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> But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins Nothing could stop you from opening

> But also because crypto is totally unregulated -- and by the rules of the game, if you have the keys, you have the coins Nothing could stop you from opening a business that would offer insurance in case of key theft. Most banks offer around $100k (depends on the country) in case they go bankrupt or robbed which is very little if you have life time savings in them that are way more than $100k. Big banks have an advantage though in that if they ever go bankrupt they tend to be bailed out by the government which is hard to replicate as a business (you still end up paying for it through inflation so you don't technically get your money back when your bank goes bankrupt as the total value of your money goes down).

gota 7y ago
> Nothing could stop you from opening a business that would offer insurance in case of key theft. I don't think insurance models work for this. How can the insurance company verify that the key wasn't stupid simple? It seems very hard to determine prices and premiums if can't assess the 'risk' - knowing that all 'risk' comes from the potential of user-error and nothing else Also, there's the issue that in our financial system its very difficult for the common person to transfer all of their money to another account they own and call it theft. If I'm not mistaken that is a possibility with every single cryptocurrency, right?
- couchand 7y ago
  I would expect that to get a reasonable premium, you would have to agree to follow certain best practices that would reduce the risk profile. Implementation would of course be hard.
  - patrickaljord 7y ago
    You could be forced to use something like coinbase where they store your private keys. Actually coinbase already provides some kind of insurance in case they get hacked.
Ensorceled 7y ago
> Nothing could stop you from opening a business that would offer insurance in case of key theft. There is no way to prove a key was stolen and no way to prove the theft was not a fraud. Insurance is backed up with jail time for insurance fraud and is STILL rife with fraud (especially automotive insurance). Blockchain theft insurance is not a business that would survive long.
- couchand 7y ago
  One aspect that would be interesting is: I would expect that after an insurance payout the stolen coin would be legally the property of the insurance company. The stolen coin would accumulate on the books of the insurance company, which could then pay a premium to a recovery agency to get it back. Of course the anonymity factor would make it all difficult, but on the other hand you can't ever truly abscond with the cash. If they could trace the movement through the ledger to a legitimate business entity that respects the same country's laws, they might be partially recoverable. At a small scale it would be a waste of time, but on a large enough scale it might work.
- patrickaljord 7y ago
  > Blockchain theft insurance is not a business that would survive long. Why not? If they only garanty $100k and everytime you lose your key you get to pay more like car insurance. Making it more expensive to fraud with time. Not to mention all the fraud detection mechanisms that could be put in place and jail time could still apply if you're caught frauding.

gota 7y ago

> Nothing could stop you from opening a business that would offer insurance in case of key theft. I don't think insurance models work for this. How can the insurance company verify that the key wasn't stupid simple? It seems very hard to determine prices and premiums if can't assess the 'risk' - knowing that all 'risk' comes from the potential of user-error and nothing else Also, there's the issue that in our financial system its very difficult for the common person to transfer all of their money to another account they own and call it theft. If I'm not mistaken that is a possibility with every single cryptocurrency, right?

couchand 7y ago
I would expect that to get a reasonable premium, you would have to agree to follow certain best practices that would reduce the risk profile. Implementation would of course be hard.
- patrickaljord 7y ago
  You could be forced to use something like coinbase where they store your private keys. Actually coinbase already provides some kind of insurance in case they get hacked.

Ensorceled 7y ago

> Nothing could stop you from opening a business that would offer insurance in case of key theft. There is no way to prove a key was stolen and no way to prove the theft was not a fraud. Insurance is backed up with jail time for insurance fraud and is STILL rife with fraud (especially automotive insurance). Blockchain theft insurance is not a business that would survive long.

couchand 7y ago
One aspect that would be interesting is: I would expect that after an insurance payout the stolen coin would be legally the property of the insurance company. The stolen coin would accumulate on the books of the insurance company, which could then pay a premium to a recovery agency to get it back. Of course the anonymity factor would make it all difficult, but on the other hand you can't ever truly abscond with the cash. If they could trace the movement through the ledger to a legitimate business entity that respects the same country's laws, they might be partially recoverable. At a small scale it would be a waste of time, but on a large enough scale it might work.
patrickaljord 7y ago
> Blockchain theft insurance is not a business that would survive long. Why not? If they only garanty $100k and everytime you lose your key you get to pay more like car insurance. Making it more expensive to fraud with time. Not to mention all the fraud detection mechanisms that could be put in place and jail time could still apply if you're caught frauding.