Re:Hacker Redirects Traffic From 19 Internet Providers to St...
by bmm6o on Friday August 08, 2014 @02:36PM
(#8154368)
Exactly. Nobody is going to want to manage their own bitcoin holdings, much as I don't keep all of my savings in a safe in my house. So that gets out-sourced and insured, and somebody has to pay for that. I expect it's much less than the credit card's take, but when it's paid for by the consumer it's much different psychologically. Consumers are going to have to get a cut of the savings.
If your private key is compromised, the thief takes your entire balance, and there's nothing you can do about it. So you really want to keep it safe.
Lose your private key, lose everything it was protecting. So keeping the key in only one place, and one place where only you can access, is a big problem. There is nobody out there to give access to your money if you pass away. A hardware failure can be catastrophic.
The problem is that everything that makes the private key survive accidents makes it easier to hack. The way we treat something like this in a corporation is with things like shared secrets: Need 3 out of 5 people to use their issued keys so that the real private key protecting everything is revealed. And even with that level of effort, getting the key is still possible with enough effort.