Can crypto Insurance be a next big thing?

[senne]

Crypto crime rate has increased significantly. An article in Cointelegraph stated that criminals have stolen around $4.5B worth of digital currency in the first half of 2019 alone.^[1]
"The growth in popularity of cryptocurrencies has, in many ways, outpaced the infrastructure built to support it." ^[2]
Exchanges which control most of the trading volume and also act as a storage place for cryptocurrency have become an easy target of hackers. So, could insurance be a promising sector in cryptocurrency or there are drawbacks to it? What could be the challenges for both the insurer and the insured?

^[1]https://cointelegraph.com/news/cyber-criminals-netted-43b-from-crypto-related-crime-in-2019-study
^[2]https://cointelegraph.com/news/crypto-insurance-a-promising-sector-despite-caution-of-major-players

[1715049171]

1715049171

[dothebeats]

The insurer is, at most at risk here, given the vulnerabilities of some systems and the lack of sense of security some individuals have. For sure this will be a hit to the insured knowing that their assets would be covered should there be some unforeseen circumstances happening to it, but the insurer would definitely be one-step ahead and be excluding things like theft and hacks on the list of the things they can consider to apply for a claim. If the insurer does such a thing, I don't think a lot of people would be applying to it, though it's the best thing they can do in order to not get bankrupt within the first year of operation knowing how rampant hacks and theft is in this scene.

[teosanru]

Crypto crime rate has increased significantly. An article in Cointelegraph stated that criminals have stolen around $4.5B worth of digital currency in the first half of 2019 alone.^[1]
"The growth in popularity of cryptocurrencies has, in many ways, outpaced the infrastructure built to support it." ^[2]
Exchanges which control most of the trading volume and also act as a storage place for cryptocurrency have become an easy target of hackers. So, could insurance be a promising sector in cryptocurrency or there are drawbacks to it? What could be the challenges for both the insurer and the insured?

^[1]https://cointelegraph.com/news/cyber-criminals-netted-43b-from-crypto-related-crime-in-2019-study
^[2]https://cointelegraph.com/news/crypto-insurance-a-promising-sector-despite-caution-of-major-players

Oh yes definitely. Just like any other sector Cryptocurrencies too are
e prone to various types of threats such as theft and lost private keys risk. Moreover the advent of hacking is such that not only exchanges get their funds hacked but also face some consequential losses due to it. Last project i saw related to insurance on blockchain was insurepal but I am not quite sure they are working on it anymore just like any other scam ico. But it would be interesting to see how insurance companies try to indemnify the insureds as the chances of the criminals getting caught here is negligible. Moreover as it is an unregulated sector chances of losses are much higher. So premiums would definitely be pretty higher too.

[avikz]

Crypto insurance can be a promising business area but the volume wouldn't be very significant considering many major economies have not yet legalized bitcoin and crypto businesses. Because this is one business which is not bound to any boundary.

We still have a lot of confusion in legal structures which makes this particular sector somewhat difficult to follow!

It will definitely become a big thing if all major economies decide to come together and follow one unfied set of operating rules which would cover the boundary less operations of crypto exchanges. Otherwise, it will just be a small and sectoral business opportunity.

[Nadziratel]

Crypto crime rate has increased significantly. An article in Cointelegraph stated that criminals have stolen around $4.5B worth of digital currency in the first half of 2019 alone.^[1]
"The growth in popularity of cryptocurrencies has, in many ways, outpaced the infrastructure built to support it." ^[2]
Exchanges which control most of the trading volume and also act as a storage place for cryptocurrency have become an easy target of hackers. So, could insurance be a promising sector in cryptocurrency or there are drawbacks to it? What could be the challenges for both the insurer and the insured?

^[1]https://cointelegraph.com/news/cyber-criminals-netted-43b-from-crypto-related-crime-in-2019-study
^[2]https://cointelegraph.com/news/crypto-insurance-a-promising-sector-despite-caution-of-major-players

What do you mean by Insurance? I don't think this is possible if you call for personal crypto wallets. If this happens, decentralization is over. But if you mean exchanges, many exchanges have already worked on this.

