The deep security issues are that transactions are, by design, untraceable and irreversible.
That means that any security breach is catastrophic. Whereas the routine security breaches of credit and debit cards, and online banking systems, are not catastrophic.
Physical cash is of course not subject to instant theft from anywhere in the world - the theif has to be in the same place as the cash. Whereas it's basically not safe to use bitcoin on any computer connected to the internet - to do so is equivalent to leaving it in the street - rendering it hilariously unsuited to ecommerce.
Not to mention that the most convenient ways of actually getting money in and out of the bitcoin system, the exchanges, tend to have frequent security breaches and exit scams of their own.
(I should just point out that in this discussion generally the anti-bitcoin side uses 'bitcoin' to refer to 'the totality of systems needed to do normal useful things with bitcoin', while the pro-bitcoin side limits it to only the protocol and possibly the reference client implementation.)
This is simply incorrect. I fail to understand why so many people believe bitcoin transactions are untraceable, we are talking about a public ledger.
I understand the gap between how supporters and non-supporters discuss bitcoin. It's just that if you give all your USD to a scammer, we don't say there is a fundamental flaw with the USD.
The ledger records bitcoin addresses, which are not readily traceable to a person unless that person deals directly with one of the exchanges which implement KYC/AML.
It's factually incorrect to say that transactions are untraceable. Every single transaction is logged on a public ledger. The only difficulty lies in establishing that a particular address belongs to a particular entity. KYC/AML does help in a large way in this regard.
However, even with this difficulty, it's still easier than tracing cash payments to a particular entity. If I pay someone in cash, under the table, good luck proving the cash was ever mine. I would wager the government would prefer criminals conduct their business in bitcoin.
If you don't like cryptocurrencies, thats fine, don't use them. I'm just asking that you do not misrepresent them with half truths in some fruitless attempt to show they are flawed when compared to cash.
That means that any security breach is catastrophic. Whereas the routine security breaches of credit and debit cards, and online banking systems, are not catastrophic.
Physical cash is of course not subject to instant theft from anywhere in the world - the theif has to be in the same place as the cash. Whereas it's basically not safe to use bitcoin on any computer connected to the internet - to do so is equivalent to leaving it in the street - rendering it hilariously unsuited to ecommerce.
Not to mention that the most convenient ways of actually getting money in and out of the bitcoin system, the exchanges, tend to have frequent security breaches and exit scams of their own.
(I should just point out that in this discussion generally the anti-bitcoin side uses 'bitcoin' to refer to 'the totality of systems needed to do normal useful things with bitcoin', while the pro-bitcoin side limits it to only the protocol and possibly the reference client implementation.)