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Author Topic: Safe deposit box insurance for bitcoin contents?  (Read 1813 times)
unclemantis
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July 08, 2012, 11:48:13 PM
 #1

I just recently got a safe deposit box and I have an encrypted backup of my wallet inside.

Now here is the thing. If I have a savings or checking account with the bank, those funds are covered by FDIC.

Safe deposit boxes are not covered by FDIC. I need to get separate insurance for the contents.

Bitcoin is not like gold or silver. The amount and the value of the bitcoin in the box will change often.

When applying for insurance how would I go about doing this? What would I classify bitcoin as? Would they be like a collectible such as baseball cards?

Thoughts?

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July 09, 2012, 01:55:36 AM
 #2

You might possibly be able to insure physical bitcoins for their bitcoin value, but you definitely won't be able to do the same for a wallet backup, because if the backup is lost, stolen, or destroyed, that does not mean you've lost the bitcoins. After all, you do have backups in several locations, right? Right?

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
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July 09, 2012, 02:06:59 AM
 #3

Right Wink

But physical bitcoins are somewhat limited in function. How can I PROVE that a 10btc C coin is worth 60USD or 80USD?

I see all this talk about storing bitcoin in a safe box, but no one ever talks about INSURING FOR LOSS. Because what IF I have my wallet backed up in say 3 places and what IF all 3 places get hit!? Then what!?

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July 09, 2012, 02:14:38 AM
 #4

I think you are missing what Foxpup is saying.  Your deposit box being destroyed is no guarantee that you lost access to the funds.  It is impossible to prove that you have no backup of the private key and that anything of material value was lost.  No insurance company (none anywhere, ever) is going to write insurance for an event (that the insured was actually lost/destroyed) that they can't prove actually happened.

Quote
I see all this talk about storing bitcoin in a safe box, but no one ever talks about INSURING FOR LOSS. Because what IF I have my wallet backed up in say 3 places and what IF all 3 places get hit!? Then what!?

You lose.  Of course the odds that a personal safe, safety deposit box, and encrypted archive in the cloud all were destroyed simultaneously is so small that if it happened you likely have bigger problems.
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July 09, 2012, 02:18:17 AM
 #5

I think you are missing what Foxpup is saying.  Your deposit box being destroyed is no guarantee that you lost access to the funds.  It is impossible to prove that you have no backup of the private key and that anything of material value was lost.  No insurance company (none anywhere, ever) is going to write insurance for an event (that the insured was actually lost/destroyed) that they can't prove actually happened.

Quote
I see all this talk about storing bitcoin in a safe box, but no one ever talks about INSURING FOR LOSS. Because what IF I have my wallet backed up in say 3 places and what IF all 3 places get hit!? Then what!?

You lose.  Of course the odds that a personal safe, safety deposit box, and encrypted archive in the cloud all were destroyed simultaneously is so small that if it happened you likely have bigger problems.

So skip the idea of getting insurance and just backup the wallet to other locations.

I am just concerned of the weakest link. AKA location that is easiest to steal or hack.

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July 09, 2012, 02:28:16 AM
 #6

I am just concerned of the weakest link. AKA location that is easiest to steal or hack.

Why? As long as we're talking about encrypted wallet backups as opposed to physical bitcoins, there is no "weakest" link, because it doesn't matter in the slightest if only one "link" is broken. All copies of your wallet (both the backups and the original) need to be lost at the same time for you to lose your bitcoins. You don't need insurance, because you already have insurance by backing up in multiple locations.

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
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Gerald Davis


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July 09, 2012, 02:35:28 AM
 #7

Then your best option is a brain wallet.

Alternatively you could use a 2factor approach (passphrase + paper wallet)
Generate a sequence of random numbers that when hashed WITH the passphrase form the private key

i.e.
SHA256(secret phase + key1) = private key #1
SHA256(secret phase + key2) = private key #2

this would require an attacker to both know the passphrase AND have access to the paper containing the list of keys.

If you did something like that I would use a chained key derivitive function like http://en.wikipedia.org/wiki/PBKDF2 with a high round count.  That would provide some resistance against brute force attack.
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July 09, 2012, 02:42:56 AM
 #8

The insurance company would probably need to secure your bitcoins for you if they want 100% certainty you just didnt lie about getting them stolen.

