There are lots of reasons to love Bitcoin - lack of fees, anonymity, investment potential and a number of others.
However, those are exactly the same advantages for hackers to love this crypto currency as well, – and of course, once a Bitcoin has been succesfully
pinched, it’s almost impossible to trace.
Individuals interested in it, already know there have been numerous Bitcoin-related hacks over the last year, such as when thieves stole 200 Bitcoins from Cannabis Road. There have also been reports of more ambitous hacks targeting mining pools.
The troubling part is, Bitcoin is really valuable - as valuable as real money, however federal regulators can’t help you if you get hacked, as it is not connected to any central bank.
To reassure Bitcoin users, backers and enthusiasts, Coinbase Inc., has announced that it’s been insured by Aon plc, that world’s largest insurance broker, and only uses underwriters with high credit ratings (S&P rating of A+ or A.M. Best Rating of A XV or higher).
This is not something that just happened overnight. Coinbase has been insured by Aon for almost a year now, but has only just decided to let people know.
“Coinbase is insured against theft and hacking in an amount that exceeds the average value of bitcoin we hold in online storage at any given time,” revealed Coinbase in a blog post. “The insurance covers losses due to breaches in physical or cyber security, accidental loss, and employee theft. It doesn’t cover bitcoin lost or stolen as a result of an individual user’s negligence to maintain secure control over their login credentials.”
Coinbase warns people that even though some Bitcoin wallets claim to be “fully insured,” they may not be working with accredited carriers, or they could be ‘self-insuring’, which means they can probably only cover small losses. The problem with these types of claims is they give people a false sense of security. In some cases, the number of Bitcoins they have in storage is so low that it’s easy for a small insurance policy to cover it all. The problem arises when people have more Bitcoins. Suddenly, their insurance policy is no longer able to cover it all. But Coinbase seems to be saying that by using reputable insurance companies, any growth in the number of Bitcoins it stores will be covered. Basically it’s saying if it does get hacked, its customers will be covered no matter what.
Coinbase didn’t name and shame any companies that may have less-than-trustworthy insurance plans, but with this announcement don’t be surprised if there’s a sudden rush of Bitcoin-related business wanting to come clean about their own coverage too.
And if that happens, it can only be a great advanyage for Bitcoin users and lovers.
