What Is Possible to Secure at Cryptocurrency Market?
Cryptocurrency market is expanding more and more, and intervening into a big number of different spheres, turning them to adopt blockchain as the basis for their work. Insurances did not stay aside as well, and insurance mechanisms are incrementally being transferred to the crypto market.
Companies that provide this kind of insurance emerge all the time with new ideas of what you can secure. So, let’s look what insurances are available on the crypto market.
Crypto insurance types
Cryptocurrency sphere provides both traditional insurance services and cryptocurrency insurance.
- Insurance of cryptocurrency transactions
This kind of insurance is very popular among businesses who want to start making deals but still have not established trust between each other. When the need for transaction-making appears, transactions get insured, and the parties get ensured that if somebody breaches the contract, the penalties will follow. InsurePal is one of the services which successfully insures blockchain-based transactions. It is a peer-to-peer self-regulated insurance based on social proof which aims at trust establishment.
- Insurance of funds on the exchanges
First, we know that holding cryptocurrency on the exchange is a popular way among investors who like trading, as having cryptocurrency in the cold wallet would be more complicated in this case. Yes, having crypto on the exchange is convenient, but is it safe? No. An exchange may suddenly stop its work and the money will be lost, that is why the exchange fund insurances are so popular.
For example, B.Sure is a platform which provides the insurance of crypto assets, or funds on exchanges. The principle of work is quite simple and is based on smart contract. A person who wants to be insured buys a token and sends it to the B.Sure’s smart contract’s address. This way, his funds increase, according to the exchange’s price. Then, if the exchange stops working, the insured person gets money to his account.
- Insurance of investments in ICO
Investments in ICO had be insured as a commodity subject or can be secured using stock mechanisms, depending on how cryptocurrency is treated. DeHedge, for example, uses the second variant of securing cryptocurrency as it is a risk-hedging platform for investors. It means that it hedges the risks of changing tokens’ value after the ICO is closed.
Cryptocurrency insurance also gives a possibility to secure your crypto wallet from hacking and theft. You can get an insurance against cryptocurrency changes in cryptocurrency rate, or you can even insure a person with a big amount of cryptocurrency.
Some people use blockchain-based insurance from the crypto market for traditional services which normally can be insured on the traditional market as well. The products being insured in this case are the same, but the difference is that on crypto market, they are insured through the use of smart contracts.
Etherisc, for example, is a decentralized platform based on Ethereum blockchain which provides any kind of social insurance, such as death, heavy serious illness, and disastrous life situations. The platform also provides a crop insurance. In order to get it, you just need to select which crop product you have and where your field is located. If your area will experience a flood or drought which will influence your crop, you will get an instant payout.
Comparing with traditional market insurance, insurance on crypto market is not limited. Moreover, it offers such services of cryptocurrency investment security and transactions security whose successful work indicates that crypto market will develop further towards insurance provision in the future.