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We are working on an insurance product for crypto. :-( The more we dig into it the more scams we find. Everywhere. Wash trading, click baiting, pump and dump,

by jbkiv 5y ago

We are working on an insurance product for crypto. :-( The more we dig into it the more scams we find. Everywhere. Wash trading, click baiting, pump and dump, code is law, etc. You will find the biggest bazaar there is in the crypto world. Biggest than the Nevarro bazaar. The anonymous ecosystem is a paradise for scammers and money launderers. And a terrifying "crypto lord" on Telegram or Twitter may just be your nicest coworker. I am not sure we will ever find a backer. So far we are working on the private risk management side of the venture. I would expect more mainstream users, and they will hammered day one. Look at what is going with NFTs, all the wash trading pushing price ups (source: https://blog.chainalysis.com/reports/2022-crypto-crime-report-preview-nft-wash-trading-money-laundering/ https://blog.chainalysis.com/reports/2022-crypto-crime-repor...)

thelibrarian 5y ago
I think you would have less risk if you were selling life insurance policies to Soviet soldiers in Stalingrad in 1942.
- sofixa 5y ago
  Or even a German or Romanian soldier in Stalingrad in 1943.
- jbkiv 5y ago
  Agree.
beebmam 5y ago
Seeing cryptocurrencies grow so much over the last few years, it seems to me that without governance over cryptocurrency transactions, cryptocurrencies tend to incentivize scams and black market trading, and they tend to function as speculation/gambling schemes. "Shilling" is common among everyone I know that has purchased cryptocurrencies, and many of them have been ruining friendships over it. I used to be more optimistic, but I can't help but see cryptocurrencies as a strong negative on society now. It's pretty wild cryptocurrencies are still legal in many parts of the world.
- jbkiv 5y ago
  Agree. Very hard for regulators (=protect the consumer) to keep up with it. I compare that to the massive fires we have in California, so big that only the rain coming in November saves the bacon.
- sho_hn 5y ago
  It was Charles Stross, I believe, who once described Bitcoin as an enormous social experiment educating hackers on the historical needs for financial regulation.
  - latchkey 5y ago
    Except that "financial regulation" doesn't seem to really stop much of anything in the traditional finance sector. How quickly we forget 2008 and the litany of other failures.
    - sho_hn 5y ago
      Isn't that a whataboutism?
      - latchkey 5y ago
        "the technique or practice of responding to an accusation or difficult question by making a counteraccusation or raising a different issue." I didn't raise a different issue or make an accusation. I do agree that history plays an important part in the future, but the assumption that 'hackers' are not versed in history, seems awkward at best. Never mind that a lot of the people building DeFi and writing the contracts today, have traditional finance backgrounds.
        sho_hn 5y ago
        What I meant is: The crypto space lacking regulation doesn't imply a claim that other currency systems don't also lack regulation in some form, nor that regulation is necessarily effective in either case. Stross didn't say regulation is perfect, he said it arose for a reason. Stross' original statement is about regulation of traditional systems having historic drivers the crypto community had yet to re-discover, in his opinion, either in terms of broad awareness or appreciation. Challenging that would be fine (and interesting); saying "so what if it's bad? this other thing is also bad", though ... FWIW, I think he's both right and wrong. I think there was a subset of the crypto community (and it likely strongly correlates with the productive one) aware of and actively rejecting a lot of history, but also a larger majority swept up in the hype without awareness of that information.
vmception 5y ago
a backer? have you seen the other insurance products in crypto? theyre pretty good and community funded
- jbkiv 5y ago
  Agree, lots of options. Nexus Mtual and others focus on smart contracts on a protocol, rug pulls, and de-pegging risk. Our target: consumers buying and selling NFTs and crypto. As I said when we launch I'll be scared to death 24/7.
  - vmception 5y ago
    Well hope the upside is way better for you to offset that fear
danielvf 5y ago
If anyone wants to see an example of a company that is currently doing well at crypto insurance https://app.nexusmutual.io/cover https://app.nexusmutual.io/cover
- TylerE 5y ago
  Why are they any more trustworthy than your typical crypto company? (i.e. not at all) They don't have a list of board members/investors or a mailing address anywhere that I can find
  - danielvf 5y ago
    From the link on the home page for the "notice of general meeting" for Nexus Mutual Ltd, the directors are: KARP, Hugh DANILA, Ionela Roxana MELBARDIS, Reinis MUNOZ-MCDONALD, Nicolas THURGOOD, Graeme George This matches the company and director information registered in the UK since 2017. Company mailing address is here as well: https://find-and-update.company-information.service.gov.uk/company/10917763/officers https://find-and-update.company-information.service.gov.uk/c...
    - robjan 5y ago
      The office address in that link is just a virtual office.
  - vmception 5y ago
    because you can get claims approved pretty fast after making cheap policies for specific protocols and transactions. consensus on unexpected behavior of a smart contract is pretty quick. the insurance pool is filled by the risk tolerance of people wanted that form of passive income. If it doesn’t function as intended then complain about that and launch a competitor.
    - throwhauser 5y ago
      How many claims have they paid out?
netheril96 5y ago
Why does your insurance have to cover all aspects and all cases? It can be as simple as insuring BTC storage only. No involvement of smart contracts or NFTs.
- not2b 5y ago
  Insurance has to be able to pay out if all the shit hits the fan at the same time (like in 2008) or it is worthless. That takes a hell of a lot of capital.
newbie789 5y ago
8note 5y ago
If you consider Dan Olsen's argument, the scams are built in to ensure that the crypto founders have liquidity to cash out with. You're not going to win trying to fight against what the whole system is designed to do.

