[rlpb]

Cash needs more security than credit cards because transactions are irreversible. Say his mother has a significant part of her savings in cash, and they get stolen. What's she gonna do then?

Answer: let a bank deal with it. Banks can be insured.

[danielweber]

For physical cash, banks don't give a hoot, and their insurance doesn't either, because the sums stolen are so small.

Even the dollars a bank has uninvested, they are stored electronically, and it's very easy to undo electronic transactions. Plus, the limiting factor on stealing electronic money from banks is finding a stool pigeon who will do it with cash.[1]

With a system where transactions cannot be undone, you need life-or-death-level security on the entire holdings. No insurance company is going to underwrite a policy of "there is a completely unknown chance of 100% loss."

[1] A PDF of this was on HN recently but apparently I did not bookmark it. Help a brother out?

[danielweber]

Here is the paper: http://research.microsoft.com/apps/pubs/default.aspx?id=1618...

[throwawayG9]

Correct me if I'm wrong, but BTC banks can be attacked just like normal banks by the very central authorities we are trying to be safe from. Eg: "Oh noes, our economy is doing terrible, so much public debt. Let's just steal from the people.". Sure, they can't use inflation, but that's not the only way.