Lloyd's of London, in cooperation with London-based Elliptic Vault, has become the world's first insurer to underwrite bitcoin storage insurance services. Elliptic Vault hopes to provide clients with comprehensive bitcoin security through this service. The company has developed advanced “deep cold storage” technology to safeguard clients' bitcoins. Deep cold storage technology includes the use of strong encryption and secure physical storage locations.
In the past few weeks, the value of bitcoin has exceeded US$1,020, compared with only £125 three months ago, and many people have accumulated wealth from bitcoin's appreciation. Due to people's own negligence or various criminal acts, accidental losses of bitcoin occur from time to time. For example, in September, James Howells of Wales lost the computer hard drive containing his personal bitcoin wallet file and private key, effectively sending US$6.5 million worth of bitcoins to the graveyard. Other bitcoin holders have also experienced cases in which hackers broke into wallet services and their digital cash stashes disappeared. In early November, Inputs.io was breached by two hackers, and 4,100 bitcoins vanished from users' wallets. Many people are anxious to find a safe place to store their bitcoins.
Tom Robinson, co-founder of Elliptic, said that although the use of advanced encryption technology can keep your bitcoins safe, they may still face the possibility of other losses. “While we use security technology to safeguard clients' bitcoins, we also provide insurance protection against theft and accidental loss, so our clients can feel at ease about security.”
Robinson said, “We know that many people are concerned about the security of their bitcoin storage, and the service we provide can safeguard clients' bitcoins and give them peace of mind.” At present, the service is mainly aimed at clients holding large amounts of bitcoin, with a minimum coverage of £5,000. Robinson said the company will also seek to lower the minimum insurance threshold in the future.
Robinson said that insurance is a conservative industry that exists on relationships, and Elliptic initially found it very difficult to find an insurer able to provide this type of underwriting. “We spent a lot of time getting insurers to understand bitcoin and feel comfortable with it.” Eventually, with CoinDesk vouching for them, they reached a bitcoin insurance partnership with Lloyd's of London.
The service is currently underwritten globally and denominated in pounds sterling. Clients can choose different levels of bitcoin insurance coverage according to their needs. The annual premium rate for bitcoin insurance is 2%, payable month by month at the end of each month.
Source: Coindest 2014-01-09