Gavin Andresen - 2011-06-17 12:42:54

If your device (computer, mobile phone) is infected and your bitcoin wallet keys are stored on that device (encrypted or not), then the bad guys will get your coins sooner or later.

Sooner if the wallet is not encrypted. Later if it is encrypted.

Come up with all the fancy "measure timing and enter your fingerprints and choose an 80-character-long password and store your private keys inside the Trusted Platform Module Chip" pseudo-security measures you like; if your device is infected they will not work.

The bad guys will simply hack the software so that you THINK you're securely sending 1 bitcoin to your cousin (because that's what it says on the screen), but instead you're REALLY authorizing sending your entire bitcoin balance to the bad guys.