[Cryptography] Bitcoin theft and the future of cryptocurrencies

Phillip Hallam-Baker phill at hallambaker.com
Sat Dec 16 14:25:57 EST 2017


On Wed, Dec 13, 2017 at 5:21 AM, Georgi Guninski <guninski at guninski.com>
wrote:

> If your bitcoin wallet is compromised, all your bitcoins are gone
> forever. With a credit card, you have some chance of only minor
> damage. If your computer is owned, your wallet is at risk.
>
> This appears major problem for the widespread adoption of bitcoin
> IMHO.
>

​Since a vast proportion of the market cap of BitCoin has been stolen at
some point, clearly it isn't a bar to whatever it is Bitcoin it adopted
for. It does disqualify it as a payment transfer system.​



> Fixing it appears to contradict decentralization, which opens another
> can of "worms".
>

​Here is the central problem with BitCoin. Proponents wave away all
objections claiming that cryptocurrencies are in their infancy and these
will be solved. What they refuse to acknowledge is that every solution to
these problems that has shown to work in practice requires the introduction
of the trusted third parties and intermediaries and regulation that they
claim to have made obsolete.

Its like taking the alternator off your car and showing it will still
start, it just won't run for very long without tons of batteries and that
therefore the alternator was never necessary because someone will find a
solution that doesn't need such big batteries. Of course such a solution
already existed and was known - the alternator.



> Potential approach is to use "trusted wallet proxy", but this may not
> work in practice.
>
> Are these concerns taken seriously?
>

​Not by enthusiasts. ​



> Any technical attempts at mitigating cryptocurrency theft?
>

​None that I can see.​
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