Is Insurance Bitcoin’s Killer App?
An insurance platform based on the blockchain. That’s what those pesky blockchainers – who find themselves on the cutting edge of fintech – find themselves now considering for an industry long marred by hacks, loss of coins and other compromised value.
Long has this idea been on the minds of Bitcoiners, and then blockchainers. InChain, using the Ethereum platform, an open ledger like the bitcoin blockchain, is looking to introduce blockchain insurance via a decentralized platform.
The team is led by Sergei Primachik, an IT engineer, and Dmitri Lazarichev, who is also the co-founder of the wirexapp.com project.The firms’ main goal is to offer a service to insure the risks of losing assets stores at web services like exchanges and wallets.
“The crypto economy is suffering due to hacks and fraud,” Lazarichev told Hacked.
Inchain looks to solve a common blockchain problem: services getting hacked, money getting lost. The DAO and Bitfinex are two recent examples. Between those two hacks: $220 million stolen. Inchain wants to ensure users don’t lose their crypto-assets.
The company states in a press release: “Other words, any member of crypto economy can insure his risk of losses of the crypto assets placed on crypto Exchanges or web wallets.”
Inchain insurances bonds represent a coupon in exchange for acceptance of insurance risks. The company seeks to put key decisions in the hands of Inchain token holders. Inchain isn’t like other insurance platforms: the company says it “exists only in crypto economy.” It’s managed by “crypto economy members.”
These insurance bonds by Inchain represent a attempt to create fixed income class of investment instruments for all investment portfolio.
“People are asking us if this concept can be applied to real world assets (property, card etc),” Lazarichev said. “We will definitely expand our services in the future.”
This keeps the majority away from the blockchain and crypto currencies. We aim to solve this problem by introducing the insurance for crypto assets stored with exchanges and wallets.
Of course, like so many crypto-industries, will have to consider the regulatory implications of their decisions. “We believe that the regulation will start at the point where any fiat is becoming involved,” Lazarichev said. “There are no sound concepts how to regulate crypto-to-crypto markets.Obviously such a situation has its pros and cons.”
Inchain’ idea is to launch the platform within unregulated space and receive the licenses later should they be needed. Inchain token holders are entitled to vote for all important decisions such as Insurance fund management, smart contracts and oracles upgrades and other features.
“Tokens will be distributed during our ICO starting soon. There will also be a secondary market at several exchanges,” Lazarichev explained. The goal for is to bring security to the market.
“Nobody is happy if there is a possibility that his funds can be stolen,” Lazarichev stated. “There have been more than 40 hacks in the last years, every third exchange has got hacked according to different sources. It is a complete chaos without insurance and protection.” He doesn’t believe Bitcoin insurance is a step towards the dreaded mechanisms of traditional finance.
“We believe it is much better than if your crypto funds are stolen one day,” he said. “Because insurance companies are not happy to offer their services for crypto assets, the solution should be found within the crypto environment. They are the owners of the platform who are involved in decision making and other processes. They will also receive the dividends.”
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