Evidence shows that the track record of hosted bitcoin accounts is a bit disappointing.
But the evidence seems to show that the track record of bitcoin accounts kept by individuals is significantly worse. For instance, http://arstechnica.com/tech-policy/2012/10/78-percent-of-bit... and I think I am safe in concluding that a significant portion of those "non-circulating" bitcoins are actually lost.
So my financial advice would be that you are better off trusting an exchange than trusting your own storage and backup procedures.
7 million bitcoins are "lost" because they haven't circulated in the last 3 months?
Maybe you have found evidence of an elaborate ponzi scheme that we are all played by, but I don't buy your conclusion, and it's not the conclusion of the linked article.
If only 90,000 bitcoins held by/moved through a small group is driving most of a total of 423,000,000 bitcoins transacted, then I'd say the rest of the owners of the 9mil bitcoins in existence owe those guys a debt for stress-testing the grid.
You can use a cloud bitcoin wallet, like BitcoinSpinner, which is implemented on top of the BCCAPI. While I have not read the actual API, and I'm not sure this program is open source, I can tell you that it promises your bitcoins cannot be stolen from the cloud!
If that's not good enough for you, and you don't trust your own safe box in your own house, then I'd suggest you run back to your FDIC insured bank, or better, start reading. It's shameful to hear Hacker News readers saying they don't trust their own data to stay safe.
> It's shameful to hear Hacker News readers saying they don't trust their own data to stay safe.
Look, I am a reasonably skilled programmer, and I work for a bank. I know a great deal about keeping data safe and keeping it backed up well. I have written simple cryptography algorithms for addressing these sorts of issues (like secret sharing). And I know enough to realize that these are HARD problems, and leaving them to professionals works better than thinking you are smarter than the rest of the world.
As an example, it sounds like you store your bitcoins in a safe in your house. Nice system... I'm going to assume that your safe is fireproof, and that you were careful about not storing the data elsewhere. Now here's a question: if you die, will your heirs know how to retrieve the value, or will it be lost forever? Those are the sorts of hard problems that an institution can probably handle better than you can.
But the evidence seems to show that the track record of bitcoin accounts kept by individuals is significantly worse. For instance, http://arstechnica.com/tech-policy/2012/10/78-percent-of-bit... and I think I am safe in concluding that a significant portion of those "non-circulating" bitcoins are actually lost.
So my financial advice would be that you are better off trusting an exchange than trusting your own storage and backup procedures.