Security Theater: Outsourcing Customer Identity Verification

Security is tricky. Sometimes the most obvious security solution is ineffective and, worse, a distraction from the real risks and issues. In the security industry this is called “security theater.” It looks good and makes some people feel secure, but doesn’t actually reduce risks. Sometimes security theater even exposes people to even greater risk. Such is the case with third-party identity verification for the recovery of bitcoin accounts. It seems like the obvious solution and feels secure, but, in fact, it exposes users to far greater risks without actually doing much to increase security.