Bitcoin insurance

[jonald_fyookball]

Quite, I've yet to see any evidence that Xapo's insurers are insuring against loss of customer BTC through theft or incompetence on behalf of Xapo.

Is there some reason you don't consider the statements they make on their website to be evidence? From https://xapo.com/#aboutVault

Yes, I would need for Meridian Insurance to put out a statement that they are insuring Xapo against loss of bitcoins under those circumstances. I'd also want to know more about Meridian Insurance.

Unfortunately people lie, so we will never be able to have 100% trust. But that would go some small way.

Good idea...

I hope its true. 

A secure vault insured by a heavy-duty insurance company would be awesome!  Not sure how heavy-duty Meridian is, but sounds like we're on the right track with this kind of offerings.

[altnoob]

Quite, I've yet to see any evidence that Xapo's insurers are insuring against loss of customer BTC through theft or incompetence on behalf of Xapo.

Is there some reason you don't consider the statements they make on their website to be evidence? From https://xapo.com/#aboutVault

Yes, I would need for Meridian Insurance to put out a statement that they are insuring Xapo against loss of bitcoins under those circumstances. I'd also want to know more about Meridian Insurance.

Unfortunately people lie, so we will never be able to have 100% trust. But that would go some small way.

Meridian is basically insuring the vaults inventory whatever that may be, i.e. bitcoins.  They will not specifically insure bitcoins as the price fluctuates so wildly.  Xapo most likely has a coverage limit of $1mm which includes the covered perils of theft.

The problem with this is if they have an average bitcoin vauled at $600 and the price doubles overnight and then their vault gets broken into their coverage limit might not cover all bitcoins at the new price of $1,200.  Everyone would have to take the $600 each and then file a lawsuit.

In order to cover this xapo would need to constantly be purchasing more insurance and passing the additional premiums on to the user, which they say is free.  Not possible unless they are losing money.

On the flip side insurance only covers market value so if you store at $600, the price drops to $30 and the vault gets robbed you only get $30.

Its clear that a legal team did not draft all of this so I am a little skeptical of their ability to pay out.

[IrishFutbol]

Quite, I've yet to see any evidence that Xapo's insurers are insuring against loss of customer BTC through theft or incompetence on behalf of Xapo.

Is there some reason you don't consider the statements they make on their website to be evidence? From https://xapo.com/#aboutVault

In addition, the Vault is fully-insured, backed by Meridian Insurance. The insurance is provided at no charge to Vault users and covers all incidents that are not caused by you. For example, the insurance covers attacks by hackers, theft by a Xapo employee, a break-in at the physical vault location, and our bankruptcy. In this event, any bitcoins you lose will be replaced by Xapo. The only thing you’re not insured against are your own actions or error, for example, if you don’t follow basic security precautions (like picking “internet” for your password) or if you give you password to someone else who then steals your coins.

"Theft by a Xapo employee" is right there in the list.

No charge to users?

Is this just typical "Buy X and we'll throw in Y for free!" BS, or is Xapo planning to make money off of the deposited coins somehow?

[Brangdon]

Xapo charge 0.12% per year for storage. Insurance is included for no extra charge. Their charges and policies are on their website.

[5thStreetResearch]

Quite, I've yet to see any evidence that Xapo's insurers are insuring against loss of customer BTC through theft or incompetence on behalf of Xapo.

Is there some reason you don't consider the statements they make on their website to be evidence? From https://xapo.com/#aboutVault

Yes, I would need for Meridian Insurance to put out a statement that they are insuring Xapo against loss of bitcoins under those circumstances. I'd also want to know more about Meridian Insurance.

Unfortunately people lie, so we will never be able to have 100% trust. But that would go some small way.

why dont you just look at Xapo's backers.  You think Fortress is going to risk their reputation defrauding people out of small amounts of bitcoin?   

[grifferz]

Is there some reason you don't consider the statements they make on their website to be evidence? From https://xapo.com/#aboutVault

Yes, I would need for Meridian Insurance to put out a statement that they are insuring Xapo against loss of bitcoins under those circumstances. I'd also want to know more about Meridian Insurance.

