Bitcoin Forum

With the risk of hacking being talked about a lot, it's a bit obvious to think what insurance options are available (or could be available) to protect us from our bitcoin being stolen.

It's a big need but so difficult to manage or implement successfully.

If I insured your bitcoin, how could I be sure that you didn't rob yourself to collect on the insurance?

Can bitcoin insurance ever become reality?

Bitcoin insurance is a reality, circle.com offers insurance.

elliptic VAULT also offers insurance.

You Bitmixer.io signature posters are always so full of questions!   You're always the ones creating new threads.  Im sure its genuine curiosity :)

-B-

It is genuine curiosity, but I only speak for myself. Did you have anything constructive to add to this discussion or question? Or are you trolling for opportunities to harass?

If you think my questions or threads or posts are trivial, noise, trolling, or a nuisance, please do me a favor and let me know.

I participate in a signature ad campaign because it allows me to 1) make some small money, and 2) become more fully immersed in the bitcoin economy. If my comments ever cross the line from constructive I'd appreciate anyone letting me know so I can make changes. I only want to be a constructive participant.

I don't see how will it be possible. As the exchanges could just claim to be hacked, by transferring their own coins to one of their own wallet.
And ask for insurance. Now like now, it will be impossible to prove that.

So is Coinbase http://blog.coinbase.com/post/95927658922/coinbase-is-insured (http://blog.coinbase.com/post/95927658922/coinbase-is-insured)

Great, another one to the list.

I still dont get how loans and insurances work. Who's going to stop you from not paying? unless you give them all your credentials before or something so they can trace you.

As an insurance agency you are a legal entity (at least in the USA). Right now most likely companies like Circle and Coinbase have insurance agencies that will back up their bitcoin assets with cash if they get hacked, in which case coinbase/circle will have to purchase bitcoins with that cash in order to give their customers their coins back.

Insurance agencies also have to purchase insurance from the government so that if for any reason the insurance agency goes bankrupt, then the government fills the insurance claims.

If we go to an all bitcoin system we would have to rely on strong insurance companies with proof of reserves for x% of the stuff that they insure. Even then since we couldn't force them to pay out the bitcoins (because we don't have their private keys) then it would just come down to jail time if they don't pay.

You can't blame them for it though, it might be helping a fe people :P

Well if its being done, it should be done widely. This would help give peace of mind to potential new users. It would also hopefully deter would-be in house "hackers" since insurance companies are very likely to carry out their own investigations.

With insurance and fraud protection we can compete with Visa and MasterCard. Transfer costs will increase accordingly, probably why it costs 2% to use them. The customer will have to pay for any increase in services offered.

Yes, rather easily. This is programmable money we're talking about. Anything you can dream up can be coded.

I think he means, who would it work with Bitcoin, which has no recourse for mistake or fraud transactions and is largely anonymous. Your explanation is the traditional sense of insurance. Reserves and financial ability aside, how would a company insure unaffiliated or cold wallets? Coinbase is an exception because they own every wallet...no Coinbase customer is provided the private key, so the Coinbase isn't actually providing insurance but rather owning every deposit customers give them and promising to pay it out when it's requested.

Absolutely, insurance is inherently pretty easy to program so btc is a good fit

True enough, although circle does fiat side as well so I guess it's not a big problem
Could also add in stripe and square since they both are insured but take bitcoin now
Never heard of elliptic vault but I'll need to check it out (ah did neat https://www.elliptic.co/vault)

Hmm.. Bitcoin insurance? Sound great but.. Well.. like you say, how can we make sure the person is not cheating? I mean.. Bitcoin was created with anonymous and privacy in mind. So, it is hard to track whether the 'robber' is the person him/her self.

However, if we have a trade insurance.. it will be better.

This is a big problem and will lead to many people committing this fraud, but remember insurance fraud is also very common in the real world. Many people rob their own houses or lie about the stuff they owned to claim insurance money. It's just something the business has to deal with.

Yes, it is a reality.  I only use buy, sell, and use wallets on services that claim to be insured. 

No. Bitcoin insurance will never come in to existence. It is too complex. Even if some one tries to come up with an insurance, the premium rates will be prohibitive.

I agree with this.
Insurance is very complex staff and in most countries is regulated very strictly by the law and controlled by the government.
As we know, bitcoin is not regulated by the government, or some central entity, so such scenario is not possible.

The biggest problem in the space is how do you differ bitcoin stolen and lost ?

just to feed the troll: It might just be the chicken and the egg. Being curious led me to signature campaigns and now it is paying off to be curious. But now everytime I post something the question pops up if I am only posting to get my post count for the campaign or it is stil genuine curiousity in the botcoin community. I can assure you for most of the sig campaigners it is the latter, we just found a way to monotize our curiousity.

OT: Isn't is as in the sig of Bittburger a bit backwards  to rely on insurance and old behemoths of financial institutions. Putting our trust out of our hands and giving back the power to the ones we took it from by instantiating the Crypto revolution?

Coinbase and Circle are not really "insured". If your account gets hacked, they don't give you a penny:

Check my thread about it and the comments inside:

https://bitcointalk.org/index.php?topic=960437.msg10517604#msg10517604

I think they just offer insurance against things that may go wrong with the company do to their fault, so your coins may be ensured against the business going bust, but not if you lose your coins yourself.

I thought they were insured against hacks

Long time lurker.. Wouldnt insurance be fairly trivial for bitcoin (for a "savings account", not an account like a "checking account")?

I create an insurance company.

I will insure your bitcoin balance for a specific wallet.

This wallet is 2/3 multisig where I control one private key, you control one.

