Bitcoin Insurance

[cryptocare]

Hello everyone,

I'm looking for opinions on a concept that I would like to release.

The issue for the majority of potential bitcoin users is the price volatility, which gives them uncertainty investing in the currency.

So what if there was a way to ensure that your investment is safe for a fee per month as an insurance package?

As an example, if a coin is worth $1000 and the user wants to protect it from dropping below $500, they can purchase an insurance package for a low monthly fee that would purchase the bitcoin for $1000 if it dropped below $500.

Is this something that you think would be beneficial to the bitcoin community and to the general risk side of the currency?

I have a platform ready to launch, let me know guys.

[1714483617]

1714483617

[unamis76]

Best Bitcoin insurance is paying attention to the market. If someone can't cope with volatility might as well not buy Bitcoin or invest elsewhere.

Depending on the fees and the market, this could end up costing quite a bit for the end user. I don't think this would be beneficial.

[cryptocare]

Sure for investors and tech people like us yes, but what about the syrian/indian/etc that wants to simply put their money into the currency as it's the best alternative?

[unholycactus]

Assuming people trust you, this could be possible.
I feel like the only reason why financial derivatives of Bitcoin is virtually non-existent right now is because of that trust issue.

Because of Bitcoin's nature, I don't see them coming anytime soon.

[craked5]

Hello everyone,

I'm looking for opinions on a concept that I would like to release.

The issue for the majority of potential bitcoin users is the price volatility, which gives them uncertainty investing in the currency.

So what if there was a way to ensure that your investment is safe for a fee per month as an insurance package?

As an example, if a coin is worth $1000 and the user wants to protect it from dropping below $500, they can purchase an insurance package for a low monthly fee that would purchase the bitcoin for $1000 if it dropped below $500.

Is this something that you think would be beneficial to the bitcoin community and to the general risk side of the currency?

I have a platform ready to launch, let me know guys.

It's "possible" but wouldn't work.
Bitcoin market is not that big. It's an important one but small enough to see a huge volatility of price.
You couldn't do that, just because if you tried, any whale who would like to make a dump would also take your insurance. And after the dumping price they created they'd just have to take your money.

[Kprawn]

So what do these people do, if the price is much higher than the purchase price? .... Pay more to the insurance company? The simple solution

will be to wait it out... the average Bitcoin price is actually very stable over a much longer period... and the price volatility is high in the short

term. So you going to pay insurance, because you are impatient?  

[cryptocare]

The idea would be that they only pay a small % (lets say 3%) of the original value when the insurance was applied for. Contracts can be 3/6/12 months.

So if the price went up they would make money, if it went down it's protected.

[unamis76]

Sure for investors and tech people like us yes, but what about the syrian/indian/etc that wants to simply put their money into the currency as it's the best alternative?

If they can't deal with volatility than it's probably not the best alternative for them. What works best for us isn't what works best for everyone, regardless of how good it may be. People must weigh in the pros and cons of what things are like and decide what's best for them. If the pros don't overweigh the cons (volatility), then it's probably best not to invest.

If you start insuring fiat, count me in...

So you going to pay insurance, because you are impatient?  

Basically this is what it's about.

The idea would be that they only pay a small % (lets say 3%) of the original value when the insurance was applied for. Contracts can be 3/6/12 months.

So if the price went up they would make money, if it went down it's protected.

Then let's put it this way: imagine the prices tank tomorrow, how would you keep it profitable for you?

[cryptocare]

The idea would be that they only pay a small % (lets say 3%) of the original value when the insurance was applied for. Contracts can be 3/6/12 months.

So if the price went up they would make money, if it went down it's protected.

Then let's put it this way: imagine the prices tank tomorrow, how would you keep it profitable for you?

That's the gamble for me, you take out the risk for other bitcoin users.

Thanks for the advice on this guys, i wanted a few more opinions before I launch. Will be operating in a few days.

[p_linz]

this sounds like there is a lot fraud potential on both ends. plus what about regulation of some kind? but good luck!

