I think this is where my understanding breaks down. If we can potentially have paper wallets with keys not being present on the network, how can transactions be made? Surely, to fake a transaction or to falsify a wallet balance you need to be able to access the wallet’s private key?
Are you suggesting that if a section was compromised, then they wouldn’t need access to any wallets, as they would just fabricate the whole thing (source wallet balance, keys, the lot)? If so, is that any different to using data objects? That is, if that part of the network is so badly disrupted, then it can fake actions?
Edit: Presumably, a general solution to prevent sections becoming compromised would be ideal here, rather than a safecoin specific solution? E.g. other stable sections confirming transactions from unstable sections and so forth.