A new study reports that over the last four years, approximately US$11 million in Bitcoin has been stolen from its rightful owners in one way or another. While this may leave you feeling a bit sorry for Bitcoin users, closer examination reveals that they actually came out far, far ahead of dollar users, who suffered a whopping US$4 trillion theft during the same four years.
That's trillion with a “t.”
The Cost of Theft – Bitcoin vs. Dollars
How is it that theft in Bitcoin is a like rain drop compared to the vast ocean of dollar thieving?
Turns out that it's far, far more expensive to attempt to steal Bitcoin than it is to steal dollars. The US$4 trillion dollar theft experienced between 2011 and 2014 came primarily from the Federal Reserve's practice of “quantitative easing.” Though the term is meant to sound fancy and confusing, it actually just means money creation.
Several reasons are given by Fed apologists for this money creation – to artificially prop up the prices of homes or the balances of state coffers, for example – and it all boils down to the same thing: massive devaluation of the dollars already residing in Joe Average's bank account.
And for the Federal Reserve itself, the cost of money creation (theft) is almost nothing. In fact, it's getting cheaper than ever before. Whereas prior to the digital age, the Fed actually had to pay for paper and ink to make new money, computer banking has lead to the nearly costless process of simply typing extra zeros into a digital account.
Can You Afford to Steal Cryptocurrency?
Bitcoin, on the other hand, is much more costly to steal. First of all, simply creating new bitcoins out of thin air is impossible – the Bitcoin protocol creates only 25 new coins every ten minutes, and the only way to get your hands on them is to “mine” them with sophisticated computers.
Everyone knows exactly which miner gets the coins, too. There are no secrets about where the new money goes, how much of it is created, or how much will ever be made (only 21 million coins).
Without magical money creation as a valid option for theft, would-be crypto thieves are left only with expensive schemes. They've got to manually implant malware on your computer to record your wallet password, or phish for it. They've got to search for flaws in online wallet key generators. Some even resort to the most costly theft of all – they start actual companies that store peoples' bitcoins, and they make off with them, thereby damaging their reputation for life and risking imprisonment if caught.
Paper Wallets Make Great Sympathy Cards
Feeling bad for dollar users yet? You'd be heartless if you didn't.
Rather than sending your condolences, why not send a few bits? You remember what it was like when you first started out with Bitcoin – it helps to have someone show you how to set up a wallet and send some funds.
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That’s trillion with a “t.” The Cost of Theft – […]