Insurance against theft or loss of bitcoins

[MJGrae]

Cue an ad for BIP38 (Password-Protected Paper Wallets).

If I were to create password-protected paper wallets, and put copies in two separate safety deposit boxes at two different banks, and then memorize the passphrase as well as share it with one or two trusted individuals, that's a whole lot better than shoving cash under the mattress.

Point conceded, good sir. But that's quite a bit of extra work and you're still putting trust in other individuals. Not to mention the cost of the safety deposit boxes which, on an annual basis could (I'm not saying they would, but they could) exceed the cost of the insurance itself.

Would it not be beneficial in some people's eyes to have the easier access, with less hassle, of the insurance based model than the paper wallet model? As I'm sure there are plenty of people that would not divorce themselves from their paper wallets, and others who would never bring themselves to adopt them.

You could argue that the extra risk associated with trusting a third party insurer creates an extra "risk cost" as opposed to your trusted individuals, but the different costs and risks associated may very well balance each other out to be rather equal in the end, assuming that an extremely trustworthy insurance entity came to be.

Then my argument would shift to the idea that having the client-insurance based model would lead to more opportunities for extra utility as opposed to the paper wallet.

[datz]

It will work.

[franky1]

lol is this insurance thread still trrying to promote its money making scheme with promises to protect you but having so many clauses to protect itself that it never has to pay out.

everyone with half a brain knows that the cost of 'contents' insurance for homes is not worth the paper it is printed on. most smart people know that a $20 lock on the door is better insurance to protect their $500 TV then an insurance premium of $10 a month would ever be.. and here is why

chances of your house being broken into is less 1 chance in 5 years. so the $10 premium is not a cost saving compared to just buying a new TV.

if you did infact get a theif in your home, the insurance company will do 3 things.
1. charge you an excess fee which reduces the potential payout of $500 for a TV to be maybe $450.
2. use smart sells pitch words such as "valuation figures" "wear and tear value" "age of equipment" to imply that the Tv is worth alot less now due to age and they will maybe take another $100 off of the bill.
3. they will ask questions such as what security your house has, if none they will not pay because you have not done any preventative tasks to avoid the theft. and if you do have their recommended security to meet all the clauses the cost of the security would outweigh the $350 they would have finally offered.

its the same with banks. the whole financial compensation schemes if banks go bankrupt, which is an insurance policy. but tell me honestly, with all the legality that these financial insurance companies have. how many individual hard workers have actually had a proper reimbursment for losses, which did NOT involve getting the the money back from the theif (chargeback)

securing your home/bitcoin is cheaper and more of a guarantee of loss prevention compared to having an insurance policy.

[Lorren]

A $20 lock on the door won't be of any help to you if your computer has a freak malfunction and catches your house on fire.  That's what happened to us about 5 years ago... the content insurance amounted to tens of thousands for us.

But back to Bitcoin insurance.  While many people won't find it necessary, I think that some people will.  Most of the people who hold Bitcoin today are able to secure it reasonably well.  What about grandma and grandpa though?  A lot of them barely even know how to turn on a computer.  At some point, if Bitcoin becomes widespread enough, BTC would attract all of those people who think that it's a good idea to click on links in emails they get from unknown people.  They're going to want insurance.

It's an idea whose time has probably not come yet, but thinking way down the line, there are a lot of people who have yet to adopt the currency that would want it.

[franky1]

A $20 lock on the door won't be of any help to you if your computer has a freak malfunction and catches your house on fire.  That's what happened to us about 5 years ago... the content insurance amounted to tens of thousands for us.

But back to Bitcoin insurance.  While many people won't find it necessary, I think that some people will.  Most of the people who hold Bitcoin today are able to secure it reasonably well.  What about grandma and grandpa though?  A lot of them barely even know how to turn on a computer.  At some point, if Bitcoin becomes widespread enough, BTC would attract all of those people who think that it's a good idea to click on links in emails they get from unknown people.  They're going to want insurance.

It's an idea whose time has probably not come yet, but thinking way down the line, there are a lot of people who have yet to adopt the currency that would want it.

but its those old grandma's and grampa's that fall for these "web browser miner" web-links that are trojans that will also be later informed about clauses x,y,z of insurance policies stating not having antivirus, not having their bitcoins in paper wallets, basically not protecting their property = no payout.

much like house insurance that probably asked a few questions as to how the computer could cause the fire, and challenged if it may have been deliberate, attempting to avoid claim payouts. which with a majority of the elderly, may not have the smarts to give viable answers to ensure the claim is successful.

its far cheaper to not have flamable products near a computer and a lock on the door. and be told the precautions to take. then to just pay a premium with promises before hand and a long list of breached clauses after the fact.

[Traktion]

Of course there will be insurance, should there be a demand for it. TBH, I'm not sure why anyone would argue otherwise.

Bitcoin isn't anything special in terms of something to insure. The same rules apply as for any other asset.

Ofc, the insurer would need to assess how securely the Bitcoins are stored* before being able to calculate a premium. That's nothing new either though.


[* EDIT: To add, you can insure gold coins in a safe, for example. Sure, you could 'steal' them yourself, but that is factored in by the insurer.]

[caveden]

Of course there will be insurance, should there be a demand for it. TBH, I'm not sure why anyone would argue otherwise.

The argument is whether or not there would be enough demand for it.

I for ex. don't see much demand for it. It's theoretically possible to secure your bitcoins with hardware wallets + multi-signature, what would make them extremely difficult to steal in any significant amount. The only risks would be things like kidnapping, but that's another realm.

[franky1]

im more thinking along the lines that some half whit 17yo basement dweller proposes to be an insurer, and not a proper insurance institution with all the legal licences.

i read like 50 threads which seem to be from 'teentrepreneurs' with their business plans.