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Comment: Re:third party risk (Score 1) 285 285

I didn't mean that you said it eliminated all risks. I meant that there wasn't even one risk that was eliminated (though perhaps some were reduced). Unless you're building your own computers from components that you manufactured, you're making your own operating system, you're making your own bitcoin software, and so on, you are taking on third party risk that cannot be eliminated because you're accepting and using security-critical components developed by third parties. Unless you are literally generating your key by pencil-and-paper calculation (which is not the normal way of doing things by the design of bitcoin because it raises the risks of insufficient randomness and human error), your offline wallet's key was almost surely on a computer and an operating system that might have been compromised while the key was present or the system might not have deleted it.

All transactions being recorded may be a feature, but it still greatly reduces the strength of your argument about spying, particularly when statistical analyses are used.

It may happen that if bitcoin changes due to legal pressure, people will move to other currencies, but there are a lot of reasons not to assume that's a sure thing. Bitcoin will already have been established and working which will reduce the drive to switch, the risk of such a thing happening again will dampen enthusiasm, the newly-explicit lack of legal legitimacy (which hampered bitcoin growth) will hamper growth, and there's a high chance that alternatives will be permanently stuck with just about only enthusiasts as users.

Comment: Re:third party risk (Score 1) 285 285

Bitcoin can't be designed to eliminate any risk at all. There are security holes in all computers. Offline wallets are vulnerable to theft. All transactions are recorded somewhat permanently for anyone, including the government, who can and probably is permanently recording all of them. The way bitcoin works is changeable in just about any way by a vote of the miners, a large proportion of whom can be pressured legally, because the big mining operations are publicly known.

Not only that, but it's designed in such a way that it's very, very difficult to secure properly. This is why people use third parties who presumably know how to handle the security.

"Silent gratitude isn't very much use to anyone." -- G. B. Stearn

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