Bitcoin Insurance – a hot topic among the world of digital currencies as of late and with the rise of trading systems like torque trading systems more and more people are getting into it. We store our money in retail banks because we know that if the bank were to collapse or even get robbed, our money remains safe. However; companies that provide bitcoin wallets along with the bitcoin exchanges, do not have such accommodations. This fundamental quandary is what seems to be holding the non-believers of bitcoin back. But what if there was an FDIC of bitcoin, or rather an insurance policy, even better, what if it was provided by one of those big-name insurance companies whose commercials we see every day on TV? Would that change their minds?
In a tweet fired off just moments ago by Second Market CEO and founder of the Bitcoin Investment Trust Barry Silbert, we now know that such a scenario is not only possible but likely.
While bitcoin insurance has been a hot topic lately, the concept has been in the works for much longer. A whole slew of bitcoin startups has already begun to implement their very own bitcoin insurance policies designed to overcome concerns in relation to the vulnerability in the holding and handling of digital currency.
One of those is Inscrypto, this startup is focused on what it calls “the cure for bitcoin volatility.” Inscrypto’s product, while currently in beta, hopes to become in a sense, the FDIC of bitcoin: “We are like Bitcoin’s privately funded, decentralized version of the FDIC. We help you reduce or completely eliminate the risks of owning Bitcoin.” reads the company’s website.
Moving on to Xapo, this startup has received over $20 million in investments from both Wall Street and Silicon Valley. The company has been touted as the safest place in the world to store your bitcoin. Xapo, based out of Palo Alto stores bitcoin in actual vaults — that you can see and touch, and hard drives that you can feel and hold, once of course you get past the state of the art biometric scanners, armed security personal, and the 24-7 closed-circuit surveillance system. Yes, Xapo is that serious, so much so, that the VC firm backing it, Pantera Capital is currently holding their Bitcoin Fund’s assets there.
On top of the countless insurance startups dedicated to protecting your bitcoin, a new fund is also banking on the adoption of this new industry. Falcon Global Capital, a San Diego-based firm introducing a new fund this month that essentially, offers investors access to retrieve damages should their funds suddenly go missing, as many have in the past. None of this would be possible without the participation of Elliptic the London-based deep cold storage service, which is very similar in nature to Xapo. Elliptic believe in bitcoin so much, that it has vowed to offer complete compensation should any amount of bitcoin in their cold storage vaults go missing or come up stolen.
As if that is not satisfying enough, Elliptic’s vaults are insured by Lloyd’s of London. Falcon co-founder Brett Strapper finds that if Falcon, along with Elliptic, can protect assets of both themselves and their customers that it will be mutually beneficial:
“We offer simplicity, security, and transparency,” he said ”We feel if we can take care of these three things it will be beneficial for our company as well as investors getting into bitcoin.”
Elliptic further emphasizes the importance of providing transparency, along with security in a statement released by the company:
“Recent events have highlighted the need for proper, accountable storage for people’s Bitcoin holdings—something that Elliptic has always understood to be important. Without transparent, full-reserve storage, or the peace of mind that comes from insurance protection, people are always taking a risk when leaving their funds in third-party hands. Elliptic wishes to underline the fact that it provides both transparency and insurance-backing to customers of our Vault service.”
While there is no longer a shortage of mechanisms to secure your bitcoin, the possibility of big insurance companies moving into the industry could have a dramatic impact on the widespread adoption of digital currencies in a positive way. In a recent interview, Barry Silbert told CoinDesk that of the institutional investors he met with over last week’s Barclays Emerging Payments Forum, that 21% of them remained skeptical. With the backing of big familiar insurance names, it seems rather obvious that the sheer skepticism currently plaguing the industry would only wither with time.