Bitcoin Forum

I have some money in btc-e.
I want to move my money out, but due to withdrawal limits it will probably take me some time.
I rather avoid losing money due to btc-e.com being hacked, disappearing, defaulting etc.

Here is the deal i'm offering:

1. I will pay 0.3 BTC to escrow
2. You will pay 250 BTC to escrow (or less - see below)
3. The insurance period will start immediately after both payments are confirmed by the escrow
4. The insurance period will last one week (7 calendar days = 168 hours)
5. During the insurance period, in the case btc-e.com is hacked, defaults, disappears, or I am otherwise unable to withdraw my money from it for any reason, AND this situation is still occurring 192 hours (8 calendar days) after the beginning of insurance period, I will receive 250 BTC from the escrow. You will keep the insurance premium.
6. If #5 above does not happen (btc-e.com is not hacked, defaults, etc.), the 250 BTC will be returned to you after 7 calendar days, together with the premium.
7. Note that I am not interested in the case where btc-e.com is down for an hour or so and then recovers - only if I am unable to get my money out after 8 calendar days from the beginning of the insurance period, will the insurance be activated.

The event of btc-e.com being hacked, defaulting, disappearing and so on should be catastrophic enough to be easily determined. Also, I will not have to prove that I actually had 250 BTC in btc-e (I might have more or less at any given time). And no - I don't plan on hacking btc-e myself  :)

I will pay escrow fees.

If you have 250 BTC and you think the chances of such event happening _during one week_ are lower than 0.12% (0.3/250), then this should be a good deal for you.
Also, if you have less than 250 BTC, I might consider paying proportionally to what you are able to put (e.g. for coverage of 125 BTC I'll pay 0.15 BTC). 50 BTC minimum please.

I will post the results of the agreement in this thread. This is also an opportunity for you to increase your trust.

I don't think this has been tried before, it will be interesting to see how it will turn out.

I don't think anyone would do this, why risk 250 BTC for 0.3 BTC?  ???

It's a matter of probabilities - if you think the chances of btc-e going down _during one week_ are less than 0.12%, then this is a good deal.

You have insurance on your car right? This is basically the same thing.

Also, you don't have to risk 250 BTC. As I said, I might consider paying proportionally so you can put 50 and I'll pay 0.06. For one week, that's 6.4% interest rate so it's actually quite a good offer.

Haha..you want someone to escrow 250,000$ worth of bit coins to earn 0.3 ? You must be gone funny in the head m8 lol

jajajjaja this has to be a joke

Who needs your 300$ if they have 250k $?
This is one crazy offer.

This is what insurance companies do all the time.  

I'm afraid though that it is going to be hard to find anyone to take you up on your offer because on the surface it doesn't sound that great, risk 250 BTC for .3 BTC.  

An insurance company might also want some verification that you actually have 250 BTC in btc-e however and that when it is recovered if btc-e goes down the 250 BTC go to them (since they will have already paid you "your" 250 btc).  However, you've explicitly said you wont verify that, so this is just basically a short term option (or high odds bet) on btc-e.

Good Luck!

To the naysayers, I'll say this. Do you have life insurance? A typical life insurance will pay 250K, and for that you pay ~100$ per year. Who wants to risk 250K for 100$ per year? Is this a joke? No, it's called insurance and it's based on probabilities.

Thanks. You are mostly right, except I think there is no "my" 250 btc and "their" 250 btc. If I buy fire insurance and my house burns down (say 250K in damage), my insurance company does not expect me to give them the house after it's rebuilt. That's why I pay the premium for - to cover the damage and that's all.

And a fire insurance for a 250K house is probably about ~300$ per year (depending on various factors). And that's for a _whole year_. I am looking for coverage for _one week_.

Anyone taking part in a crazy deal like this would be stupid to not include some deal like that. If someone steals your car and you get paid for it the insurance company owns your car if it's ever recovered. It's the same if you wreck it, they own what's left. I'm sure there's something similar about stolen property in a home owners insurance policy too, not to mention a deductible and the fact that a claim isn't always a total loss.

 ::)

OK, I see that asking for 250 BTC is probably too much. I was hoping some old miner with deep pockets will pop up, doesn't seem so.

Suppose instead of 250 BTC it's only, say 10 BTC. Other terms stay the same. What would be your price then? I won't hold anyone for it - just interested in what people think.

If you pay $100 per year for life insurance, from birth to age 100, thats $10k over your lifetime, and your beneficiary gets $250k. Sounds like a good deal to me.

Back on topic, this deal looks more like a setup than anything else. It either says to me, you think you can have BTC-E ddosed for less than $250k for a week (which I'm sure you could)  Or you find that the risk to reward ratio is good enough to try to win on a technicallity.



