[ANN] [ICO CLOSED] Inchain - insurance for the crypto economy

[pawel7777]

...

Thank you for very good questions. And allow me to answer tomorrow because my eyes wanna sleep so much)

Sure, no rush.

I have 1 extra question:

7 How will you prevent potential abuse of exchange itself buying insurance after the hack but before official announcement?

A few of those have been answered before so I know the answer to those.

2) BTC and ETH only at first. Others may be added later.

4) As long as you pay your premium it makes no difference to Inchain whether or not you have the BTC in the exchange.

5) At the moment 12 exchanges/webservices are being considered according to the survey. It has also been implied that the premium will depend on the exchange you are using.

Thanks for that. But:

2 - if significant value of other alts are stolen, that would affect all holders. Unless exchange can cover losses themselves, they'd have to freeze a portion of every account.

4 - then hacker/exchange (or anyone aware of the hack before announcement) could easily drain entire inchain's capital

5 - this makes sense, that's what I thought.

[Kazadar]

4 - then hacker/exchange (or anyone aware of the hack before announcement) could easily drain entire inchain's capital

Most of those questions I dont know the answer to but they have stated there will be some mechanisms to prevent abuse. You also have a human insurance comittiee.

It shouldnt be possible to drain all the capital. The risk will be split between the exchanges so all the capital wont/cant be tied to a single exchange. But it is a potential exploit that they need to consider.

[Johnny00]

You can pay all needed costs and to get Inchain)))
[/quote]

What do you mean by this?

[Jcga]

Won't miss the Inchain ICO for sure

[Sergey_Inchain]

Is there ELI5 explanation of how such insurance will work in practice?

If I had my funds insured and the exchange was hacked - how do I make a claim? Who and how decide on whether I get paid and when?

Hi

Our oracles will be monitoring the exchanges, so in essence you won't need to make a claim. If the exchange confirms that it's been hacked and the losses are calculated and confirmed, you will be covered automatically. Please note, we are not going to insure your particular account but the entire platform (including your acc of course); meaning that if only your acc is hacked but the exchange itself is not affected, we won't cover your losses.

OK, thanks for replying.

1 Could you provide more details on your oracles?

2 Will you cover only bitcoin holdings (or other specified altcoins) or every crypto. What if someone steals only some obscure altcoin from exchange? Will you cover bitcoin equivalent? If so, how would you determine the price?

3 What if exchange gets hacked but loses only small part of bitcoins and exchange promised to cover the losses themselves?

4 If I wanted to insure say 100 btc on exchange, will you be verifying that I actually own such balance, or will you just take my word and charge me appropriate premium?

5 Will you only accept insurance for holdings at major, established exchanges/businesses or any?

6 How will you determine my compensation amount if exchange gets hacked and loses only part of their funds? I'd expect to be paid proportionally (ie if exchange loses 10% of their funds, I'd get 10% of the amount insured) but how will you know what are the total funds of the exchange etc?

The answers:

1 Look pls here: https://medium.com/@inchain/some-explanation-about-oracles-from-our-architect-andrey-zamovsky-www-facebook-com-nixoid-3921b0bc580c

2 We plan to cover BTC & ETH accounts only from the start. And if other altcoins are stolen - it's not an Inchain insurance case.

3 If insured has no loses then no compensation.

4 No, the verifying of this is very difficult task. We charge an appropriate insurance premium from the insured and we do not verify has the insured the money that he insures.

5 I think it depends on insurance rank of the service. If we see a major exchange has a very low insurance rank we will not offer to insure accounts on them. And vice versa.

6 Firstly, the Inchain strategy includes an establishment of shared and clear rules for cases when exchanges are hacked. This rules must be accepted by all exchanges/wallets that participate in Inchain insurance. These rules require a fully transparent info about a hack and losses from exchanges/wallets, also all losses must be spread evenly among exchange's users of a hacked cryptocurrency. A good example of this case is the Bitfinex case.

For now, almost every hack is transparent enough to understand how much assets lost.

[Sergey_Inchain]

4 - then hacker/exchange (or anyone aware of the hack before announcement) could easily drain entire inchain's capital

Could you pls explain how can a hacker/exchange drain an Inchain capital?

[Sergey_Inchain]

Owning coins doesnt really allow you to own the company. how can i own inchain?

You can pay all needed costs and to get Inchain)))

What do you mean by this?

Maybe I do not understand your question. And excuse me that I answer your question by a question. What do you mean whey you asked: "how can i own inchain?"?

[Sergey_Inchain]

I am glad to list your ICO on http://btc12.com/

btc12.com is exclusive bitcoin news/ico forum.

from now on you will have your own section on btc12.com

You can register a new account and post updates as you wish.

Many Chinese readers are coming to this forum, hunting for ICOs and seeking analysis accordingly.


cheers.

Thank you very much) Could you pls fix that Inchain accepts not only ETH, but also BTC. Thanx.

[Jcga]

Sergey may have a look at my msg plz tia.

[pawel7777]

2 We plan to cover BTC & ETH accounts only from the start. And if other altcoins are stolen - it's not an Inchain insurance case.

