Protecting physical gold is just as hard a problem. Placing the gold inside a steel and concrete Box where only one person can open it still isn't secure. The problem is that without laws to punish people who steal, they will eventually break all of your security layers.
Perhaps we can design a new currency that goes back to basics. Money is just a contract between two humans, goods or services now are traded for claims on future human labor. Instead of using numbers or possession of objects, use something that can't be stolen. A system that streamlines the ancient bartering system. Trade you 100 gallons of milk for a new transmission. But instead of holding money, you perform the transaction real time. Instead of being paid in money, you get paid in receipts for goods/services performed which can be traded.
TLDR: When a merchant buys, say, a dress, from a producer, the merchant pays the producer with a note that gives the note's recipient the right to x% of the eventual sale price of the dress.
The producer can then use notes like that as a form of collateral for their own notes, which they can use like cash to pay upstream suppliers with it (fabric, thread, dye, sewing machines, etc).
Items tend to sell, or clear, within 91 days, so that is the term of the note. Eg, the note is 'self-clearing' within 91 days.
Eventually the dress will sell, and the cash/gold proceeds will remit up the chain, from merchant -> producer -> upstream suppliers, until all the notes and their derivatives are redeemed.
It's basically an alternative to bank credit that's backed by sales of real goods.
>> Placing the gold inside a steel and concrete Box where only one person can open it still isn't secure.
Nothing is really secure. But typically a gold vault is accompanied by a person with a gun who will shoot you if you try to take gold. There is no danger of physical harm in trying to steal Bitcoins. This is a fundamental difference.
Perhaps we can design a new currency that goes back to basics. Money is just a contract between two humans, goods or services now are traded for claims on future human labor. Instead of using numbers or possession of objects, use something that can't be stolen. A system that streamlines the ancient bartering system. Trade you 100 gallons of milk for a new transmission. But instead of holding money, you perform the transaction real time. Instead of being paid in money, you get paid in receipts for goods/services performed which can be traded.