Imagine a wallet (hot or not) becomes the market leader and more than half the existing bitcoins are stored there.
Then imagine it's security is breached.
If this happens at a time when bitcoin has been mass accepted and it is a dominant currency to store wealth in world-wide - then a criminal could be in possession of half the wealth in the world.....
Sounds surreal and could not happen in a FIAT system.
One word... fork.
RedSn0w, give us more than one word. Explain yourself.
To the OP, great question...Could something be done on the blockchain to provide added security? It makes the idea of cold storage a lot more valuable, imperative. There's no one great answer, yet...unless RedSn0w can explain how the fork is going to save us.