I think it makes no sense to compare currencies with banks but with any other currency like the dollar. In my opinion, save money ( bitcoin , dollar , gold, etc. ) in the bank will always be safer to keep at home.

Monetary collapse in coming months will you awake into new reality with banks.....by the way if you still will prefer third party mother tits then you have xapo, cei and other exchanges as secure as ordinary bank around the globe...haha.

You made some valid points but the fact that the banks are run by people, there can be human error and that makes banks no more secure than yourself.

banks are not secure at all... they just backed by government agencies and the government itself...  however if the big bank collapses it will destroy the whole economy and bring the country once more into a crisis....  a bank like chase manages more than a trillion dollars in assets imagine all that being lost... heck we had the crisis in 2007-2008 for a 750 billion and a housing bubble....  also owner of the banks have purchased massive power in government that do shady works...  at least btc is not controlled by anyone... and they cant hack you unless they hack an exchange site.. like they did with bitfinex which i think it was an insider job...

tl;dr

Fiat Banks are secure because if a bank loses money they just steal it from someone else in the form of printing more. 

Btcpop is a Bitcoin "P2P Bank" meaning you control your funds the whole time. We keep all but the Hot Wallet in cold storage and much more secure than any normal Bitcoin user can, and much more secure than a fiat bank (except that we can't print more Bitcoin if they are lost). 

You want Bank Security for your Bitcoin? Deposit your coins with us. We handle the security you get a secure account where you can reset your password.  There are also many safe and secure ways to earn interest such as our 0 risk Instants "Savings Account" and P2P loans with collateral!

nice post.

Banks cannot pay you for blogging, content curation, or commenting online etc... 😎 however Steemit does. Bitcoin is a form of money tranfer and exchange to me. As long as my Steem Power is protected by the Blockchain I won't be stressing any Bitcoin transfers nor making any until I wish to cash out. 

Cashing out them Steem Dollars is something we all will be doing eventually for those who earn enough out here. Hopefully not using a leaky faucet to do so, but a bit more secure one. Banks can be depended on to a point, but most are now using Blockchain technology as well. At least that's what I learned so far from research. Oh and nice article hopefully Steem Dollars can someday become a currency that doesn't rely on Bitcoin exchange.

Finally someone speaking some sense and not drinking the bitcoin Kool-Aid. I'm a bitcoin dealer. The vast majority of my personal income comes from buying bitcoins cheaply and selling them at mark-up. I make my living off the success and adoption of this volatile digital asset that can be easily hacked and never recovered (Mt. Gox, Bitfinex, etc). And even I have to admit to myself that bitcoin is never going to hit the big time without password recovery and fraud protection mechanisms. 

The reason why my customers come to me to buy bitcoins is usually because they want to do something illegal or something they don't want the bank or the government to know about (online gambling is legal here but are you naive enough to believe that people report their bitcoin gambling winnings on their tax return? Unless it's such a large amount that it's impossible to hide from the government's scrutiny.)

Unless you're a successful professional bitcoin trader like myself, bitcoin is just not practical for everyday transactions. I'm looking into getting a bitcoin debit card or a bitcoin visa debit card for myself here in Canada because I get people selling bitcoins to me below-spot every day practically. 

But for the average consumer out there, it makes no sense to buy bitcoins from a dealer such as myself (where you have to pay me a commission and then I pay 1% of my sales revenue to the website I advertise on) or even at a bitcoin exchange (where you have to pay fees) in order to buy goods and services that you can buy cheaper with fiat. But if you are doing something illegal or something you don't want the government/banks to know about, then that's a different story.

Agreed.  I think Bitcoin is a better medium of exchange but its great to have a crypto the size as Bitcoin.  I believe you can do it better built on Ethereum smart contracts.  Fiat, Stable Coin, DGX ECT.

@bitcoindoom As horrible as the banks are, you do make a lot of valid points. IMO Bitcoin is a major evolution in fiat (by decree) currency. And yes, it definitely has a long way to go concerning the points you mentioned, and  ease of use by the general (zombie) public.

The major problem with government fiat currencies is that they are guaranteed to "safely" lose value over time through inflation. Whereas Bitcoin has a lot of risks and it's given people many rewards.

Enjoyed your article :)

Just to be clear. You are not arguing the doom of bitcoin, but the problems with the storage of it - banks vs. wallets. Your arguments are valid, but it is easy to compare a system which matured over hundreds of years with one which is not ten years old. Whatever is happening now with hacking and losing crypto coins are part of the process to mature. For you to assume that crypto must take on the same mature form which worked for fiat banks is wrong. Whatever a mature crypto banking system will be, time will teach us. But I am very sure that when it is mature, it will be superior to the fiat banking system.

Well I DO NOT AGREE, but explaining would take too bloody long, and many are already doing that.  All I will say is, part of the fun of losing something IS FINDING IT AGAIN! 
__Man buys $27 of bitcoin, forgets about them, finds they're now worth $886k__
https://www.theguardian.com/technology/2015/dec/09/bitcoin-forgotten-currency-norway-oslo-home

@bitcoindoom

You are using a false analogy but I upvoted because you make some very valid points.

 It depends on the situation. For example in Cyprus they got a haircut, literally their money being stolen. Also, there are online services today, that serve as banks. You are talking more about the old days of crypto

http://cdn0.dailydot.com/cache/77/33/77335cf650cdefc8574dce0271628f67.jpg

Why this article is wrong.

