

Ask HN: Why do people trust Bitcoin to third parties? - bevacqua

Every other day, really every day or twice a day, lately, we hear of bitcoin exchanges, banks, or services getting ripped off for thousands of bitcoins, and just giving up on their users, shutting down, and not reimbursing the &quot;stolen&quot; money.<p>You can&#x27;t really tell if it was actually stolen by someone else, or the very service you trusted in.<p>Why do you trust these people?
What invaluable service do they provide that you can&#x27;t live without them? Even if it means your bitcoins may end up not being yours anymore.<p>I ask out of ignorance and skepticism, I&#x27;m familiar with bitcoin, but don&#x27;t own any.
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px1999
I'd wager that many of the people who had their money stolen (particularly at
gox) aren't what you'd describe as "bitcoin enthusiasts". Less-technical
people who have either heard about bitcoin, or who have been gifted some
bitcoin are likely going to keep it in whatever service they received it on
(many may not even have realised the difference between mtgoxbtc and btc).

There's enough FUD out there to scare people who do a little bit of research
away from storing the coins in their own wallet - brainwallet passwords being
cracked and accounts emptied, viruses taking your wallet.dat, over-paranoid
key-generation techniques recommended by the community.

Living in the HN//./reddit/whatever else bubble, there's a prevailing attitude
that users should be aware of the goings-on in the bitcoin world. We're
definitely exposed to those details here. As a result, the reaction seems to
be to almost blame the users for the exchange losing their money (to
paraphrase, "why would anyone in their right mind trust Mt Gox?"). Personally,
I think that this attitude is bullshit, and that technically competent
bitcoiners are taking advantage of less-technical people with the rhetoric
around how much of a great payment system bitcoin is/how it's a great
investment/etc while glossing over the fact that if you aren't good with
computers (and want to trust domain experts, or who don't know how to properly
secure their own computer), you _will_ be robbed of your money one way or
another.

That said, perhaps the best answer to your original set of questions is
convenience...

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stevekemp
Some people do, because they don't know better.

Others are trapped by circumstances. For example many users uploaded/stored
coins at MtGox, and similar, because they wanted to trade them. But then the
sites pulled the rug from under them, by disabling trading - leading to people
having coins trapped that they couldn't reclaim.

