Perhaps "secret bank vaults deep in the earth" can save Bitcoin. Benchmark just invested $20 million in Xapo, which stores bitcoin code on computer drives. If the vault is breached, Xapo says it will fully insure all deposits. A guarantee that you won't lose your shirt in cryptocurrency? How innovative!
So, they are going to keep enough cash on hand to cover all deposits? Or they think they'll find an insurance company stupid enough to do it for them? And what is their revenue model in the first place?
Whoa whoa whoa, you're asking a lot of questions. Only some of them have answers-ish. The way things have been imploding, it feels like the rest will be revealed in a lawsuit coming in 2015. From the WSJ:
Unlike credit-card transactions, bitcoins aren't safeguarded by consumer protections, so if they are stolen, no laws or intermediary firms can help recover the losses. Xapo says its vaults are backed by an insurance company, to protect against physical theft or malfeasance by Xapo's employees. It doesn't, however, protect against user recklessness, such as sharing their passwords with others.
Hmm, that leaves it unclear if even hacker theft would be covered. Sounds like physical theft and employee theft is covered. Methinks users will need to read the fine print, and the fine print on the fine print.