So you would deposit with them and if they went missing you could make a claim. Another company might reinsure this main one because its a third party holding your coins.

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July 09, 2012, 03:00:42 AM
 #9

There are a lot of ways to use a common book for a brain wallet cipher as a storage of your key. There are a lot of ways to do it. You can choose a random phrase and convert it to integers. For instance "bone" is 02 13 14 05 so you might choose to use the second line of the first chapter then count 13 words and write it down. Then the 14th line and count 5 words. Continue this for several more words. You may even choose to start at the end of the chapter and count backwards every other word, or maybe with odd numbers or prime numbers. Come up with your own simple algorithm and use a very very common book that you can get anywhere, anytime.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
unclemantis
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July 09, 2012, 04:33:25 AM
 #10

Then your best option is a brain wallet.

Alternatively you could use a 2factor approach (passphrase + paper wallet)
Generate a sequence of random numbers that when hashed WITH the passphrase form the private key

i.e.
SHA256(secret phase + key1) = private key #1
SHA256(secret phase + key2) = private key #2

this would require an attacker to both know the passphrase AND have access to the paper containing the list of keys.

If you did something like that I would use a chained key derivitive function like http://en.wikipedia.org/wiki/PBKDF2 with a high round count.  That would provide some resistance against brute force attack.

Can I do this with bitaddress.org?

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Gerald Davis


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July 09, 2012, 06:10:35 AM
 #11

It would require some modification.

bitadddress is essentially doing:
private key = rand()

you would want:

private key =sha256(rand()+passphrase)

the rest of the code would remain the same.
unclemantis
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July 09, 2012, 02:36:09 PM
 #12

It would require some modification.

bitadddress is essentially doing:
private key = rand()

you would want:

private key =sha256(rand()+passphrase)

the rest of the code would remain the same.

What do most of the people on the forum use to generate encrypted paper wallets?

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July 11, 2012, 03:41:15 PM
 #13

I just looked at a website for an insurance product that just insures safe deposit box contents. I do not think you tell them anything about what is in the box. just pick the value or amount of coverage and pay the premium. It doesn't seem like it is available everywhere but it might be worth checking out. www.safedepositboxinsurance.com  Smiley
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July 11, 2012, 08:51:44 PM
 #14

I just looked at a website for an insurance product that just insures safe deposit box contents. I do not think you tell them anything about what is in the box. just pick the value or amount of coverage and pay the premium. It doesn't seem like it is available everywhere but it might be worth checking out. www.safedepositboxinsurance.com  Smiley

Not available in Texas Sad

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July 11, 2012, 09:52:51 PM
 #15

You're right. I called the company to find out more about it. I guess since they're new they still have to work on getting coverage in every state. They said they plan to have Texas covered by the end of the year.
unclemantis
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July 11, 2012, 10:46:39 PM
 #16

You're right. I called the company to find out more about it. I guess since they're new they still have to work on getting coverage in every state. They said they plan to have Texas covered by the end of the year.

Perfect timing! LOL

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July 12, 2012, 03:09:21 AM
 #17

OP you must have missed the whole point of bitcoin: to give 100% control back to the people of their money. By putting your wallet/bitcoins in a safety deposit box you have essentially given back that control to the banks.

Suggestion: Use a brainwallet so you can remember a phrase that would decrypt your private key.

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unclemantis
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July 12, 2012, 03:16:41 AM
 #18

OP you must have missed the whole point of bitcoin: to give 100% control back to the people of their money. By putting your wallet/bitcoins in a safety deposit box you have essentially given back that control to the banks.

Suggestion: Use a brainwallet so you can remember a phrase that would decrypt your private key.

What if passphrases clash? As in what if someone else has the same passphrase? Like a sentence out of a book or something.

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July 12, 2012, 04:23:21 AM
 #19

OP you must have missed the whole point of bitcoin: to give 100% control back to the people of their money. By putting your wallet/bitcoins in a safety deposit box you have essentially given back that control to the banks.

Suggestion: Use a brainwallet so you can remember a phrase that would decrypt your private key.

What if passphrases clash? As in what if someone else has the same passphrase? Like a sentence out of a book or something.

Salt
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