Of the things I highlighted, this seems like a trick to try and weasel a technicallity. If you are unable to withdraw your money from BTC-E after 8 days because you forgot your password, you would techincally win. Or if you request a wire transfer to your bank, chances are it will take more than 8 days, in which case, you also win. While you said you would not hack BTC-E, you didn't say that you wouldn't hire someone to try.

And if that isn't enough, assuming you are being completely legit, and feel like gambling with the big stakes, how are you going to get someone to escrow $250,000 in BTC. There are some trusted people about, but I wouldn't trust anyone with that kind of money.

Well the point was not starting an argument. It was asking for a service, and doing some kind of an experiment to see if it will actually work along the way. The experiment obviously failed. I actually expected that in a way, I guess. Oh well...

To defend myself a bit:

* At my age I do pay about ~$100 per year for my life insurance. I don't expect to pay that when I'm 80 though. Again it's all about probabilities.
* I am working with btc so there are no fiat delays
* I specifically said that if btc-e is down for an hour or so that is fine. That includes ddos.
* The eight day term is there exactly to protect the insurer if btc-e is down due to ddos during the last hour of the 7-day period. They have additional day to recover before the insurance activates. I was actually trying to be fair.
* Hiring someone to hack btc-e and getting measly 250 BTC through some elaborate forum scam? If I was really aiming to hack btc-e I would aim for 1000s, considering their volume, and I would keep it secret...
* "for any reason" - that means other scenarios I might not think about such as btc-e having a rogue employee, disk crash, building fire, whatever. Anything catastrophic enough such that it affects all users and as such is easily verifiable. Not me being silly and forgetting a password.
* With a 2 out of 3 key scheme the escrow does not have to actually hold 250 btc, only to hold one key and mediate in case of a dispute.

If you read my terms closely you will see I was actually trying to be fair. The only thing you could argue I am not being fair about is the price. But that's up to how you estimate the probabilities. If instead of 0.3 btc I was offering 100 btc, would you go for it now? What's your price then?

mandelbert, WTF?

Your insurance would fall under "specialty insurance," and that's ALWAYS more expensive than traditional insurance.

This would be most similar to K&R insurance (Kidnap and Ransom Insurance) that businessman get when traveling to dangerous foreign countries.






A more realistic offer would be:     100 BTC (INSURER) FOR 12 BTC (YOU)




Ref: https://en.wikipedia.org/wiki/Kidnap_and_ransom_insurance (https://en.wikipedia.org/wiki/Kidnap_and_ransom_insurance)

i think you are better off using that 0.3 btc to get a bunch of hard-/thumb-drives and storing your BTC offline. a paper wallet stored in a save place(s) would probably be even better.

of course you have to research how to backup your wallet/secret-key. but that should all be possible within 0.3 BTC. you could start by trying to backup 0.3 BTC

this way the probability of BTC-e going down becomes mostly irrelevant. the less people you have to trust the better...

insurance provider's don;t use your $100 a year contribution ot pay you out...

They bet on the fact, that 10 million people are paying $100 and that only a few of them a year actually require the use. generating profit. Something like Katrina hit's and insurance companies pay out more than they have and boom. gone.

This whole process is silly..

Have you read the OP?

sorry, i guess i misread. i should have read it more attentively

Salty did a good job pointing out some potential weasel words, but I don't think you were trying to be sneaky.

Life insurance is not a good analogy because there is not a lot of risk of fraud with life insurance because in order to get it you have to be, well, dead.

Homeowners insurance will also only reimburse you for your actual losses, which is not what you are talking about here, e.g. I may or may not have 250 BTC in btc-e.

Maybe if you also escrowed your BTC-e account credentials.  In the event of nonpayment the "insurer" pays you the 250 BTC but gets your account and the BTC within (when and if BTC-e gets back up).  The insurer would also probably want to stipulate that you will not be paid from escrow more than your actual BTC-e balance.

An arrangement like that would protect you from your legitimate purpose of wanting to be sure to have access to your coins if you need them, but not basically be a high odds wager on the stability/veracity of btc-e.  It would also protect you from an inputs.io type debacle.

If I had the BTC to do this (and regretfully I do not) I would want 1% of the amount protected per week as the premium not to exceed the amount to be kept in the account, with the account to transfer to me on the event of a payout to you.  1% to be guaranteed access to your coins if you need them seems about right given that there are not a lot of other people to sell this type of insurance to in order to spread out the risk - as takagari pointed out.

