If a real bank gets robbed you still have your money though. Who is going to offer the same or similar security to protect your bitcoins even if there are more investors or it becomes more mainstream?
FDIC types of insurance aside, people keep making analogies about 'robbing a bank' when the better example for Bitcoins is that the bank has a pretty high chance of simply robbing you. That's an issue well beyond the game fussel keeps playing about insisting as long as you keep your wallet file safe that you are secure. How does my wallet file prevent exchanges and other 3rd parties from stealing or having issues and taking all the coins with them? Should my coins never leave my wallet? What good are they then?
You don't have your money when it's at your bank. You have the promise of the bank to get an amount of money from the bank according to your account balance when you withdraw. This promise might even be insured by laws and contracts.
Actually, even the bank might not have your money in a fractional reserve system.
Nobody is offering that yet. But I'm not entirely sure if this applies here. Keeping your bitcoins safe is a matter of keeping a private key safe and secret, which has other requirements (encryption, backup) than keeping physical bank notes safe.Who is going to offer the same or similar security to protect your bitcoins even if there are more investors or it becomes more mainstream?
So am I totally off base is my understanding that it is, at its source, an unsecured bond?
There's no problem having more than one wallet. Look, with fiat money, I have a savings account, a checking account, a debit card (with an artifical limit, so nobody can use it to clear out my checking account at once) and cash.
With BTC I have an offline paper wallet (sitting at home, private key was never exposed to an online PC), a MultiBit wallet on my PC (which I consider mostly secure) and another one on my mobile phone (which I might lose, same as cash). I also have an account at an exchange which has a balance of zero, unless I'm buying BTC.
Thus boils down to BTC being unnecessary in the minds of most people. Why do I need to use it? As an investment it's nightmarishly volatile and as a storage system it's needlessly complicated and still too volatile. If I really want to protect my money against USD shifts then I'd convert to other fiat currencies, US treasuries or the bond market.
Start a Roth IRA. Depending on how much risk you can stomach you can tune where your money is invested and at what %. I use Fidelity to manage mine and I have no complaints. Fees are very low, return is ~5-7% for me.
EDIT: If you are looking to day trade or self-manage a portfolio I'd do a LOT of research beforehand. I don't find it worth it for me.
thanks for killer explanation on how banks work, i wasn't paying attention in 5th grade
lol, you guys know you can use a real bank to store your bitcoins, right? Using some online bitcoin wallet as if it were a bank is about as stupid as using paypal as if it were a bank. If you have enough bitcoins to be worth seriously worrying about, put them in a safety deposit box.
Heh, if you re-read my posts, I never argued against what you said in that post in the first place.
My point was that fiat money and our banking system also have their issues, and that MtGox and other exchanges being hacked doesn't infer that bitcoins are easy to steal if handled properly.
http://imgs.xkcd.com/comics/duty_calls.png
The publication I work for started accepting bitcoins.
http://www.pcworld.com/article/21401...-bitcoins.html
This is going to be an interesting week.