevp wrote: Do you hold all of your stock and bond certificates tangibly? What about cash?
Putting myself out there digitally (credit card) makes it easier for thieves to steal in the first place. Oddly, though, I feel more comfortable physically walking down the street with an ATM/credit card and very little cash because of the systems in place to protect me. Not perfect, but good.
Stocks are a little different. In addition to the regular risk that a stock may naturally fall, there's the chance of corporate mismanagement and finally, the perennial fear (in some hearts) that "the system is rigged." But, the intangibility of my stock holdings is not an issue because I trust my brokerage houses. They're not perfect, but they make me feel safe, even if that's an illusion. A stock certificate could get torn apart by a pet or lost in a flood, easily.
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.
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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?