If you are serious, you might want to offer something along those lines, I imagine someone might consider your offer, or at least make a counter one.  However, as you said this is mostly an experiment, good luck!

not sure if brilliantly complex scam

or just plain retarded

Also it could be YOU who DDos's the site & claims the escrow. :/

He got me cracking up..   :) I like the thinking malfunctions, we usually say see a doctor if its for real....

There are a million things wrong with this - start that it's on an internet forum and you're asking someone up put up 250 BTC.  Someone with 250 BTC might want to hire a lawyer for this contract.  Who's to say OP won't attack sit ehimself, and who makes the call and shows the proof that the site is down or you can't withdraw?

Why is it obvious this is a raging scam?

Because no one with the sense to actually construct a legit scheme like this would ever let 250 BTC accumulate on BTC-e without doing something about it. If 250 BTC was too much for this person to comfortably keep in BTC-e he would've already done something about it, and if 250 BTC is just a small fraction of his total BTC holdings, then he wouldn't be soliciting this kind of arrangement in the first place.

So basically the OP is soliciting funds to perform a transaction that, in the absolute best possible case scenario, is only happening because he's a moron!

This thread has to be shenanigans.  No one is this dense. 

Insurance companies don't escrow that 250K though. It comes out of their funds when needed. So a better analogy is an agreement to insure you, but not escrow the bitcoins. That is especially appropriate in an unsafe and unregulated market (unlike with an insurance company).

For simplicity sake lets say 1 BTC=1000$.
Where have you seen an insurance policy that gives you 250k$ for a 300$ insurance?
What doesn't exist in real life should not exist here, because what you are offering is not fair at all.

Not true. What you're referring to is known as a Credit Default Swap (CDS) and they are insurance-type financial instruments that were a bit part of the cause of the 2008 financial crisis.

For instance, if someone owned $10 Million of IBM bonds and wanted to insure those bonds against total loss, they would purchase a credit default swap for IBM Bonds for $10 Million. A highly stable company like IBM would have very low risk of default and, consequently, companies would offer very low premiums for 'insuring' against default of those bonds.

So, the IBM bondholder would pay an amount like $300,000 (3% of $10,000,000) to the CDS seller. The CDS seller (often an institutional investor like CalPERS, the California Public Employees Retirement System) would receive a nice income each year and the IBM Bondholder would sleep soundly knowing that he was A-OK if IBM went belly up overnight.

SO, yes these do exist and are still in use today!

The issue with CDS is that the risk has to be valued appropriately. Many institutional investors were misled about the risk of the underlying assets they were 'insuring'. I wouldn't know how to rate this kind of risk of default, but there is a fair number out there somewhere.

Horrible scam, really, horrible. That line practically ensures you get the escrow, because you used the word, ANY. So if you're too lazy to withdraw the 0.2 BTC you likely have in BTC-e, you magically get 250 BTC.

Go scam EVE or something, and stop trying to teach us about life insurance.

Is this where you landed, Jon Corzine? I remember you from the old days.


http://lolfed.com/wp-content/uploads/corzine.jpg

So you think Btc-e has a 0.1% chance of going down and you need insurance for this? lol. Want some insurance for walking across the street tomorrow?

Although everyone is bashing the OP, I agree that such a service would be highly useful for the bitcoin economy. It's stupid that site owners can just run with everyone's money with almost no warning.

Call Lloyds of London. They insure damn near everything.

I am not an actuarial but know enough about it that for this particular policy (250 BTC payoff on a default of an anonymous third world overseas website) would cost a whole lot more than .3 and given that all have the same risk of default with no offset I don't suspect there will be much interest in providing it.

But we could establish an OTC swaps market on credit default. I think Ripple and Coinbase are working on such capabilities. Then if you wanted to buy a structured CDS on the exchange you could pay whoever was willing to sell it to you. And also willing to put their BTC into escrow in this case, which is the major difference. Insurance companies net take in proceeds each month, they can invest all of it and they do, that is where a lot of their money comes from. They would never put a policy payout amount in escrow before the event.

Yes purely insurance would be difficult to do, but CDS's are definitely viable. Furthermore, reliable/confident companies can in fact sell shares protecting against their own default as a way to earn additional revenue and provide customer confidence.

So did anyone do this and make the 0.3btc because i believe BTC-E didnt go down or get screwed over during this time!

Doubt that anyone was willing to risk the 250BTC.

Uhhhh here's an idea... Withdraw 100 BTC to Bitstamp, 50 BTC to a wallet, leave 100 BTC on BTC-e.  You can always grab the 100 BTC off Stamp later, you don't need to sell the BTC.  Once the first 100 BTC is cashed out from BTC-e, move another 100 in.  Free insurance.