[gentlemand]

If we assume the definition of insurance is - I am paid out for my fuckup - the answer is never.

For personal coverage we all know how crap most people are with online security. The only sensible insurance policy would never pay out because your coverage would only cover total impregnability.

I also hope we never find out how effective some of the policies are that certain exchanges claim to have for their own funds.

[ScamViruS]

I don't think insurance is possible in CryptoCurrency. It's hard to say how public careless with online security . I saw someone lost BTC100 btc of greed for 10 Bch! So how does insurance help here?
If the exchanges are covered by insurance then it will be good.

[Tipstar]

I have read about Chinese government using blockchain for storing and providing insurance and health records.
 As we generally define crypto as a valued token crypto and blockchain may be considered different things. But these crypto tokens could also be used along with blockchain on other fields without carrying any value.

Here's an article about Baidu's Xuperchain
https://www.ledgerinsights.com/health-blockchain-baidu-medical/

[ChrisPop]

Well, if I were an insurer I would set up the conditions on how the insured should deposit his cryptocurrencies. If they don't take the security measures we agree upon through a contract then our agreement becomes null and he won't get a dime. I would blend the insurance business with the consulting part and create an all-in-one crypto assets management service. Nowadays there are threats all over the internet from entering a website using a phishing link to using an unsecured internet connection. So tight security measures are a must.

[kryptqnick]

Thanks for starting this topic! I've been thinking about it for a while now, and I've been writing about it on this forum multiple times. I think that crypto insurance will be the next big thing indeed because it's an unexplored market and something very profitable and attractive both for users and for insurance companies. I am actually even looking to invest in such a company, but I haven't seen anything looking promising so far. I am waiting for a relatively big player in this niche to appear, and then I'd buy some stock. I don't have much money I can afford to lose, though, so I wouldn't invest a lot, but I would really like to be able to invest something in such a company.

[XCANA]

I don't think insurance is possible in CryptoCurrency. It's hard to say how public careless with online security . I saw someone lost BTC100 btc of greed for 10 Bch! So how does insurance help here?
If the exchanges are covered by insurance then it will be good.

I can't really see your logic at work here because, the said player played out of greed and not insured his fund. Public carelessness shouldn't be the responsibility of the insurance  company. The only significant stand should be on the part of the insurance company, if they neglect their responsibility of protecting funds under their custody.
This will possibly help the cryptocurrency industry with a new phase of life and, potential investors maybe welcome.

[boltz]

Well could be if its well structured and has a good policy for refunds. Also in my opinion doing insurance in crypto right now is a bad decision because there are a lot of speculators waiting for something like this. Also don't think what you will be paid for your mistakes because that won't happened.

Usually insurance always win but with crypto will be way different so lets wait to see how Crypto Insurances will evolve in time and maybe we can trust them in order to extra secure our funds.

[fiulpro]

I don't think insurance can be a big thing for cryptocurrencies personally because the company cannot predict what can happen and what can't .. we see 100% loss instantly , it's not something that can be defined by any policy ;the risk factor is too high therefore am not really sure why would a company provide insurance for this ...
Who knows.. ?

[uray]

Exchanges which control most of the trading volume and also act as a storage place for cryptocurrency have become an easy target of hackers. So, could insurance be a promising sector in cryptocurrency or there are drawbacks to it? What could be the challenges for both the insurer and the insured?

If there is a real threat with hackers targeting the exchanges and no one is able to take care of the security then which insurance company will come forward to risk that much, Insurance companies will not come forward if there is a high risk involved and billions are lost because of hackers in the market and no company will accept these high risk business. Regulators must keep a security deposit on the amount of trade volume and if that happens then we might not see exchange hacks in the future .