by jbkiv 5y ago

thelibrarian 5y ago

I think you would have less risk if you were selling life insurance policies to Soviet soldiers in Stalingrad in 1942.

sofixa 5y ago
Or even a German or Romanian soldier in Stalingrad in 1943.
jbkiv 5y ago
Agree.

beebmam 5y ago

Seeing cryptocurrencies grow so much over the last few years, it seems to me that without governance over cryptocurrency transactions, cryptocurrencies tend to incentivize scams and black market trading, and they tend to function as speculation/gambling schemes. "Shilling" is common among everyone I know that has purchased cryptocurrencies, and many of them have been ruining friendships over it. I used to be more optimistic, but I can't help but see cryptocurrencies as a strong negative on society now. It's pretty wild cryptocurrencies are still legal in many parts of the world.

jbkiv 5y ago
Agree. Very hard for regulators (=protect the consumer) to keep up with it. I compare that to the massive fires we have in California, so big that only the rain coming in November saves the bacon.
sho_hn 5y ago
It was Charles Stross, I believe, who once described Bitcoin as an enormous social experiment educating hackers on the historical needs for financial regulation.
- latchkey 5y ago
  Except that "financial regulation" doesn't seem to really stop much of anything in the traditional finance sector. How quickly we forget 2008 and the litany of other failures.
  - sho_hn 5y ago
    Isn't that a whataboutism?
    - latchkey 5y ago
      "the technique or practice of responding to an accusation or difficult question by making a counteraccusation or raising a different issue." I didn't raise a different issue or make an accusation. I do agree that history plays an important part in the future, but the assumption that 'hackers' are not versed in history, seems awkward at best. Never mind that a lot of the people building DeFi and writing the contracts today, have traditional finance backgrounds.
      - sho_hn 5y ago
        What I meant is: The crypto space lacking regulation doesn't imply a claim that other currency systems don't also lack regulation in some form, nor that regulation is necessarily effective in either case. Stross didn't say regulation is perfect, he said it arose for a reason. Stross' original statement is about regulation of traditional systems having historic drivers the crypto community had yet to re-discover, in his opinion, either in terms of broad awareness or appreciation. Challenging that would be fine (and interesting); saying "so what if it's bad? this other thing is also bad", though ... FWIW, I think he's both right and wrong. I think there was a subset of the crypto community (and it likely strongly correlates with the productive one) aware of and actively rejecting a lot of history, but also a larger majority swept up in the hype without awareness of that information.

vmception 5y ago

a backer? have you seen the other insurance products in crypto? theyre pretty good and community funded

jbkiv 5y ago
Agree, lots of options. Nexus Mtual and others focus on smart contracts on a protocol, rug pulls, and de-pegging risk. Our target: consumers buying and selling NFTs and crypto. As I said when we launch I'll be scared to death 24/7.
- vmception 5y ago
  Well hope the upside is way better for you to offset that fear

danielvf 5y ago

If anyone wants to see an example of a company that is currently doing well at crypto insurance https://app.nexusmutual.io/cover https://app.nexusmutual.io/cover

TylerE 5y ago
Why are they any more trustworthy than your typical crypto company? (i.e. not at all) They don't have a list of board members/investors or a mailing address anywhere that I can find
- danielvf 5y ago
  From the link on the home page for the "notice of general meeting" for Nexus Mutual Ltd, the directors are: KARP, Hugh DANILA, Ionela Roxana MELBARDIS, Reinis MUNOZ-MCDONALD, Nicolas THURGOOD, Graeme George This matches the company and director information registered in the UK since 2017. Company mailing address is here as well: https://find-and-update.company-information.service.gov.uk/company/10917763/officers https://find-and-update.company-information.service.gov.uk/c...
  - robjan 5y ago
    The office address in that link is just a virtual office.
- vmception 5y ago
  because you can get claims approved pretty fast after making cheap policies for specific protocols and transactions. consensus on unexpected behavior of a smart contract is pretty quick. the insurance pool is filled by the risk tolerance of people wanted that form of passive income. If it doesn’t function as intended then complain about that and launch a competitor.
  - throwhauser 5y ago
    How many claims have they paid out?

netheril96 5y ago

Why does your insurance have to cover all aspects and all cases? It can be as simple as insuring BTC storage only. No involvement of smart contracts or NFTs.

not2b 5y ago
Insurance has to be able to pay out if all the shit hits the fan at the same time (like in 2008) or it is worthless. That takes a hell of a lot of capital.

newbie789 5y ago

8note 5y ago

If you consider Dan Olsen's argument, the scams are built in to ensure that the crypto founders have liquidity to cash out with. You're not going to win trying to fight against what the whole system is designed to do.