4 ms·

Most of the cost is probably insurance.

• patio11 9y ago
  You functionally can't buy insurance on meaningful amounts of Bitcoin. You can convince an insurance company to write you a standard cyberinsurance policy, but the limits on them are far less than the amount of Bitcoin people want to store, and when you have a more bespoke conversation with an underwriter they will say "No no no HELL no." It is not hard to understand why insurers don't want to write these policies. Bitcoin exchanges die catastrophically in over 20% of exchange-years.
  • DennisP 9y ago
    Coinbase has insurance on their hot wallet funds.
    • EliAndrewC 9y ago
      Last time I checked, their hot wallet had less than 5% of the bitcoins on their books. A catastrophic data break would leave most of their customers without either their bitcoins or any way to be made whole from the loss.
      • DennisP 9y ago
        Right but it's only the hot wallet that has any significant risk. The cold wallets aren't online at all, they're on hardware wallets in geographically distributed safe deposit boxes. Even if someone broke into one and managed to crack the hardware, that'd be just a small portion of their funds.