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Author Topic: Bitcoin insurance company.  (Read 2151 times)
Anonymous
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August 03, 2010, 12:38:58 PM
 #1

I dont know how a bitcoin bank would work but a bitcoin insurance company might be something to pursue.The idea is that premiums are worked out based on the risk of losing wallets and the rate of fraud with paypal chargebacks and other calamities that could cause a loss of your wealth.You would pay a premium each month and cover a set rate of any losses you suffer.

Would you pay an insurance premium for such a service with bitcoins and what measures would the insurance company need to take to protect its members from fraudulent claims ?
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kiba
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August 03, 2010, 01:02:40 PM
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Would you pay an insurance premium for such a service with bitcoins and what measures would the insurance company need to take to protect its members from fraudulent claims ?

If I have sufficient cash flow and the risk warrant such insurance, I might try. BTW, shouldn't this be in the marketplace section?

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August 03, 2010, 01:11:42 PM
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If my wallet would be big enough I would take the insurance if it existed and only costed a small percentages of what I have.

The only problem is, how would the insurance company verify if you indeed lose your wallet?
How could they see if the amount you take the insurance for is really the amount you own?

I could take an insurance for 100.000BTC and than claim I lost my wallet.
How would you verify that this is true and not that I had only 50BTC at the moment I lost my wallet, or that I even lost it.

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Anonymous
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August 03, 2010, 01:20:48 PM
 #4

Would you pay an insurance premium for such a service with bitcoins and what measures would the insurance company need to take to protect its members from fraudulent claims ?

If I have sufficient cash flow and the risk warrant such insurance, I might try. BTW, shouldn't this be in the marketplace section?

Its not an actual business proposal.More of a discussion about the possibilities.The mods can move it if they like.
Anonymous
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August 03, 2010, 01:24:51 PM
 #5

If my wallet would be big enough I would take the insurance if it existed and only costed a small percentages of what I have.

The only problem is, how would the insurance company verify if you indeed lose your wallet?
How could they see if the amount you take the insurance for is really the amount you own?

I could take an insurance for 100.000BTC and than claim I lost my wallet.
How would you verify that this is true and not that I had only 50BTC at the moment I lost my wallet, or that I even lost it.

I imagine a copy of your wallet would be stored in their vault and would therefore lessen your premium....




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August 03, 2010, 02:27:30 PM
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If my wallet would be big enough I would take the insurance if it existed and only costed a small percentages of what I have.

The only problem is, how would the insurance company verify if you indeed lose your wallet?
How could they see if the amount you take the insurance for is really the amount you own?

I could take an insurance for 100.000BTC and than claim I lost my wallet.
How would you verify that this is true and not that I had only 50BTC at the moment I lost my wallet, or that I even lost it.

I imagine a copy of your wallet would be stored in their vault and would therefore lessen your premium....

That would be, in effect, no different than gold storage fees.  Cheaper, sure, but ultimately, you would be paying to maintain their infrastructure for off-site backup of your wallet.  That would be the cheapest service.  It would also be the least secure.  So, a real insurance plan like you originally suggested would be a premium on your ability to maintain your own wallet.  Those premiums would be higher but more secure/anonymous.

Ta,
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August 03, 2010, 03:48:48 PM
 #7

In theory everyone knows the balance on every account and it is easy to verify "who owns an account" by having someone send you 0.01BTC from said account.

If said coins are "lost for ever" and an insurance payout is made and then those coins "start circulating again" you know there has been a fraud.   So as long as the insurance company knows the "real world identity" of the addresses being insured, then they can prosecute for fraud.

I suppose all that is really necessary is to "upload and encrypted wallet" to a 3rd party.  As long as you do not forget your password your "wallet" is safe.

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kiba
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August 03, 2010, 04:29:36 PM
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In theory everyone knows the balance on every account and it is easy to verify "who owns an account" by having someone send you 0.01BTC from said account.

If said coins are "lost for ever" and an insurance payout is made and then those coins "start circulating again" you know there has been a fraud.   So as long as the insurance company knows the "real world identity" of the addresses being insured, then they can prosecute for fraud.

I suppose all that is really necessary is to "upload and encrypted wallet" to a 3rd party.  As long as you do not forget your password your "wallet" is safe.

It is impossible to persecute the person for fraud the usual way. So I guess one way is to tie it to your reputation somehow.

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August 04, 2010, 02:45:26 PM
 #9

Quote
In theory everyone knows the balance on every account and it is easy to verify "who owns an account" by having someone send you 0.01BTC from said account.
I doubt. Where did you see that everyone knows the balance of every account? Where did you see that recipient knows which 'account' money were received from? I think Bitcoin is much more anonymous than you think.

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August 04, 2010, 03:02:20 PM
 #10

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In theory everyone knows the balance on every account and it is easy to verify "who owns an account" by having someone send you 0.01BTC from said account.
I doubt. Where did you see that everyone knows the balance of every account? Where did you see that recipient knows which 'account' money were received from? I think Bitcoin is much more anonymous than you think.
This information is in the transaction record stored in the block chain.
It is not currently visible in the client frontend.
I think Bitcoin is much less anonymous than YOU think.
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August 12, 2010, 12:44:24 PM
 #11

I suppose by "accounts" you mean ECDSA public keys. While it's easy to verify any particular "account", an actively paying person will own hundreds of "accounts" and tracking one particular account will not disclose the rest. Moreover, the information you get by tracking a particular account will be useless after a few transactions.

Let's say I generated 50 bitcoins. I generated them by generating a ECDCA keypair (ADDR1), signing a transaction of 50 bitcoins with it and signing the resulting block with SHA256-based proof of work.

If then I send 0.01 BTC to you, Bitcoin puts a composite transaction: I generate a new address ADDR2 and send 49.99 BTC to it, and 0.01 is sent to you. So you will know that I own 2 keypairs.

But ADDR1 balance is zero, so it will never be used again, and the fact you know ADDR1 gives you nothing. So you only know that I own ADDR2.

Then ADDR2 sends 20.99 BTC to ADDR3 and 19.00 to ADDR4. You cannot know if I paid 20.99 or 19.00, so either address can be my own. I can even perform a transaction to myself, so both ADDR2 and ADDR3 will be mine.

So after 1 transaction you are not sure if I own 49.99, 20.99 or 19.00 BTC. And with every further transaction involving these addresses you will know less and less about me. 

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