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Author Topic: Bitcoin Insurance  (Read 1149 times)
BitcoinCyberStore.com
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July 28, 2011, 05:03:56 PM
 #1

Pretend for a moment that you had a significant holding in Bitcoin and were interested in holding on to them for a period of one year.

What value would you place on never having to worry about losing your BTC to any circumstance (malware, theft, your own incompetence, forgetfulness, natural disaster, literally - you name it)

How much would that comfort and confidence be worth to you over a year's time if you held:

  • less than 500BTC
  • 501-1000 BTC
  • 1000-10000 BTC
  • 10000+

For the purposes of this exercise, pretend you had each of those amounts in BTC and that is was indeed possible to guarantee with 100% certainty you would retain your BTC of the year's period. I don't want to know anyone's BTC holding so please try and answer all 4 levels of BTC holding and what you think would be a fair rate for each.


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k98kurz
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July 28, 2011, 05:16:03 PM
 #2

I think that the premium should be a percentage, and that the premium should be about 3-5%, depending greatly on circumstances of the customer. This would apply to all tiers. For example: if I wanted to insure 5 BTC, I would pay 0.25 BTC per year; if I wanted to insure 5000 BTC, I would pay 250 BTC.
You will probably run into problems with being able to ascertain whether or not the client is telling the truth when he/she reports a theft/loss.
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July 28, 2011, 06:35:12 PM
 #3

Perhaps you as the insuring party will need act as the client's personal bank account, monitoring all access and transactions in order to properly ascertain legitimate use.
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July 28, 2011, 06:41:09 PM
 #4

How much Liberty shall be sacrificed for this 'Insurance' ?

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BitcoinCyberStore.com
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July 28, 2011, 07:23:39 PM
 #5

How much Liberty shall be sacrificed for this 'Insurance' ?

I'm not a liberty to discuss the risks of this service to me until a Terms of Service is fully developed. I've worded the OP to specifically guide you away from considering the how/whats/whys/when of this plan. I have a schedule of risks and costs that I'm working from. What I don't know is how much something like this is generally worth. From that information though, I can judge it if will be equitable to pursue establishing this kind of service.

But seriously, I'd really like you to consider the fantasy that, from your perspective, no Bitcoins would ever be lost. What would it be worth on a yearly term?

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Crystal Excursion
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July 28, 2011, 07:40:55 PM
 #6

This is from the Wikiquote on Ben Franklin... "They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety."
This was written by Franklin, with quotation marks but almost certainly his original thought, sometime shortly before February 17, 1775 as part of his notes for a proposition at the Pennsylvania Assembly, as published in Memoirs of the life and writings of Benjamin Franklin (1818).

To me yes it's a Fantasy... and a Faustian bargain at that.

It has no worth, Its a liability.  (-)

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BillX
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July 28, 2011, 07:47:58 PM
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How much Liberty shall be sacrificed for this 'Insurance' ?

I'm not a liberty to discuss the risks of this service to me until a Terms of Service is fully developed. I've worded the OP to specifically guide you away from considering the how/whats/whys/when of this plan. I have a schedule of risks and costs that I'm working from. What I don't know is how much something like this is generally worth. From that information though, I can judge it if will be equitable to pursue establishing this kind of service.

But seriously, I'd really like you to consider the fantasy that, from your perspective, no Bitcoins would ever be lost. What would it be worth on a yearly term?
Call Lloyds of London. They will insure anything.

http://www.lloyds.com/
Max Stirner
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July 28, 2011, 08:37:18 PM
 #8

I dont buy the attack on safety. Safety is valuable, just because
you live in a state where you do not pay the police directly for providing you with
safety, your view on safety is blurred. In a state society the state has the monopoly on
safety, so the old argument of Benjamin Franklin just counts for state societies.
Franklin gave people the advice to prefer the lack of safety to being a slave of the
state apparatus. But generally speaking, In a society under the division of labour providing safety is just another business or specialisation. How much safety you
personally prefer and how much of your wealth you will spend on safety is your
personal preference.
Anarcho capitalist Hans Hoppe has pointed out, how insurance companies
could function as a replacement for state law in a private law society.

http://www.youtube.com/watch?v=pzglDS88u50&feature=player_embedded#at=54
wareen
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July 28, 2011, 09:08:08 PM
 #9

To store Bitcoins with near perfect security you have to create a private key on some clean offline system, encrypt it strongly and distribute that encrypted copy over multiple long-term storage locations, print it, deposit USB keys with it etc.
The risk to lose your Bitcoins after you have done that is very near to zero (at least it is probably lower than the risk that any Bitcoin-insurance company goes out of business and cannot longer fulfill its obligations).

Bitcoins are different from other assets because there are no real running expenses with keeping them safe (eg. no secure physical storage space is needed). So I'd say that you can probably charge a one-time fee in the order of 1-2% but only a very minimal annual fee - maybe around 0.1%.

With Bitcoins, the risk of losing them does not really increase over time once they are stored securely so that should be reflected in your rates.

Of course, if your service would not only keep your Bitcoins secure but also available at all times (ie. you can actually use them to make payments all the time) you can probably charge higher fees.
giantdragon
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July 28, 2011, 09:27:44 PM
 #10

I think such insurance is need only for beginners, professional users can easily secure their wallet. Using TrueCrypt is not difficult.

Crystal Excursion
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July 28, 2011, 09:28:35 PM
 #11

I'm still not interested in any dis-service that guarantees a loss. Perhaps You pay me to keep my own safe ? now that would be worth something... but in whose fantasy ?

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bitprotection
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July 28, 2011, 09:33:45 PM
 #12

Check out http://www.bitprotection.info  if your are talking about coverage of your wallet.dat  Smiley

Working on protecting the community!
indio007
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July 28, 2011, 09:36:13 PM
 #13


Anarcho capitalist Hans Hoppe has pointed out, how insurance companies
could function as a replacement for state law in a private law society.

http://www.youtube.com/watch?v=pzglDS88u50&feature=player_embedded#at=54


The state in it's current form is nothing but a limited liability insurance scheme. The strict liability of common law has been abandoned for statutory and other conditional limits. It's hidden well from the populace.
The state is just forced placed insurance provided at the end of the barrel of a gun.

In regards to the topic, i don't think anyone's wallet needs to be insured. Avoiding single point of failure scenerios is the all the insurance anyone needs in that case.
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