Insurance stipulates, as long as you follow the procedure (I verify a transaction is legitimate through my own means, could be tedious like 2fa + a phone call to you) then the balance is insured.

If a transaction goes through using this process, the transaction was legitimate regardless of what you say (the transaction that goes through via this method is not insured)

So basically, it would be impossible to "jive" this system.

edit:  to clarify, we agree, both you and I, ahead of time "Ok, I will insure your 100,000 BTC balance as long as we both can agree on a process where we both feel assured that a proper transaction has taken place.  Number one, no more than 1 transaction can occur per day.  An email will be sent to you after every transaction.  An SMS will be sent on any transaction over 10 BTC.  Under 1 BTC requires 2fa.  Anything over 1 btc and it requires 2fa plus I will call you and you answer the secret question.  etc.. etc..."

Although it sounds "heavy", in reality, it is fairly trivial, and not only guarantees your money could never be stolen (moreso than a bank) but I can even give you interest on your "savings" since this process is similar to what we perceive as a savings account at a bank.  Interest would allow for leveraging a small part of your balance which is a whole new process, but again, trivialized at the user level.

New upcoming Bitcoin exchange Gemini is fully insured:

https://blog.gemini.com/welcome-to-gemini/


Your Bitcoin on Gemini exchange will be fully insured in the appropriate US dollar amount.

All bitcoins stored in Xapo's Vault are 100% insured, and arguably the only truly insured bitcoin storage in existence, in which you are protected not only from any loss of bitcoin, but protected in the odd chance Xapo itself as a company ever dissolves. We've accomplished this by forming a captive insurance company. Details can be read in our FAQ: support.xapo.com/insurance

I don't think bitcoin insurance is even a possiblity , after reading some comments that coinbase and circle provide insurance to the accounts
But then again this guys post cleared my doubt!

https://bitcointalk.org/index.php?topic=960437.msg10517604#msg10517604

Coinbase is insured against employee theft and hacking in an amount that exceeds the average value of online bitcoin it holds at any given time. Specifically, Coinbase's insurance policy would respond in the event that bitcoin stored in Coinbase was lost or stolen as a result of a breach of our physical security, cyber security, or as a result of employee theft.

Coinbase has held this insurance since November 2013 with highly rated carriers (S&P rating of A+ or A.M. Best Rating of A XV or higher).

This insurance policy does not cover damages resulting from a specific user's loss, such as the losses resulting from a compromise of the user's login credentials. Coinbase's insurance also contains standard policy exclusions (e.x. force majeure). Should information regarding this coverage materially change, we’ll update this and other relevant pages in a timely manner.

What type of an insurance you were hoping Coinable and Circle carry? One which covers thousands of users scamming their own accounts?

https://bitcointalk.org/index.php?topic=965719.0

According to that a company is offering insured trading. Insurance isn't such a massive issue and most legit companies will have insurance that covers their own end at least (though not for users 'claiming; their funds got 'hacked'.

I don;t think that;s too easy to make so, no.

Great question on this topic, i was talking about this a few weeks back in how complex this could be, to insure a decentralize currency like bitcoin we would need some huge fiat backing since most of the people that
talk about insurance of btc are fiat holders trying to invest in btc.

I never assumed it was other way than that...

yes mate.. I dont see it happening as well..lots of scamming possibility.. At least Im not getting involved in one.. Would like to see if it works out though..

What's in it for us ?
A company get's hacked , they got themself insured but would they really give us that?

Today it is now a reality.  Bitcoin insurance provide by BitGo:

https://bitcoinmagazine.com/19382/breaking-news-bitgo-unleashes-fdic-like-insurance-ushering-new-era-bitcoin-security/

https://bitcoinmagazine.com/wp-content/uploads/2015/02/xlgroup.jpg

Step by step, getting all the infrastructure in place we need.  Lovin' it!!!

http://38.media.tumblr.com/tumblr_m9wfnqCPCc1qdzdoyo1_r2_500.gif

surely bitcoin is safe.  What is not safe are some sites evil intensionados  trying to catch our BTC with cheap advertising.

i don't think you can insure your own held btc.  exchanges would be more than happy to charge you a fee (insurance) to pretend to keep your coins safer.

Insurance is obtainable with a little luck and a team of underwriters willing to undertake a year to handle the due diligence, compliance, checks, balances, controls and procedures to mitigate any activity down to a criminal matter which can be clearly defined and insured against.  This is common place in most systems that manage valuable assets.  There are a few who have navigated the space to bring a higher level of clarity to this new class of product but insuring one's self is a little disingenuous.  It is a process where you must be challenged, doubted and questioned.  Bit Go seems to have done a great job and we commend them!

We couldn't help but say something here, only being the second post of course.  We have been duct taped, blindfolded and hog tied from saying anything but soon we will finally have something to say.  It will be to the dismay of a few and a hooray to the many.

Insurance companies can employ crypto currency specialists to protect their interest, and I have dealt with those specialist earlier when my house was broken into last year.

They will find "small" things not to pay claims ....like :

1. Sorry sir, you anti-virus was not updated at the time....
2. Sorry madam, you should have implemented 2FA on your online wallet....
3. Sorry sir, your webcam was not covered....

They always find ingenius reasons not to pay.... and it's always your fualt. {I once had a claim for damage to my car in a 4 car pile up... I was in the middle... and they denied my claim, because according to them, one of the 4 tyres on my car was too smooth, and not within road traffic regulations.

They will jump on the opportunity.... Bitcoins have many loopholes for them not to pay.  >:( >:( >:(

Though they are at more risk that way

if they run off with your coin.. your insurer won't exist either. hehe