Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros – they’re produced by lots of people running computers all around the world, using software that solves mathematical problems. It’s the first example of a growing category of money known as cryptocurrency.
What can bitcoins be used to buy? Increasingly, a lot of things, from electronics and store gift cards to hotel rooms. In that sense, it’s like conventional dollars, euros, or yen, which are also traded digitally.
However one of bitcoin’s most interesting characteristic and something that makes it different than conventional money, is that it is decentralized. No single institution or country controls the bitcoin network. This puts some people at ease and makes others quite nervous.
In addition, Bitcoin transactions are anonymous. Once you have a bitcoin, no one can find where you got it from one who gave it to. This is also both comforting and nerve-racking at the same time.
One thing is for sure is that with over $8 billion in Bitcoins currently in circulation and more old world companies (and governments) recognizing them, bitcoins are growing in legitimacy and its value proposition makes it unlikely that their growth will stop anytime soon.
Ben Bernanke, Chairman of the Federal Reserve, USA, commented “[Virtual currencies] may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system.”
Of course, all this has a risk, and risk means opportunity for the insurance industry.
Recently I did a series on “What’s New in Insurance” for World Risk and Insurance News on bitcoins.
Bitcoin Insurance Agency
At Innovation Insurance Group, we “get” bitcoin, and we set up an agency to handle the insurance needs, from the routine to the unique, of companies in the bitcoin industry. At Bitcoin Insurance Agency, we know the questions to ask and, through our “C” level relationships built over 30 years, we find the right insurance carriers for the specialized needs of the bitcoin community.
Source (partial): www.coindesk.com