Very few people understand the importance of insurance to bitcoins continued success.
This will become more clear over the next few years.
Discussion
Ok, I’m one of those people. What is the importance?
- True market data about self custody best practices
- Elimination of risk of ruin
- Decentralization of custody for corporations / nation states / ETF’s
- NGU pads insurance premiums
- Potential for sustainable bitcoin on bitcoin yeild
- butcoin insurance co’s function more like a bitcoin bank than standard custody providers
nostr:npub1emdtsxly9m68m00x206t574jttp65vk0c2m89ms038q047yz7ylqcac9aw am I missing anything?
Do you know of any podcasts that go deep on this? I conceptually understand what you mean, but having trouble understanding why insurance would have this big of an impact
Ah sick, thanks!
ELI5
Where can I be pointed in finding basic information related to BTC?
I look forward to seeing how this plays out. Thanks for putting up some money to build this!
Now I'm curious what you are talking about. Because you didn't say insure your Bitcoin stack, it feels like you are referring to Bitcoin as a whole.
absolute
I personally HATE insurance ..
Whenever I've had to make a claim, the insurance company worked overtime to try to find an exclusion so they wouldn't have to pay.
Having said that, I am interested to check out Anchorwatch's insurance against $5 wrench attacks. Not for me, but for the kids.
Insuring Bitcoin? or insurance companies stacking because they have long dated liabilities and Bitcoin is the perfect financial tool for them?
Both
AnchorWatch has my attention. Good leadership is key. I like both founders.
FDIC has been one of the most effective sales pitches ever created in fiat. But it has many warts.
What are the things to watch out for with AnchorWatch & risks a Pleb needs to consider if looking at insuring their stack?
When plebs think about using the service it’s mainly about the trade offs surrounding cost and privacy.
You can’t have private insurance. It’s not possible so your stack is KYC’d etc… and in addition you need to find someway to offset the annual premium cost.
That said you’re getting a guarantee you make it from here to there with your stack intact. Which is huge. I know every Bitcoiner has the risk of ruin in the back of their mind constantly.
The fact that there could be some critical flaw in our self custody set up is the thing that keeps many of us up at night.
With anchorwatch you hold the keys and they hold the risk.
So it’s a game changer in that regard.
I don’t worry about insurance fine print or whatever. Firstly I know the team well obviously and they are the underwriters. Secondly AW has a procedure for how you are to secure the devices etc… and as long as you follow instructions you are safe in a loss event.
Plus on top of all this you have the time lock.
The bitcoin literally can’t be moved during the time lock period.
And then you get the benefit of inheritance planning etc… lots of positives.
The negatives again are mainly cost and privacy.
That’s what I thought.
I don’t care about the KYC thing. I think that no-KYC thinking is going to get a lot of Bitcoiners in a mess down the line.
Cost looks like it will be a major issue for the early going. For normal Plebs. Those will come down in time via growth/success IMO.
Yeah absolutely. It’s been a continuous journey to explain to the insurance guys that bitcoin is far safer than the things they’re used to insuring.
Personally I’m going to be an early adopter and find a way to mitigate the cost by selling covered calls on ibit or something.
From their overview it looked like they custodied the covered coin. Did I read that wrong, or do they have coverage for both approaches?
No it’s self custody insurance
Ah yes. I dug deeper and see that their “custody solution” is a joint key-holding situation. 🤙
If the coins can’t move because of the time-lock, then is the insurance against losing a hardware wallet or private key material? So presumably they tell you to store the device/seed in a bank safety deposit box, and if the bank gets robbed and your stuff is taken, the policy kicks in?
nostr:npub1rtlqca8r6auyaw5n5h3l5422dm4sry5dzfee4696fqe8s6qgudks7djtfs nostr:npub1ng8zqsa04gzk5y4ch0nh43xrrpwqu27ydvf24s2cdzg5gv3upc7qycqjc0 I have a call with the Ledn founder in a bit. What should I ask that’ll cause him to think about where he needs to evolve his features to be better for us?
When will your loans be available to California residents?
That’s likely a California problem. They serve many states and nations that don’t over-govern their populations. Consider a move to a state where you’re not seen as a subject or a toddler.
Ledn is Canadian. Last I checked they don’t offer a lot of services outside Canada.
They serve the US (they only have to exclude about 5 states). I’m going to test them out. My main feedback after going through their UI was for a few things that would make it feel like I had the means to better double check the integrity of funding destinations and general interface elements that would better instill confidence. As to the terms, my main concern is that they are receiving transfer of asset and title to asset and that my collateral would be tied up in any mayhem that befell the company during my loan term. Mauricio said that they have goals in their roadmap to specifically address that issue to limit exposure of customer assets to potential company issues. This would resolve significant concerns that arose after watching BlockFi topple alongside the FTX sham. The rest of their terms and product structure look well thought out and oriented toward fair and sustainable. We’ll see how my toe-in-the-water test goes with them.
My initial look at AnchorWatch is about $5,500/yr per million usd value. The other thing that caught my eye is that to insure it, they custody it. If my take was correct, that’s a deal breaker for me. If they’re incompetent enough to lose it while they custody it, do I want to depend on them to pay out for recovery of my position? Not to mention, not my keys and whatnot. This is an industry that’ll flounder for a while trying to find an approach that fits the need, the tech, and the customer mindset.