Bitcoin Insurance

[Eisenhower34]

Ok ladies and gentleman, I started with this thing two weeks ago while i was always worried that pirate would default on the one hand and on the other hand loved those 7% weekly, so please whenever you read pirate think of him like hes still paying interest.


http://bitcoin-insurance.com/

Bitcoin Insurance (BI)

Aim:
1) Split the risk for investors of high risk securites (like pirate)
2) Offer good investment possibilities for others

Idea:
A user A believes that pirate will default, a user B (perhaps pirate himself) doesnt think that.
In this case B would sell insurance policies and A would buy insurance policy.
Each policy is valid for 1 cycle (12 weeks) and sold the week before the cycle starts.
A policy can only be sold if there are users on both sides (A and B).
Policies represent a value of 1 BTC each.
Bitcoin Insurance will work with the BTC in low risk investments to generate some extra interest (perhaps 7.5% per month)
After the cycle starts, you can still trade (no fix price) policies in case there are A and B users wanting to trade.

1 week after the end of the cycle the winners get all the invested capital.
The 7.5% per month are paid at the end to the loser.


==========
The math Example: A user A wants 100% of his pirate capital insured

A invests 100 BTC in Bitcoin Insurance buying pirate policies and 100 BTC in Pirate bonds paying 7% weekly
B invests 100 BTC in Bitcoin Insurance selling pirate policies

In case pirate defaults:
A will get 100BTC + 100BTC from BI, lost 100 BTC to pirate. total 200 BTC investment riskfree with 0 BTC interest
B will lose 100 - 45 BTC with BI

In case pirate does not default
A will lose 100 - 45 BTC with BI, but get 100 + 125 back from pirate. total 200 BTC investment riskfree with 70 BTC interest
B will win 100 + 100 BTC with BI, total 100 BTC investment with 100 BTC interest


Where is the win?
A can make 35% interest in 3 months with 100% of his capital covered RISKFREE!!!
B can make 100% interest in 3 months with 45% covered in case of a default
==========
A second math example: A user A wants 50% of his pirate capital insured

A invests 50 BTC in Bitcoin Insurance buying pirate policies and 100 BTC in Pirate bonds paying 7% weekly
B invests 50 BTC in Bitcoin Insurance selling pirate policies

In case pirate defaults:
A will get 50BTC + 50BTC from BI, lost 100 BTC to pirate. total 150 BTC investment with 0 BTC interest lost only 50% of his pirate capital
B will lose 50 - 22.5 BTC with BI

In case pirate does not default
A will lose 50 - 22.5 BTC with BI, but get 100 + 125 back from pirate. total 150 BTC investment with 97,5 BTC interest
B will win 50 + 50 BTC with BI, total 50 BTC investment with 50 BTC interest


Where is the win?
A can make 65% interest in 3 months with 50% of his capital covered!
B can make 100% interest in 3 months with 45% covered in case of a default
==========


Where is the profit for Bitcoin Insurance?
We will keep a small percentage of the extra interest generated by the invested capital
We will keep a small trading fee for "trading" policys during the cycle.

The system is adjustable so I can offer different prices for buyers and sellers of such policies and so on. The question is only which policy would be now the most requested by the comunity?

[1714052603]

1714052603

[1714052603]

1714052603

[1714052603]

1714052603

[1714052603]

1714052603

[1714052603]

1714052603

[1714052603]

1714052603

[buryfarmer]

I think your site is a scam

[DeathAndTaxes]

A can make 35% interest in 3 months with 100% of his capital covered RISKFREE!!!

35% Riskfree is an oxymoron.

[Eisenhower34]

I think your site is a scam

And some people are trolls... I sold over $7k in amazon GCs here, have several buys of BTC with paypal and not a single bad word about my biz ...

A can make 35% interest in 3 months with 100% of his capital covered RISKFREE!!!

35% Riskfree is an oxymoron.

ahem? black snow is an oxymoron, maybe you didnt understand the numbers... Those numbers must be adjusted for offers other than pirate but those were only "math examples for pirate" investments.

Im a bit disappointed regarding those two comments. One guy should be put into noobi section back again for those "scam" comments, not investigating my person and business on this forum, the other one didnt read it or didnt want to understand it ...

[Bitcoin Oz]

I think your site is a scam

Douchebag.

[Bitcoin Oz]

I think your site is a scam

And some people are trolls... I sold over $7k in amazon GCs here, have several buys of BTC with paypal and not a single bad word about my biz ...

A can make 35% interest in 3 months with 100% of his capital covered RISKFREE!!!

35% Riskfree is an oxymoron.

ahem? black snow is an oxymoron, maybe you didnt understand the numbers... Those numbers must be adjusted for offers than pirate but those were only "math examples for pirate" investments.

Im a bit disappointed regarding those two comments. One guy should be put into noobi section back again for those "scam" comments, not investigating my person and business on this forum, the other one didnt read it or didnt want to understand it ...

He is saying that no investment is 100% guaranteed. Depending on what you invest the premiums in.

Where are you investing the premiums for the 12 week periods ?

[Eisenhower34]

I thaught to split the investments, some GLBSE assets, some cash into mybitcointrade saving books, some to chungenhung ...
I will also need the input of the community here.