[cryptocare]

I think the best way to control fraud is to have a limited beta phase first, which would only allow a small number of users to apply for the insurance per month.

Regarding regulation, there is none which is a small issue, but as long as there's reserves for payouts I can't see it being a problem.
 

[franky1]

translation of OP's post.

for a small fee. you become a member of a club. that no matter what happens he will buy your coins off you for $500+

to me declaring yourself as an insurance provider in many countries requires you having an insurance registration and also a liability policy.
but what you are actually offering in reality is a resistance point market making exchange. where the resistance point (price wont fall below) is set at $500.

i can see benefits of this.(if done right honourably and transparently)
but i can see issues too

1. customers will need to know your real location (no PO BOX/virtual office/mail drop box) to slap you with a wet fish/court order should you disappear if times become tough.
2. most people wont join now. but wait for a price crash of under say, $600 before being tempted and then will not like to see crappy terms and conditions avoiding payouts, such as 'having had to be a member for 12 months', as an example.

[The Sceptical Chymist]

Yeah, this is basically a hedge against volatility.  That sort of thing is available in the stock market, but the bitcoin market is probably too fractured and too small for this.  But maybe not.  It's definitely not a bad idea, but it's something only people with a lot of money would want.  Not sure how many big-money investors are around and if they'd want to buy this sort of protection from a random guy on the internet.  No offense intended.

[franky1]

Yeah, this is basically a hedge against volatility.  That sort of thing is available in the stock market, but the bitcoin market is probably too fractured and too small for this.  But maybe not.  It's definitely not a bad idea, but it's something only people with a lot of money would want.  Not sure how many big-money investors are around and if they'd want to buy this sort of protection from a random guy on the internet.  No offense intended.

most fiat regulations are starting to implement rules where fiat based trading actually halts trading if a price crash drops by X%
im pretty sure bitcoin exchanges can themselves implement their own resistance point mechanisms without needing third party insurances. thus avoiding the paperwork and logistics or 'insurance'

sorry for being a buzzkill to the topic creator. im just offering out of the box opinions and thoughts to consider

[QuestionAuthority]

There could be a way to provide short selling "insurance" that could benefit all parties. The problem is if the price rises too much and you short sell you could lose a ton of money. You could write an insurance "policy" that refocuses payoff targets for every X jump in price that would allow you to short sell Bitcoin indefinitely.

[franky1]

There could be a way to provide short selling "insurance" that could benefit all parties. The problem is if the price rises too much and you short sell you could lose a ton of money. You could write an insurance "policy" that refocuses payoff targets for every X jump in price that would allow you to short sell Bitcoin indefinitely.

short selling would involve the insurance company hoarding customers actual 'protected' coins. to be able to short them in the background for profit.  rather then promising to buy them under certain conditions.

being a vault for peoples funds and offering them only $500 worse case sounds nasty. most people would prefer to keep their own funds and instead only hand them over if a term is met

hense why i feel a resistance point exchange is more logical than a 'insurance', the end result/goal is similar, but the headaches are less..

[Yuuto]

Hello everyone,

I'm looking for opinions on a concept that I would like to release.

The issue for the majority of potential bitcoin users is the price volatility, which gives them uncertainty investing in the currency.

So what if there was a way to ensure that your investment is safe for a fee per month as an insurance package?

As an example, if a coin is worth $1000 and the user wants to protect it from dropping below $500, they can purchase an insurance package for a low monthly fee that would purchase the bitcoin for $1000 if it dropped below $500.

Is this something that you think would be beneficial to the bitcoin community and to the general risk side of the currency?

I have a platform ready to launch, let me know guys.

It's a great idea but it would be hard to see how you are going to achieve this without having people accusing your a fraud, since you haven't got a reputation anywhere in this forum and people have stole riduculously small amounts before from bitcoin users let alone big amounts.

I would definitely apply for something like that, if it was issued by a proven and trustworthy company/person.

So you are essentially guaranteeing you would buy our coins at $500?