Is It Possible to Insure Bitcoin Technology?

[knight22]

Will you be able to insure your bitcoin with traditional insurance companies? At least some are starting the conversation.


Is It Possible to Insure Bitcoin Technology?
http://insurancethoughtleadership.com/possible-insure-bitcoin-technology/#sthash.7lxFs06z.dpbs

Once again, the insurance industry is faced with a new risk in the technology space. Once again, the global economy is being transformed with a new way of conducting transactions. Once again, the insurance industry is faced with a dilemma: Do we ignore this new risk or face it head on?

But how do you insure Bitcoins? More specifically, how do you insure the theft of the electronic private keys that are used to access Bitcoins? A smart insurer realizes that such a task is an exercise in both the familiar and the foreign. A private key is, after all, an electronic file. In many ways, the policies and procedures used in the network security space to protect any computer system holding any file are the same as those used to protect an electronic private key file. Equally true is that a good portion of private keys are stored in “cold storage,” meaning that they are not held in a computer that has access to the Internet. Some are actually stored in a bank vault. Storing valuables in a bank vault is also a well-understood risk and insurable. Finally, many companies that would be interested in purchasing Bitcoin theft insurance are themselves technology providers. Insurance for technology companies has existed for some time.

[Possum577]

Technically yes, but it leaves a lot of risk with the insurance company. I think it's possible in a bank style insurance. Coinbase could provide insurance against hacks on their system or fraud against you because they'd be able to track the access to your account.

If you made a claim, lost or stolen, the insurance company could see if you re-routed the coins on your own or not by analyzing your online activity. But if you conducted the fraud from a library or hotel computer they'd have nearly zero way of really researching the issue.

[Somekindabitcoin]

You can't really insure bitcoin. There is Volatility in price, risk of hacks, and possible accidental memory loss resulting in total loss of all your bitcoins.

[NUFCrichard]

You can't really insure bitcoin. There is Volatility in price, risk of hacks, and possible accidental memory loss resulting in total loss of all your bitcoins.

My bank accounts are insured to cover any losses, my home/car/bike etc can all be insure against theft, why can't bitcoin?
As long as you can prove that they were stolen and that you had taken adequate precautions (this is where the insurance companies will screw us!) then it seems completely fair to expect reimbursement through an insurance policy.  I bet the premiums would be high to start with though.

[Somekindabitcoin]

You can't really insure bitcoin. There is Volatility in price, risk of hacks, and possible accidental memory loss resulting in total loss of all your bitcoins.

My bank accounts are insured to cover any losses, my home/car/bike etc can all be insure against theft, why can't bitcoin?
As long as you can prove that they were stolen and that you had taken adequate precautions (this is where the insurance companies will screw us!) then it seems completely fair to expect reimbursement through an insurance policy.  I bet the premiums would be high to start with though.

This is exactly why it's harder. All those things you talked about there are PHYSICAL things. Money itself is physical. Now covering a virtual currency that technically shouldn't have any value wouldn't be possible until they do pass some things in congress that would decrease said variables.

[Amph]

why not, if bitcoin reach a position, where the volatility is almost nullified, you could possible ensure it, steal can be mitigated in the future with new tech, the same for others small problems

[ajaxmoor]

why not, if bitcoin reach a position, where the volatility is almost nullified, you could possible ensure it, steal can be mitigated in the future with new tech, the same for others small problems

Yes it might be possible in the future. But the current price and the volatility happening these days makes it not possible, and the insureance companies would never take the risk themselves. Even in the future if the volatility happens to decrease they will still be taking big risks. Not to forget it is still open to manipulation.