Would only pick the most savest and make a public subpage with a pie chart so everybody could see where his money goes. Splitting the investment should create more security and by putting a big part of the revenue aside should build a further secure net in case one of those investments fail to pay back.

[Bitcoin Oz]

I thaught to split the investments, some GLBSE assets, some cash into mybitcointrade saving books, some to chungenhung ...

Would only pick the most savest and make a public subpage with a pie chart so everybody could see where his money goes.

I would add Patrick and Kluge to the mix. Im not too sure about mybitcointrade as Ive never dealt with them but it seems like a HYIP looking at it from outside.

Be careful with GLBSE assets as many of them arent very liquid if you intend paying back the principal. Its not the best for short 12 week investments imo.

[Eisenhower34]

Problem with Patrick and Kluge would be, that i couldnt pay those 7.5% which is already less than you can make with mining ...

regarding mybitcointrade ... the Admins are from Germany / Austria and they are operating now for some time ...

Be careful with GLBSE assets as many of them arent very liquid if you intend paying back the principal. Its not the best for short 12 week investments imo.

exactly. thats why I planed only to put some assets into GLBSE so I can cash out easier and wont have losses because im forced to cash out.

[Serith]

This thread made me think about unique use of Bitcoin. Historically every insurance company had to be big and have deep pockets to hedge the risks, I think Bitcoin could change that, because even if you have one bitcoin it can be divided into thousands pieces to hedge the risks. An insurance buyer would combine the required insurance sum from many different sources using a trading platform where insurance buyers meet the sellers, that would bring decentralization into insurance business.

[cbeast]

Insurance companies are tied to banks that can print money at will to cover risks. This can't be done with Bitcoin. We have to come up with entirely new models that take advantage of Bitcoin's super powers unique qualities. This is where I came up with Escrow Self-Insurance.

[DeathAndTaxes]

This thread made me think about unique use of Bitcoin. Historically every insurance company had to be big and have deep pockets to hedge the risks, I think Bitcoin could change that, because even if you have one bitcoin it can be divided into thousands pieces to hedge the risks. An insurance buyer would combine the required insurance sum from many different sources using a trading platform where insurance buyers meet the sellers, that would bring decentralization into insurance business.

You can do the same thing with dollars and insurance companies routinely employ re-insurance to hedge risk.  The reason why insurance companies are large is:
a) a large number of diverse policies reduces the risk of adverse cashflow.   some require payment, most don't.  you don't need to win all the bets just a large enough % of remain profitable.
b) the margin on the average policy is relatively small.  there are significant fixed costs.  writing 2,000,000 homeowner policies is more profitable than writing 2 because houses are essentially the same and the risks don't vary that much other than by geography.

[cbeast]

This thread made me think about unique use of Bitcoin. Historically every insurance company had to be big and have deep pockets to hedge the risks, I think Bitcoin could change that, because even if you have one bitcoin it can be divided into thousands pieces to hedge the risks. An insurance buyer would combine the required insurance sum from many different sources using a trading platform where insurance buyers meet the sellers, that would bring decentralization into insurance business.

You can do the same thing with dollars and insurance companies routinely employ re-insurance to hedge risk.  The reason why insurance companies are large is:
a) a large number of diverse policies reduces the risk of adverse cashflow.   some require payment, most don't.  you don't need to win all the bets just a large enough % of remain profitable.
b) the margin on the average policy is relatively small.  there are significant fixed costs.  writing 2,000,000 homeowner policies is more profitable than writing 2 because houses are essentially the same and the risks don't vary that much other than by geography.

Insurance companies are a lot more complex than that. In fact, so complex nobody really knows what the hell they are doing. How do you assess risk on N rehypothecations mixed with layers upon layers of junk assets? There isn't even much of a risk of paying when nobody claims a default. I really wonder how many claims are genuinely owned by a bank or just estimated. The insurance company can collect the premiums and negotiate a settlement with the bank claiming the risk because it's less expensive than unraveling a financial instrument. Didn't anyone here pay attention to the 2008 crash?

Bitcoin may make such alchemy much easier or much more transparent, or both. I just hope someone comes up with useful insurance type mechanisms to satisfy the government regulators and the banks that own them.

[Eisenhower34]

My initial question is still unanswered / undiscussed. Is there now a market for insurances and what would be the best to start with? Like i said we planned to start with pirate but that possibility is now gone ...

[DannyHamilton]

Insurance companies are tied to banks that can print money at will to cover risks. This can't be done with Bitcoin . . .

Insurance companies existed before fiat money became popular, they will continue to exist when fiat is long gone.

[cbeast]

Insurance companies are tied to banks that can print money at will to cover risks. This can't be done with Bitcoin . . .

Insurance companies existed before fiat money became popular, they will continue to exist when fiat is long gone.

Those insurance companies are probably long gone with the horse and buggy. They may have the same name, but they don't operate the same way. The fiat money they once used has been replaced by credit default swaps and other bank created monstrosities that bear no resemblance to government coins and notes. I won't get into the slippery slope comparing actuaries to quants, except that both of them have the same motive, making profit by screwing their investors. Present company excepted, of course.