Coinbase and Circle are not really "insured". If your account gets hacked, they don't give you a penny:
Check my thread about it and the comments inside:
https://bitcointalksearch.org/topic/m.10517604
Topic: Can Bitcoin insurance ever be a reality? - page 2. (Read 2728 times)
You Bitmixer.io signature posters are always so full of questions! You're always the ones creating new threads. Im sure its genuine curiosity 
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It is genuine curiosity, but I only speak for myself. Did you have anything constructive to add to this discussion or question? Or are you trolling for opportunities to harass?
If you think my questions or threads or posts are trivial, noise, trolling, or a nuisance, please do me a favor and let me know.
I participate in a signature ad campaign because it allows me to 1) make some small money, and 2) become more fully immersed in the bitcoin economy. If my comments ever cross the line from constructive I'd appreciate anyone letting me know so I can make changes. I only want to be a constructive participant.
just to feed the troll: It might just be the chicken and the egg. Being curious led me to signature campaigns and now it is paying off to be curious. But now everytime I post something the question pops up if I am only posting to get my post count for the campaign or it is stil genuine curiousity in the botcoin community. I can assure you for most of the sig campaigners it is the latter, we just found a way to monotize our curiousity.
OT: Isn't is as in the sig of Bittburger a bit backwards to rely on insurance and old behemoths of financial institutions. Putting our trust out of our hands and giving back the power to the ones we took it from by instantiating the Crypto revolution?
The biggest problem in the space is how do you differ bitcoin stolen and lost ?
No. Bitcoin insurance will never come in to existence. It is too complex. Even if some one tries to come up with an insurance, the premium rates will be prohibitive.
I agree with this.
Insurance is very complex staff and in most countries is regulated very strictly by the law and controlled by the government.
As we know, bitcoin is not regulated by the government, or some central entity, so such scenario is not possible.
No. Bitcoin insurance will never come in to existence. It is too complex. Even if some one tries to come up with an insurance, the premium rates will be prohibitive.
Yes, it is a reality. I only use buy, sell, and use wallets on services that claim to be insured.
If I insured your bitcoin, how could I be sure that you didn't rob yourself to collect on the insurance?
This is a big problem and will lead to many people committing this fraud, but remember insurance fraud is also very common in the real world. Many people rob their own houses or lie about the stuff they owned to claim insurance money. It's just something the business has to deal with.
Hmm.. Bitcoin insurance? Sound great but.. Well.. like you say, how can we make sure the person is not cheating? I mean.. Bitcoin was created with anonymous and privacy in mind. So, it is hard to track whether the 'robber' is the person him/her self.
However, if we have a trade insurance.. it will be better.
However, if we have a trade insurance.. it will be better.
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Bitcoin insurance is a reality, circle.com offers insurance.
elliptic VAULT also offers insurance.
elliptic VAULT also offers insurance.
True enough, although circle does fiat side as well so I guess it's not a big problem
Could also add in stripe and square since they both are insured but take bitcoin now
Never heard of elliptic vault but I'll need to check it out (ah did neat https://www.elliptic.co/vault)
Absolutely, insurance is inherently pretty easy to program so btc is a good fit
I still dont get how loans and insurances work. Who's going to stop you from not paying? unless you give them all your credentials before or something so they can trace you.
As an insurance agency you are a legal entity (at least in the USA). Right now most likely companies like Circle and Coinbase have insurance agencies that will back up their bitcoin assets with cash if they get hacked, in which case coinbase/circle will have to purchase bitcoins with that cash in order to give their customers their coins back.
Insurance agencies also have to purchase insurance from the government so that if for any reason the insurance agency goes bankrupt, then the government fills the insurance claims.
If we go to an all bitcoin system we would have to rely on strong insurance companies with proof of reserves for x% of the stuff that they insure. Even then since we couldn't force them to pay out the bitcoins (because we don't have their private keys) then it would just come down to jail time if they don't pay.
I think he means, who would it work with Bitcoin, which has no recourse for mistake or fraud transactions and is largely anonymous. Your explanation is the traditional sense of insurance. Reserves and financial ability aside, how would a company insure unaffiliated or cold wallets? Coinbase is an exception because they own every wallet...no Coinbase customer is provided the private key, so the Coinbase isn't actually providing insurance but rather owning every deposit customers give them and promising to pay it out when it's requested.
Can bitcoin insurance ever become reality?
Yes, rather easily. This is programmable money we're talking about. Anything you can dream up can be coded. 
With insurance and fraud protection we can compete with Visa and MasterCard. Transfer costs will increase accordingly, probably why it costs 2% to use them. The customer will have to pay for any increase in services offered.
Well if its being done, it should be done widely. This would help give peace of mind to potential new users. It would also hopefully deter would-be in house "hackers" since insurance companies are very likely to carry out their own investigations.
You Bitmixer.io signature posters are always so full of questions! You're always the ones creating new threads. Im sure its genuine curiosity
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You can't blame them for it though, it might be helping a fe people
I still dont get how loans and insurances work. Who's going to stop you from not paying? unless you give them all your credentials before or something so they can trace you.
As an insurance agency you are a legal entity (at least in the USA). Right now most likely companies like Circle and Coinbase have insurance agencies that will back up their bitcoin assets with cash if they get hacked, in which case coinbase/circle will have to purchase bitcoins with that cash in order to give their customers their coins back.
Insurance agencies also have to purchase insurance from the government so that if for any reason the insurance agency goes bankrupt, then the government fills the insurance claims.
If we go to an all bitcoin system we would have to rely on strong insurance companies with proof of reserves for x% of the stuff that they insure. Even then since we couldn't force them to pay out the bitcoins (because we don't have their private keys) then it would just come down to jail time if they don't pay.
I still dont get how loans and insurances work. Who's going to stop you from not paying? unless you give them all your credentials before or something so they can trace you.
Bitcoin insurance is a reality, circle.com offers insurance.
elliptic VAULT also offers insurance.
elliptic VAULT also offers insurance.
So is Coinbase http://blog.coinbase.com/post/95927658922/coinbase-is-insured
Great, another one to the list.
Bitcoin insurance is a reality, circle.com offers insurance.
elliptic VAULT also offers insurance.
elliptic VAULT also offers insurance.
So is Coinbase http://blog.coinbase.com/post/95927658922/coinbase-is-insured
I don't see how will it be possible. As the exchanges could just claim to be hacked, by transferring their own coins to one of their own wallet.
And ask for insurance. Now like now, it will be impossible to prove that.
And ask for insurance. Now like now, it will be impossible to prove that.
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