A Bitcoin storage service that is insured against the loss and theft of the digital currency has launched in London. Elliptic Vault uses “deep cold storage”, where private encrypted keys to bitcoins are stored on offline servers and in a secure location. The copies are accessible only via a hanful of Elliptic’s trusted directors.
The facility’s founders say they are the “first in the world” to offer insurance for Bitcoin owners.
Stolen bitcoins cannot be recovered as all transactions are irreversible. Online wallets used to store bitcoins have been subject to a number of cyber-attacks and some users have also suffered from accidental loss. For example, James Howell lost around £4.5m when he threw away a hard drive which he had forgotten contained bitcoins.
Unlike money stored in a conventional bank, bitcoins are not insured and there is no way of retrieving them once they are gone. Thanks to the digital of the currency many people are skeptical about the safety and security of the currency.
“Offering people an insured storage service seemed an obvious step,” said Elliptic’s directorial team. But convincing an insurance firm to trust the currency was not an easy task.”It was very difficult to find an insurer,” said Mr Robinson, an Oxford graduate with a PhD in physics who started the Elliptic company with two friends.
The company is underwritten by Lloyd’s of London, which critics believe will give people “more faith in the Bitcoin system”.
Insurance payouts will be calculated using the Bitcoin to US dollar exchange rate at the time a claim is made.