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drusselloctal@gmail.com 2014-11-01 16:02:27 -07:00
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[[ch10]]
== Bitcoin Security
Securing bitcoin is challenging because bitcoin is not an abstract reference to value, like a balance in a bank account. Bitcoin is very much like digital cash or gold. You've probably heard the expression "Possession is nine tenths of the law". Well, in bitcoin, possession is ten tenths of the law. Possession of the keys to unlock the bitcoin, is equivalent to possession of cash or a chunk of precious metal. You can lose it, misplace it, have it stolen, or accidentally give the wrong amount to someone. In every one of those cases, end users would have no recourse, just as if they dropped cash on a public sidewalk.
Securing bitcoin is challenging because bitcoin is not an abstract reference to value, like a balance in a bank account. Bitcoin is very much like digital cash or gold. You've probably heard the expression "Possession is nine tenths of the law." Well, in bitcoin, possession is ten tenths of the law. Possession of the keys to unlock the bitcoin, is equivalent to possession of cash or a chunk of precious metal. You can lose it, misplace it, have it stolen, or accidentally give the wrong amount to someone. In every one of those cases, end users would have no recourse, just as if they dropped cash on a public sidewalk.
However, bitcoin has capabilities that cash, gold, and bank accounts do not. A bitcoin wallet, containing your keys, can be backed up like any file. It can be stored in multiple copies, even printed on paper for hardcopy backup. You can't "backup" cash, gold, or bank accounts. Bitcoin is different enough from anything that has come before that we need to think about bitcoin security in a novel way too.
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==== Survivability
One important security consideration that is often overlooked is availability, especially in the context of incapacity or death of the key holder. Bitcoin users are told to use complex passwords and keep their keys secure and private, not sharing them with anyone. Unfortunately, that practice makes it almost impossible for the user's family to recover any funds if the user is not available to unlock them. In most cases in fact, the families of bitcoin users may be completely unaware of the existence of bitcoin funds.
One important security consideration that is often overlooked is availability, especially in the context of incapacity or death of the key holder. Bitcoin users are told to use complex passwords and keep their keys secure and private, not sharing them with anyone. Unfortunately, that practice makes it almost impossible for the user's family to recover any funds if the user is not available to unlock them. In most cases, in fact, the families of bitcoin users may be completely unaware of the existence of bitcoin funds.
If you have a lot of bitcoin, you should consider sharing access details with a trusted relative or lawyer. A more complex survivability scheme can be set up with multi-signature access and estate planning through a lawyer specialized as a "digital asset executor."