[mrkickling]

In what way is that different from fiat money? You can keep fiat money in your mattress and spend it anywhere that accepts them. If you have $100 in a mattress (offline) then you would still have it tomorrow. The problem is that the moneys value may change tomorrow, especially if we are talking about bitcoin.

[kordless]

You can't secure cash under your mattress with a password, for one thing. That makes cash (and paper wallets) venerable to physical attack, even by vermin: http://metro.co.uk/2007/03/27/mouse-eats-cash-machine-makes-...

There is no problem with value changing tomorrow as this is a potential problem with any new payment methodologies. Adoption does not appear magically overnight. The US Dollar is velocity stable due to its wide spread use and being propped up by the equivalent of a bunch of duct tape and bailing wire.

[flatline]

I've seen more people get jacked of all their cryptocurrency holdings than any significant amount of fiat on their person, due to targeted viruses and backdoored systems. I've also seen numerous occasions where someone sent money to the wrong address and that was it, the money was forever sent into the void.

There was a guy on reddit who had all of his DOGE and BTC lifted right off his computer. He was using strong, auto-generated passwords stored in a password manager, so he was not even typing in passwords that a keylogger could intercept. Presumably the attacker had a backdoor into his system, watched him work, and just transferred out the funds when he wasn't at his desk. Poof - all gone, with more or less proper security measures in place and no clear sign of an intruder other than the missing money. Several other people reported similar events in that thread.

These are still major problems for mass adoption of crypto, completely setting aside the massive cases of fraudulent pools, online wallets, exchanges, etc., etc. There are many subtle problems that are difficult to diagnose and cure that come with a technological solution like bitcoin, that paper money simply does not have.

[waterlesscloud]

A true story- My grand-uncle, who had lived through the Great Depression, never trusted banks. So he buried a considerable amount of cash in the forest behind his house in mason jars (seriously!).

When he died, my grand-aunt, who always thought he was being silly, went out in the woods and retrieved all the jars.

The cash had rotted and deteriorated to the point that it was unspendable.

However, she was able to work with the US Treasury to sort through the remains and identify the bills and replace them with new currency.

There's not really a bitcoin lesson here, just some family lore that seemed relevant. :-)

[dnautics]

this is why we buy gold and silver.

[StavrosK]

Isn't the commission too expensive?

[nationcrafting]

No. You can usually buy physical at spot + 1 or 2% max. In the UK, coins like Sovereigns or Britannias are capital gains tax free, so you typically pay a bit more for them, like 4 or 5% above spot. But then you won't have the headache of remembering what you bought them for when you sell them (aside from the pleasure of saving CGT-free).

[Canada]

Worth it for long term storage like that.

These days spending old banknotes is problematic, even if they're in perfect condition.

Some people love gold, some people hate it, but everyone agrees it's the only thing that really has zero counterparty risk.

[dnautics]

I wouldn't say zero! Also, moving forward things like planetary resources could challenge the stability of gold, but it's still pretty good and fairly liquid. For me, it proved more liquid than bitcoin; Exchanging bitcoin took 3 days coinbase + ACH; I liquidated a gold piece in an afternoon, could have gotten cash, but mailed a check into my bank and had the funds in 2 days (still faster than bitcoin, even with the USPS in the way)

[dnautics]

let's say the trade commission was a horrifying 50%, and in the best case scenario for the other direction the treasury exchanged those bills exactly one for one. Would you rather have $1000 or gold from 50 years ago valued at $500 from 50 years ago? Even if you think gold is in a bubble, and, say worth $200/oz instead of $1600/oz, you would have far more than 5 oz worth from 500 1963 dollars.

[watty]

If someone is going to physically break into your house and access your money what's to stop them from physically assaulting you until you give them the password? Or just taking the computer that stores the "offline" wallet?

[branchan]

Unless someone has some kind of insider information, no burglar is going to assume that you have a stash of bitcoins.

[eclipxe]

Until now!

[anigbrowl]

There are these things called safes...

[branchan]

Are you going to put the safe under your mattress? Or do you think a secure encrypted and password protected wallet stored on a tiny USB drive or SD card might be more secure?

[Sheepshow]

You're right, all solid savings plans must fit comfortably beneath a mattress. Reminds me of the old saying "If I can't lie down and sleep on top of it comfortably, it's not an investment"

[anigbrowl]

Embed it in the floor, since you ask.

Not that I think this is the ne plus ultra of security, but since having a digital wallet doesn't obviate the existence of valuable physical documents (eg passports, title deeds) you might still want to use a safe to protect against fire, burglary, and so on.

One distinct benefit of a physical store is that removal or tampering are more obvious.

[lmm]

If you burn your cash there's zero risk of it being stolen. But what matters is that you have access to it in the future, and I'm a lot more confident of that with a safe than with a complicated piece of electronics that can only be used by connecting it to an even more complicated piece of electronics.

[nmcfarl]

I've had a significant number of USB drives, (and SD drives) get corrupted and simply stop working. This seems to happen with heavy use, but it also happens just sitting in a drawer untouched - for quite a bit of time. I'm not trust these suckers as the sole repository of things as valuable as my pictures, much less cash.

[kordless]

USB drives have the advantage of small. There's literally a hundred places I could hide one in my house. Hell, I could hide 20 fake ones haphazardly and one legit one really well.

The chances of everyone doing this and being comfortable with it is pretty low though. We need brain storage medium.

[SilasX]

I'm not sure that's an apples-to-apples comparison.

In both cases, there is one physical good which, when stolen, deprives you off the money. With cash, it's the physical notes. With Bitcoin, it's the private keys in the wallet (or private key to unlock the wallet's private keys). Making backups of the keys can protect against accidental data loss, but not against theft, as it increases attack surface (i.e. number of locations where the same money can be stolen from).

There is still an advantage here favoring Bitcoin, though: if the key is stolen and you know this, you still have a chance to preserve the wallet's holdings: just generate new keys (addresses) and broadcast a transaction of all the wallet's money to those addresses. If you can get the message to the network's nodes faster than the attacker, the money will be "signed away" before they can use it, and such attempts will be rejected as double-spends.

There is no corresponding feature for physical cash.

[hayksaakian]

You need to physically be somewhere to spend cash, with BTC, you don't need a presence.

While you could construct a procedure to spend cash remotely without one powerful intermediate, this property is just built into to *coins, and it is simply how they work.

[smrtinsert]

A huge difference is fractional banking, which deserves a good read. http://en.wikipedia.org/wiki/Fractional_reserve_banking

[this_user]

I'd argue that fractional reserve banking is still better than having a "currency" that is backed by absolutely nothing and may lose up to 90% of its value on a moment's notice.