>No insurer is going to sign on for that sort of risk at any price. One already has: http://www.bbc.com/news/technology-25680016 http://www.bbc.com/news/techno

>No insurer is going to sign on for that sort of risk at any price. One already has: http://www.bbc.com/news/technology-25680016 http://www.bbc.com/news/technology-25680016 But I'm not suggesting getting insurance from insurance companies. I'm suggesting that every bitcoin bank should set aside some small share of its revenues to fund the industry's own deposit insurance scheme. That's how deposit insurance works in many countries. If the losses exceed the fund's resources then it's too bad for the depositors. Insuring bitcoin banks (or rather storage companies) is not actually that problematic because losses at different banks are uncorrelated. That's a much simpler situation than insuring regular banks, which have loan loss risks that are strongly correlated. Recession -> unemployment and bankruptcies -> non performing loans at many banks at the same time. You are right that regular banks cannot lose everything in a single event. But that's not true for many other types of insured assets. Fire insurance being one example. As long as there are many insured and the losses are not strongly correlated it's not a problem for insurers.