PandoDaily reporter Michael Carney has an interesting piece up on how Bitcoin offers both more and less security than credit cards.

He starts by illustrating how “any system that must rely on a central clearinghouse to authorize and process transactions, such as credit cards and bank transfers,” are vulnerable to hacks and data theft.

“Merchants and transaction counterparties are ill-equipped to verify the authenticity of a credit card or the solvency of a personal check and thus rely on banks and credit card companies. It’s a slow, inefficient, and costly system.”

Cash is safer for consumers, he argues, but it’s less convenient. (On the flip side, credit cards are safer for merchants, who are far less likely to have to deal with a masked robber holding a 12-gauge and demanding credit card details.)

That leaves Bitcoin, which like cash offers a peer-to-peer transaction. There is no third party to verify the currency’s value, and you cannot print counterfeit Bitcoins. And, of course, there’s the anonymity.

But these same features make Bitcoins more or less irrecoverable if someone steals them. Which can happen.

Meanwhile, there is a steeper learning curve with Bitcoin than there was with credit cards. Users need to understand digital wallets, how to keep money offline and at least the basic idea of encryption.

Merchants, then, need to integrate Bitcoin payments, though reports from merchants seem to indicate that’s no real trouble, aside from processing times.

The big plus for merchants accepting Bitcoin, Carney writes, is that they “will never need to worry if the payment they’re receiving is going to clear or if the currency is counterfeit.

“It won’t solve all payment fraud problems, but accepting Bitcoin makes trusting unknown customers a much safer bet.”

You can read the whole piece here.