[erikalui]

Exchanges don't have a long life so definitely the insurer would suffer huge loses as they won't be getting enough premium to even cover the damages caused by hacks and plus proving it is not an inside job is tough where crypto is concerned. I read about insurance companies charging 5% as premium and insuring upto $250000 but if the exchange gets hacked before 10 years, these companies will be in severe loss and exchanges are always at high risk. Insurance is good to have but when exchanges make sure they maintain high security and cannot be hacked easily while even a big exchange like Binance cannot claim they are secure while having a hot wallet.

[gabbie2010]

Crypto crime rate has increased significantly. An article in Cointelegraph stated that criminals have stolen around $4.5B worth of digital currency in the first half of 2019 alone.^[1]
"The growth in popularity of cryptocurrencies has, in many ways, outpaced the infrastructure built to support it." ^[2]
Exchanges which control most of the trading volume and also act as a storage place for cryptocurrency have become an easy target of hackers. So, could insurance be a promising sector in cryptocurrency or there are drawbacks to it? What could be the challenges for both the insurer and the insured?

^[1]https://cointelegraph.com/news/cyber-criminals-netted-43b-from-crypto-related-crime-in-2019-study
^[2]https://cointelegraph.com/news/crypto-insurance-a-promising-sector-despite-caution-of-major-players

The chances of survival of such crypto insurance will not be guaranteed due to the high risk involved in crypto system, so many hacking and stealing millions of bitcoin lately while any organization that will take the bull by the horn and embark on such an adventure be in for a very difficult task while the insured will not border about spending millions of dollars to fortify their security systems after-all insurance had covered any stealing while the insurer is in for a very difficult challenge in an event of stealing or hacking of the insured.

[ILuckyGuyI]

Unfortunately, huge amounts of digital money has been stolen until now. Some measures must be taken and I think 'crypto insurance' could be one of them. By means of 'crypto insurance', people won't be a victim of these actions.

[squatter]

The insurer is, at most at risk here, given the vulnerabilities of some systems and the lack of sense of security some individuals have.

Any risk is justifiable if the premiums are high enough. Any prospective policyholder's system would also be thoroughly vetted by the underwriters. I believe that insurers will dip their toes in the water by further pooling the risk. For example, Coinbase's current policy for its hot wallet storage has multiple underwriters.

Regular people like you and me would never qualify for insurance like this. It's for large scale custodians or extremely high net-worth individuals who can afford the extremely high premiums.

[minersday]

Crypto crime rate has increased significantly. An article in Cointelegraph stated that criminals have stolen around $4.5B worth of digital currency in the first half of 2019 alone.^[1]
"The growth in popularity of cryptocurrencies has, in many ways, outpaced the infrastructure built to support it." ^[2]
Exchanges which control most of the trading volume and also act as a storage place for cryptocurrency have become an easy target of hackers. So, could insurance be a promising sector in cryptocurrency or there are drawbacks to it? What could be the challenges for both the insurer and the insured?

^[1]https://cointelegraph.com/news/cyber-criminals-netted-43b-from-crypto-related-crime-in-2019-study
^[2]https://cointelegraph.com/news/crypto-insurance-a-promising-sector-despite-caution-of-major-players

looking at the current state of the crypto space, crypto insurance can not really make any significant change or reduce crypto crime. It will be very difficult for an insurance project or platform to restore stolen cryptocurrencies. most of these situation  involve huge amount of funds being stolen and restore or repaying back such funds is not gonna be easy. The best thing that can be done to reduce crypto crime is an improvement of the security nature of exchange platforms and crypto wallet..

[YuginKadoya]

If the legality of Bitcoin and other cryptocurrency has been established maybe it can be a big thing but as of right now the possibility is still hanging, If fiat currency had made it and it becomes possible on that why not with Cryptocurrency as well, The question is who gonna establish this a whale can certainly make his own insurance company but the legality of cryptocurrency is not yet passed, but for me I think this is great as you can sure be insured with cryptocurrency and establishing this in the near future it can be a backbone for certain opportunity, but can it become possible in the future?