1. Bank money cannot be printed, or even etched into a metal plate, and stored in a small fireproof container, where nobody knows about it. There is just no comparison between a bank and this particular method of securing the private key of a bitcoin wallet. *period*
2. Right now, there is a lot of risk with keeping the wallet on your computer, more than a few incidents of people losing them from wallets stored on their pc, I think even the unlock password was grabbed by a keylogger. **Should it have to be stated, that you should not trust Windows with your bitcoins? Really?**
3. While those silly people at Bitfinex may have lost some 1200BTC that were attached to Bitgo accounts, the jury is far from out and the investigation such a collossal theft should have prompted, and the indefinite closure of the exchange, has not happened. 
4. Most exchanges, use cold storage, the keys holding the unlock to spend the bitcoins they are holding in trust for you, as account holder, cannot be breached except physically, and there is serious security around the places where this storage is being done.
5. Simply, if you are running a secure operating system, with encrypted storage where you keep your keys, and substantial user passwords for blocking remote access to your account if they happen to breach some open service you didn't know was vulnerable, they still can't get at your wallet file. And then, if you have any sense, you have it encrypted with a password as well.

The biggest insecurity in bitcoin is the price volatility, and this is a natural function of its small market capitalisation and contentious development millieu. Double spend attacks, hardware wallets, printed and etched, wallet keys, I mean, seriously, if you make the effort, and don't need to spend the coins on a regular basis, you don't get much safer. 

When I was first getting involved with bitcoin, in 2013, I mean, right then and there, the Cyprus government froze everyone's bank accounts. Do you think that this is really secure?

None of the fatal issues with the global financial system after 2007 were really addressed. Almost nobody thinks that within 12 months there is not going to be a serious issue with money in the bank.

But I will say one thing. Longer term, I think that money will turn out to be better secured by systems like the one Steem uses, or what Ethereum can potentially enable. 

Nothing is more secure than cryptography, nothing in this whole world. That's the main reason why there is so much of a buzz around blockchain technology.

I think this is a poor analogy. Holding money in a bank would be like holding bitcoin on an exchange. You don't have a private key and it basically acts like any normal bank would. You can get your password recovered or reset just like any normal bank and they are now starting to become FDIC insured as well. 

Holding bitcoin in your own private wallet or in cold storage would be like hiding cash at your home or burying gold in your backyard. 

Saying that banks are more secure than bitcoin is not the correct way of looking at things. IMO it's the same as saying banks are more secure than USD... it doesn't make sense. Banks are just a tool for traditional currency and they will also be used for bitcoin.

There are pros and cons to everything. Bitcoin isn't perfect but banks are corrupt.

when bitcoin implements sidechain they would more then likely build a sidechin with all these banking features (if that what you want to call it ) reversibility, stopping payments ect but with out the inflation.

time to reinvent genetic passwords
http://i.imgsafe.org/0af2d0f8c8.jpg
wellcome my art
https://steemit.com/art/@romanskv/watercolor-sketches

I think Bitcoins transparency with regards to transaction that's occur on the blockchain is one of the key reasons banks wont incorporate bitcoin in to their systems. Banks and clients both rely on privacy of data over transactions made to keep certain types of information secret. That information is only shared with the people concerned. For example Apple wouldn't want a transaction sent to a parts supplier to be disclosed as it might cause a leak in sensitive data revealing their future plans. This in my opinion is the one reason banks would never employ a public chain for transacting. They are however using blockchain technology to create private chains that would give it the features of the blockchain that are so revolutionary whilst tweaking it to solve some of the problems you mentioned in the article. 
The one thing i can say about the security aspect of Bitcoin is that whilst it maybe be insecure for individuals, atleast if there was a hack only the hacked accounts would be compromised as compared to an entire system being hacked and a lot of data being stolen. Its harder to hack 10,000 computers individually than it is to hack 1 central system. Thus a Mr. Robot type financial meltdown would be less likely to a financial system when dealing with Bitcoin.

It is odd that you rate users responsibility for how secure a system is. User responsibility is NOT how secure a system is.

Why a bank is not safe, that would be a hell of an article! Not this bullshit, sry

> The probability ... 

Blather.  

 > Rather than debate ... 

Blather.  

 > Bitcoin only has value when you use it.

If that is true of Bitcoin, is it any different for fiat?  If so, then how?  If not, then what's your point?  

 > ... you must share your secret with a computer.

I gather you're either not aware of or have chosen to ignore offline signing - which allows for cold wallet security while retaining the ability to spend.  

 > Your account cannot be frozen, funds cannot be seized, there are no limits and restrictions, and it “protects your privacy”. Each of these claims is false in practice.

Care to elaborate?  

 >  If they were responsible for their Bitcoin and any one of these very common things happened to them, ... 

If any of those things happened then the user <b>wasn't</b> being responsible for their Bitcoin.  

The author then goes on to blatantly confuse banks and exchanges...  

Even if I overlook that the user holding two keys of a two-of-three multi-signature account obviates the need for a multi-signature service provider, the points raised about information security are no different to those previously raised.  

 >  In effect, a Bitcoin transaction output’s claim logic is unable to depend upon the outputs of the transaction it is claimed into.

You lost me there.  Would you care to try expressing that another way?  

The same approach for securing a single 256bit private key also secures many keys - which an individual's Bitcoin can be divided into.  

 > For the vast majority of Bitcoin and Bank users an insecure website with a password remembered by the browser is the appropriate level of ease of use.

You can argue for security or ease of use but not both.  Care to pick one?