Bitcoin Insurance, the start of bitcoin financial products?
After hearing about people losing entire investments of bitcoins from tragic “accidents/incidents”, this product showed up as a solution to the problem. They seem to be issuing insurance policies for sale to the public on the Bitcion Savings and Trust (run by the notorious pirate) investments (if they default which they probably will).
I've seen a few people think of this as a scam, but as stated in this article, there currently is no large scale insurance products for bitcoin securities.
I have also read in bitcoin talk the possible need for insurance.
My question is: If there is a market for insuring bitcoins, wouldn't the insurer need a risk management system that could be applied to the bitcoin markets? Wouldn't it be necessary to utilize some kind of risk rating for the various investments/securities that exist for bitcoins?
Logically a higher risk investment say, the pirate savings and loans (an investment that is most likely to default), would need a higher premium, than say insurance on a transaction between a well established merchant and honest customer, which is where the profitability comes into play.
People obviously need a way to insure their bitcoin based investments even if it's the bitcoins themselves, (say you get robbed but are insured), does that mean there is a market for it?
- #breakingnews In wake of Bitcoin spike, Instawallet halts service and Mt. Gox “eats” DDOS | - [...] there has been some discussion about Bitcoin-based insurance, at present, it does not seem to exist. Perhaps this incident ...