Unfortunately people lie, so we will never be able to have 100% trust. But that would go some small way.

why dont you just look at Xapo's backers.  You think Fortress is going to risk their reputation defrauding people out of small amounts of bitcoin?   

Sure, as long as they are legally covered I think they will do absolutely anything that makes them money.

I am surprised that on the same forum where people repeatedly say things like, "if you don't hold the secret keys for your bitcoins then they're not your bitcoins" other people are encouraging belief in statements made by a company that actually charge you for holding your bitcoins. It seems to me that such a company would demand a whole other level of rigor compared to even a traditional exchange.

Don't get me wrong, I wish them well and have no specific reason to believe they are crooks. I just would not be comfortable relying on that insurance ever paying out when it's needed. I think cryptocurrency is too new for insurance companies to get a handle on the risks, so find it hard to believe that any insurance company is truly doing that now.

[PayWithPins]

If you have the financial backing, why would you need to prove it to anyone?   Please explain

[franky1]

yawn............. bored now

paper wallet is free insurance. anyone using an "insurance company" as a "bank" needs to realise to be an accredited insurer, the bitcoins will only be valued at the value  when signing the policy. meaning insure 1btc today, they would give you back 0.1btc if you lost your coins and the price was $5.6k next year.

secondly, if you withdraw your coins from their vaults. your funds are not insured anymore. so the only way to ensure your fnds is to leave them in THEIR control.

again they can steal 1btc and give you back 0.1 de to proce variance (even mark karpeles knows this.. steal 740k give back 200k)

so the only insurance you need is paper wallets.

the whole idea of bitcoin is to self manage, self protect and self control of your wealth. to not trust third partis that can take what they want and give you only a small percentage back, simply becuase that is what is wrote in their policy.

insurances and third parties storages are banks.. learn what bitcoin is about.

if a corporation cant make a paper wallet (cold store) then it needs to learn bitcoin better.
insurances and third parties storages are banks.. trying to fed off of noob's ignorance

[grifferz]

If you have the financial backing, why would you need to prove it to anyone?   Please explain

Off the top of my head:

• So that more people believe you
• For the same reasons that some exchanges are having external audits done

If you have a look in the Service Discussion forum you will find several massive threads discussing failed and failing services that took people's money and bitcoins.

Many of these services put statements on their websites about how safe, secure and honest they were.

[IrishFutbol]

yawn............. bored now

paper wallet is free insurance. anyone using an "insurance company" as a "bank" needs to realise to be an accredited insurer, the bitcoins will only be valued at the value  when signing the policy. meaning insure 1btc today, they would give you back 0.1btc if you lost your coins and the price was $5.6k next year.

secondly, if you withdraw your coins from their vaults. your funds are not insured anymore. so the only way to ensure your fnds is to leave them in THEIR control.

again they can steal 1btc and give you back 0.1 de to proce variance (even mark karpeles knows this.. steal 740k give back 200k)

so the only insurance you need is paper wallets.

the whole idea of bitcoin is to self manage, self protect and self control of your wealth. to not trust third partis that can take what they want and give you only a small percentage back, simply becuase that is what is wrote in their policy.

insurances and third parties storages are banks.. learn what bitcoin is about.

if a corporation cant make a paper wallet (cold store) then it needs to learn bitcoin better.
insurances and third parties storages are banks.. trying to fed off of noob's ignorance

Purpose according to who though?

If any crypto currency is going to gain any significant following, it needs to be efficient and simple.  What you're suggesting is horribly inefficient and takes time to understand.

[jonald_fyookball]

For mass adoption, there's definitely a downside to saying
to the average person/noob:  "Yeah, its a new kind of money... sorry, you can't put in a bank,
you have to manage your own security and protect it from hackers".

On the other hand, getting people to adopt a new mentality about taking responsibility
for their own money is perhaps easier than creating reliable trusted vault companies.

..overall, its another facet of bitcoin that will be interesting to see how it unfold

[franky1]

Purpose according to who though?