But if say Monero is stolen and exchange can't afford to cover losses from their own pocket, that would also affect BTC/ETH deposits. Exchange would have to limit deposits for every user, until they're solvent again.

3 If insured has no loses then no compensation.

So the insurance is paid out only if exchange goes bankrupt after the hack? Otherwise, every exchange will have to compensate their users, they'd have to allocate a portion of their fee income to cover the loss. The problem is, no one knows whether they'll manage to recover and how long will it take (could be a decade etc).

And how would that work in case of say Mt Gox? Afaik the process is still ongoing and it's still uncertain what are the losses and how much will they manage to recover.

4 No, the verifying of this is very difficult task. We charge an appropriate insurance premium from the insured and we do not verify has the insured the money that he insures.

That makes potential exploit very easy, see below (hacker/exchange draining inchain)

5 I think it depends on insurance rank of the service. If we see a major exchange has a very low insurance rank we will not offer to insure accounts on them. And vice versa.

6 Firstly, the Inchain strategy includes an establishment of shared and clear rules for cases when exchanges are hacked. This rules must be accepted by all exchanges/wallets that participate in Inchain insurance. These rules require a fully transparent info about a hack and losses from exchanges/wallets, also all losses must be spread evenly among exchange's users of a hacked cryptocurrency. A good example of this case is the Bitfinex case.

For now, almost every hack is transparent enough to understand how much assets lost.

OK, so insurance would be possible only for businesses which agree to cooperate/participate with inchain (disclose required info etc)?
To get the clear picture - Who are your target clients (who will buy insurance)? Are you aiming for exchanges (business) or exchange users (individuals)?

4 - then hacker/exchange (or anyone aware of the hack before announcement) could easily drain entire inchain's capital

Could you pls explain how can a hacker/exchange drain an Inchain capital?

They know about hack before anyone else does --> they buy inchain insurance --> hack is announced to the public --> they get paid the compensation from insurance

[Sergey_Inchain]

...
I have 1 extra question:

7 How will you prevent potential abuse of exchange itself buying insurance after the hack but before official announcement?

There can be some different solutions:
1) we can use some KYC service to stop insurance spam
2) we can restrict max insured balance to minimise a potential damage if some of the policies are an abuse
3) we can stop to issue insurance policies after the first minimal signal about hack is received
4) we can discuss with the community another ways to solve this problem

any suggestions?

[Kazadar]

...
I have 1 extra question:

7 How will you prevent potential abuse of exchange itself buying insurance after the hack but before official announcement?

There can be some different solutions:
1) we can use some KYC service to stop insurance spam
2) we can restrict max insured balance to minimise a potential damage if some of the policies are an abuse
3) we can stop to issue insurance policies after the first minimal signal about hack is received
4) we can discuss with the community another ways to solve this problem

any suggestions?

Another way which would make it harder to abuse would be to put a small delay between the time of purchase and the time the coverage sets in.

Maybe a 24 hour window from the insurance is purchased until a claim can be made. It would give at least give you a chance to spot any anomalies. Perhaps even alert exchange.

Sure it would still be possible to get around but every little bit helps.

[Sergey_Inchain]

...
I have 1 extra question:

7 How will you prevent potential abuse of exchange itself buying insurance after the hack but before official announcement?

There can be some different solutions:
1) we can use some KYC service to stop insurance spam
2) we can restrict max insured balance to minimise a potential damage if some of the policies are an abuse
3) we can stop to issue insurance policies after the first minimal signal about hack is received
4) we can discuss with the community another ways to solve this problem

any suggestions?

Another way which would make it harder to abuse would be to put a small delay between the time of purchase and the time the coverage sets in.

Maybe a 24 hour window from the insurance is purchased until a claim can be made. It would give at least give you a chance to spot any anomalies. Perhaps even alert exchange.

Sure it would still be possible to get around but every little bit helps.

Thank you! Really good idea) Today evening we will discuss the possible solutions with team and your suggestion will be in also.

[disconnectme]

I have been looking into the workings of insurance company recently so as to grasp inchain idea, one thing I realize is the capital base of these companies are huge and I read on this thread that Inchain needs $10 billion, in my own view I don't think you will be able to raise that huge capital through ICO alone and If not through ICO, are you planning to raise capital through the normal traditional means or how do you want to raise the capital.

[Sergey_Inchain]

I read on this thread that Inchain needs $10 billion

Hm. Can you pls show where did you read this?

[Kazadar]

I have been looking into the workings of insurance company recently so as to grasp inchain idea, one thing I realize is the capital base of these companies are huge and I read on this thread that Inchain needs $10 billion, in my own view I don't think you will be able to raise that huge capital through ICO alone and If not through ICO, are you planning to raise capital through the normal traditional means or how do you want to raise the capital.

The 10 billion is the bitcoin market cap. It has nothing to do with Inchain.
Its used as part of the business case to show why a crypto insurance company is needed.

[ShooterXD]

Nice portuguese translation in Google Translator.
Lol. Keep in touch

[Sergey_Inchain]

Nice portuguese translation in Google Translator.
Lol. Keep in touch

Sure?

[davidjcambra]

I loved your business model, good job Dev

[Sergey_Inchain]

I loved your business model, good job Dev

Thank you)