# Last edited on 2014-01-30 23:38:26 by stolfilocal

[quote author=Holliday link=topic=178336.msg4845718#msg4845718 date=1391114245]

So... when you go out to purchase some items at the grocery store, you
put your life savings in cash in your back pocket wallet?

[/quote]

Are you saying that I sould not care that a few hundred dollars's worth
of BTC may be stolen from my smartphone now and then, as long as my
savings are safe?

A virus may be programmed to act only when there are at least 50 BTC in
the wallet. So, even if my grocery payments went through, I cannot trust
that my smartphone is clean and use it when shopping for a new car or
paying my hotel bill in Paris.

Of course I do not carry my savings with me. But I do not keep them in
an extra-large-size wallet buried in my backyard. Like 99% of the people
with savings, I keep them in the bank; all things considered it seems
the best alternative, including protection against the wrench method.
(And that in spite of the fact that in 1990 the Brazilian government
froze all bank accounts over 5000 US$ for 18 months.)

I can recall at least a dozen cases of armed home robberies that
happened to colleagues and relatives. Usually by 2-3 people, sometimes
with machine guns. Sometimes the robbers would threaten the family
demanding "where do you keep the cash", but fortunately they all knew that no
one keeps large amounts of cash at home, and they never got beyond
verbal. Thus one way to escape the wrench method is for everybody to
keep their savings in banks instead of at home.

At some point in the 1990s there was an epidemic of "flash kidnappings".
Armed robbers would take someone to an ATM and force him to empty his
bank account. Of course the kidnappers would not get anywhere close to
the ATM, but watched from a distance, or kidnapped a couple and kept one
member hostage. To prevent that type of crime, banks have limited
severely the size of ATM withdrawals, especially at night; e.g. max 100
US$ after 10 pm. That modality of "wrench technique" could work even
better with bitcoins too, since there would be no need to go out to the
ATM. The "withdrawal limit" solution does not seem to be viable; what
could be done instead?

In another crime epidemic of the early 1990s, the criminal would dial a
random number and tell the person "we have got your
wife/husband/son/whatever hostage, deposit $XXXXX into account XXXXX
within three hours or we will kill him/her." In most cases the victim
would realize that it was a hoax (he may not even have a wife or son),
but once in a while the bandit would get lucky and the victim would deposit the money.
Elderly parents who did not live with their sons were particularly vulnerable.
(It seems that the criminals were often inmates, using smuggled
cellphones.) Eventually they improved the method, calling a specific
victim after obtaining the name and daily schedule of the "hostage".
Those crimes stopped when the population became aware of them, and most everybody
got a cellphone.  Hopefully that will not work with bitcoins either.

You may have heard of the "Chupa-Cabra" ("Goat-Sucker"), a
not-at-all-ancient Brazilian legend about an elusive monster (a cross of
ET and Nosferatu) that would kill farm animals at night and suck all
their blood. "Chupa-cabra" is also the slang for a fake ATM front panel
that bandits would install over a bank ATM to steal people's bank data.
The fake cover, which looked totally legitimate, included a card reader
and a fake keyboard or other means to capture the keystrokes. After
recording client's account and PIN, the hacked ATM would flash "failure,
machine unavailable". This method is not relevant to bitcoins, of course
(unless one counts hacking the client's computer as equivalent); I
mention it only to show how ingenious and improbable the crooks can be.

[quote author=Holliday link=topic=178336.msg4845718#msg4845718 date=1391114245]
Have you looked at smartphone wallets like Mycelium and the security which they can offer?
[/quote]

I am pretty confident that the chief programer at Mycelium is not that SheepMarketplace guy.  ;)


[quote author=Holliday link=topic=178336.msg4845718#msg4845718 date=1391114245]
So... when you go out to purchase some items at the grocery store, you put your life savings in cash in your back pocket wallet?
[/quote]

Are you saying that I should not mind that a few hundred dollars's worth of BTC may be stolen from my smartphone now and then, as long as my savings are safe?

And that I should not use my smartphone (or any computer that is connected to the internet) to pay for a new car or for a  hotel bill in Paris?  How should I do it then? 

Hacking computers to steal credit cards is still a common crime.  We can be sure that criminal hackers will switch to stealing bitcoins once they become common.  The police is there to protect me against people who try to steal my wallet; who will protect me from 


And, if the government wants to, they can force companies like Apple to help them steal your keys so that they can seize your bitcoins before you know it.

Of course I do not carry my savings with me. But I do not keep them in an extra-large-size leather wallet buried in my backyard, either. Like 99% of the people with savings, I keep them in the bank: all things considered, it still seems to be the best alternative, especially as protection against the wrench method. (And that in spite of the fact that in 1990 the Brazilian government froze all bank accounts over 5000 US$ for 18 months.)

So, shall we assume that, after bitcoinst take over, most people will keep the bulk of their bitcoins at bitcoin banks?

[quote author=Holliday link=topic=178336.msg4845718#msg4845718 date=1391114245]
Have you looked at smartphone wallets like Mycelium and the security which they can offer?
[/quote]

Of course I am pretty confident that the chief programer at Mycelium is not that SheepMarketplace guy.  ;)