Not quite true.

If you're talking physical cash, a person would have to get to the physical location to take it (as opposed to being available to everyone in the world with an internet connection).

If you're talking digital cash in a bank, most banks have a form of insurance that will cover your losses (for example, most US banks are FDIC insured and cover up to $250,000 USD in losses).

Stock assets may be the closest comparison, as brokerage firms aren't backed by an independent agency, and losses that occur from cyber-theft would only be reimbursed if the firm wanted to.

Stock trading accounts in the US are backed by the SIPC up to $500k (even for non-US persons). This protects you from an all-out insolvency of the institution, which would happen if somehow they had all their money stolen by hackers.

But it does not protect you from hacking of your individual account. If someone tricks your broker/custodian into selling your stocks and wiring them the money, SIPC (perhaps surprisingly) will not save you.

See: http://www.reuters.com/article/us-investing-hackedaccounts-i...

How does one determine a qualified third party?

Obviously you can't go with "You can trust us, we know what we're doing"

You could find a party that is endorsed by someone going "You can trust them, They know what they are doing, Trust us on this, we know what we're doing"

But that just moves the point of concern.

Is there yet any "You can trust them, if we are wrong about that we will cover your losses" insurance. (even then how can you be certain they will follow through)

>How does one determine a qualified third party?

Surely you wouldn't store your cash in a bitcoin exchange? It's not a bank.

With bitcoin you don't even necessarily need a third party, a hardware wallet could do just fine. That can be stored in a safety deposit box if you feel like it.

>Is there yet any "You can trust them, if we are wrong about that we will cover your losses" insurance. (even then how can you be certain they will follow through)

While you can certainly insure anything if you pay enough, I don't think there's anyone publicly offering that in the crypto space. But then there doesn't seem to exist a similar mechanism for USD accounts of any significant size either.

"quis custodiet ipse custodies" (who guards the guards themselves) by Juvenal in the first century seems to be the root cause of so many modern issues - from finance, to politics, to automatic server monitoring.

I'd say it's a little harder than not losing cash. If you put cash in a safe, you can be confident that an attacker can't take the cash without getting into the safe. If you put bitcoin in a safe, an attacker can take it without ever getting into the safe if you happened to forget about a copy of your private key somewhere else.

Surely you would generate a new key to put in the safe if you had to worry about that.

And anyway, robbing safes is easy. But try emptying a bitcoin wallet encrypted with a good password, it's very easy to make impossible.

> a bitcoin wallet encrypted with a good password, it's very easy to make impossible

There's the problem with adoption. "SFYL you should have been smarter" means there will always be a % of the population who should never use it.

Nothing is impossible in the digital realm. And the bad guys are ALWAYS better than the good guys.

Surely, but that requires more knowledge and care than securing cash.

Producing a long random string to use as a password? Not particularly.

Most people have no idea what a long random string would even look like.

I think you're seriously underestimating most people. "Long random string [of letters and numbers]" is rather self-explanatory.

Dealing with nondevelopers, never say "string". Did that once and the person on the other end of the phone was obviously confused. After 2 seconds, realized how bizarre it sounded.

I think you're seriously overestimating most people's ability to think when presented with anything remotely computerish.