Given the appalling lack of basic security across many of the Bitcoin services there is no way on earth I would be trusting them with bank account details.
The only banking details it needs are you routing and account number. Granted, you shouldn't give those out to just anyone, but it's the same info you give out every time you write a check.
If you wanted to be really paranoid, you could set up a checking account just for stuff like bitcoin, and only load small amount of money into it right before making purchases.
The only banking details it needs are you routing and account number. Granted, you shouldn't give those out to just anyone, but it's the same info you give out every time you write a check.
But those are all anyone needs in order to withdraw the entire contents of your account, and they're being stored on someone's presumably-poorly-secured server. At least with paper checks they're, well, paper and are likely physically given to the bank for processing.
If you wanted to be really paranoid, you could set up a checking account just for stuff like bitcoin, and only load small amount of money into it right before making purchases.
My credit card account comes with an online service to generate one-time-use card numbers, for buying things from companies you don't exactly trust. So this suggestion is perhaps not so overly paranoid.
Someone could fraudulently initiate a draft, but ACH drafts can be chargedback, giving you some protection. Obviously this is trickier and more painful than a credit card chargeback because it's your money that's been taken, and not your CC company's.
Since the writing of a Knuth article, checks have become less risky, but they're still more risky than credit cards. [1]
So like I said, don't give your banking info out to just anyone. There's still risk involved. Whether or not you find Coinbase overly risky is up to your own utility curve.
You write a cheque to X.
X hands it to their bank A.
A asks your bank B for the amount on the cheque.
B asks A for the cheque to check its valid.
B sends money to A.
Done. Which is why I thought they take days to be processed.
Used to work that way. Not anymore. Routing number and account and amount are sent electronically to a check clearinghouse and the money is transferred sometimes the same day or even close to real-time. The paper itself gets scanned, and the original shredded.
From what I've seen of their security, it's better than most of the bitcoin services, and in this case, due to YC and some other known investors, I think the risk of insider fraud is far less than with most other bitcoin services (run by pseudonyms).
I really think this is one of the bigger hurdles of bitcoins. Whether it really is secure or not, the infrastructure around bitcoins just doesn't really seem like it is.
