[itcmcgrath]

Excellent points.

I worked in a bank designing systems at one point. Even with methods to retrieve money lost through fraudulent transactions, they still had monthly 'Fraud' budgets much larger than my salary for money they couldn't retrieve. Imagine BTC services 'Fraud Budget' when all transactions are non-reversible.

Banks do have a massive advantage in 'Practical' security as well in the form of a 'big stick' aided by the government. Since the practical risks of fraud against a bank are much higher than fraud against an online BTC service (who is the FBI more likely to help), the exposure would be much bigger.