If any crypto currency is going to gain any significant following, it needs to be efficient and simple (1).  What you're suggesting is horribly inefficient and takes time to understand.(2)

1) getting an insurance policy, transferring funds, knowing the policy ends when you withdraw and needing a new policy for the new amount you want to keep secured (change address)... yea so much faster then making a paper wallet.

2) again insurance and banks are for ignorant noobs

[IrishFutbol]

Purpose according to who though?

If any crypto currency is going to gain any significant following, it needs to be efficient and simple (1).  What you're suggesting is horribly inefficient and takes time to understand.(2)

1) getting an insurance policy, transferring funds, knowing the policy ends when you withdraw and needing a new policy for the new amount you want to keep secured (change address)... yea so much faster then making a paper wallet.

2) again insurance and banks are for ignorant noobs

Paper wallet vs. credit cards...

You can call them noobs.  Most will call them rational.

If BTC is going to go mainstream, a BTC bank would be the best way to go about it.

[snarlpill]

The ideas that this thread is spurring in my head are very intriguing to me. On the one hand, altnoob who has worked in the insurance industry for a while raised a lot of good questions. I think you definitely need to take that into mind OP unless you have informed advisers or at the very least a good lawyer.

On the other hand though, I really don't know how I feel about the idea of people putting their BTC into an insurance companies "vault" (aka a bank). It does kind of seem to go against some of the main principles Bitcoin was founded on in the first place. And like a few people have said- Why would I PAY to put my money into someone else's vault when I could put my own money into an offline paper wallet "vault" for free? That is also a good point. It Would be good for beginners and like someone said- corporations. But to get a large share of bitcoin holders to put their money into an unknown company, I think you would definitely need to offer some sort of perks; interest, ability to hold bitcoin And some Fiat money in the same vault? I don't know...

After the scandalous fall of Mt. Gox and the Bitcoin communities trust being damaged, it could go 2 different ways. 1)- More bitcoin holders get scared/skiddish and sell-off, going back to their "trusted and safe" Fiat money and causing the price of bitcoin to drop. OR 2)- The majority of bitcoin holders know that the future of BTC is very promising and plan on keeping/buying more coins, but now are even more weary of trusting any third parties. Instead of letting it ruin us, we rise up as a whole community and decide to fully support all trustworthy businesses and slowly shut out all the scammers. If Bitcoin truly is the future of this world as many of you have said, there will be even more large corporations and venture capitalists joining the ranks. At that point I could see a few big name insurance companies blossoming (By that point Allstate, State Farm, etc. probably... )

[jonald_fyookball]

Maybe this is the reason more big money hasn't jumped in yet.  Corporations haven't figured out how to store their coins.

[snarlpill]

Agreed ^. I think there is this vast perception in the mainstream media and uninformed public that Bitcoin is for drug smuggling hitmen and there is a Very High danger of hacking and theft present. As you know, this is not accurate at all and only an attempted smear of Bitcoin's reputation and trustworthiness. Most of this smear campaign with sensational anti-BTC headlines is probably intentional unfortunately, probably due to Big Bank and Gov. financial backing. All we can do is either A) Not give a fuck about what the sheeple masses think of us, or B) keep pushing on and prove to the public that BTC is filled with many good people. More stuff like Sean's Outpost and like Doge did- funding a team, in this case the Jamaican bobsled team.  Cooool Runnings, mon.

[franky1]

Purpose according to who though?

If any crypto currency is going to gain any significant following, it needs to be efficient and simple (1).  What you're suggesting is horribly inefficient and takes time to understand.(2)

1) getting an insurance policy, transferring funds, knowing the policy ends when you withdraw and needing a new policy for the new amount you want to keep secured (change address)... yea so much faster then making a paper wallet.

2) again insurance and banks are for ignorant noobs

Paper wallet vs. credit cards...

You can call them noobs.  Most will call them rational.

If BTC is going to go mainstream, a BTC bank would be the best way to go about it.

its kind of good that credit cards got injected into the conversation

credit cards allow people to spend money and protect that spending, and will reimburse people after its been spent.

as i said before apart from only insuring stored coins (a vault/bank concept) how would the OP insure people that actually want to spend/transact their coins with third parties.(a credit card concept)

[newtypeseed]

so smart you are