| There are two aspects to it: As epaga points out, if you lose access to your wallet (forget password, hardware failure without backups, somebody dies without leaving the password to their heirs) there is no way to retrieve that money. Secondly, if a transaction is made to a valid-according-to-the-protocol address that nobody owns, that money is lost with no possibility of getting it back. You could argue that these are problems that can be solved with more technology on top of Bitcoin, so you could have Bitcoin banks that: 1) Guarantee that your wallet is stored securely. The idea is that you need to trust that the bank is better at not doing stupid things than you. 2) Control access to it. Like modern banks, you would need to trust these banks, for they would have access to your wallets. 3) Make sure that payments are going to the right place. To make a payment, the bank that controls the wallet that the payment is being made to could be required to notify via another protocol that the address is real and belongs to a certain person/organisation. If this was widely used (so that payments to raw addresses was considered dangerous), it would also prevent a hacker from breaking into, say, EFF's Twitter account and tweeting "we're now accepting donations on this address...". |