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The Bitcoin applications and their security can (and will eventually) exhibit the same amount of security (or lack thereof) as those tied in with the banking system. That part is obvious, because the Bitcoin protocol doesn't address the security of this layer in any way.
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I'm wondering if that's the only way of seeing the problem. I agree with the above, but...
...the security of conventional banking applications
is not the only security layer for the end users of those applications.Case in point:
If my bank's ATM or webportal gets hax0rd, I don't lose a cent. If that happens with my Bitcoin wallet/app, I do.
True. But this falls (imo) under my 2nd point then: security through central authority.
In other words: if the ATM is hacked, you don't lose funds because you are not the de facto only owner of your funds (in the way that you are with extremely high likelihood the only owner of your funds if you are holding the private keys to you bitcoins).
The same mechanism that prevents you from losing funds if the ATM is hacked (or a bank is robbed) however also enables an even higher authority to take (parts of) your funds during a banking crisis bail-in or through inflation.
Which is why I said in my post: we will eventually come back to first principles. Do we believe that a central authority protects us from harm more often than it causes harm to us. I am okay with agreeing to disagree on this point.