After posting this, it occurred to me that the problem comes from the fact that people make mistakes.
In the world of bitcoin, your private key is your bitcoin. There are no do overs. Obviously, if all of life functioned this way, it would be challenging. Imagine if you lost your house if you lost your key, or if you lost legal custody of your children if you lost your key.
Instead we have courts. And on the internet we have a horrible contorted process that is full of holes but doesn't carry the same all or nothing consequences of a keypairs system.
Navigating what will happen to your real world things if you accidentally lose or expose your private key will probably always be an impediment to fixing the data breach problem.
Sure, mistakes are made, but credit cards going from number (i.e. private key) to pin and chip (generating a token for each transaction) reduces the impact of a data breach tremendously. An individual can still screw it up, but they could lose their entire credit card before too. At least now it's only user error to worry about and not the centralized honeypots of user data.
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