12-07-2017, 10:54 AM
(12-07-2017, 10:41 AM)WRXtranceformed Wrote: Except legitimate financial institutions are backed by insurance and a lot of legal regulations to prevent your money from actually disappearing if a bank got hacked.
The analogy makes sense if you had your crypto in a physical wallet stuffed in your safe where it would be vulnerable to anybody willing and able to steal it like they would anything else you own. The point of a banking system is to have a safe place to keep your savings and investments that isn't stuffed under your mattress or buried in your yard. It's pretty clear that these exchanges aren't "safe"
I'm sure you could get an insurance company to cover it. If I put my gold coin in a local pawnshop to sell on consignment and he gets robbed, there's an almost zero chance I'm getting my coin back and I'm probably not going to get it's full value either.
It's important to note that in the NiceHash hack, it was NiceHash's bitcoins that appeared to be stolen. They were a mining collective, and would pay out at regular intervals, and so needed a wallet for users to mine 'to', so they could pay 'out' when your contribution was high enough. Yes it was uninsured. But if you kept your cash in someone else's wallet you wouldn't cry for regulation of dollar bills if they got their wallet stolen. This isn't really any different.
I do think it's dangerous to think of this as "investment" in some way that you're going to get a return. I like to compare it to gold, because if you have physical gold in your hand, it can be stolen. You can put it in a safe or a safe deposit box, but ultimately you're responsible for the physical security of your physical thing. My homeowner's insurance might cover the theft of my PM's, maybe we'll see the same kind of coverages for cryptocurrencies.
But I'm not gonna ask Men With Guns to go require bitcoin exchanges to have insurance.
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