Elliptic Vault: World’s first insured Bitcoin storage service launched in London
Elliptic Vault, a Bitcoin storage service that insures deposits of the digital currency against loss and theft, 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 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.
James Howells lost about $7.5 million when he threw away his hard drive, forgetting that he had Bitcoins stored on it.
Unlike money stored in a conventional bank, Bitcoins are not insured and there is no way of retrieving them once they are gone.
But convincing an insurance firm to trust the nascent currency was not an easy task.
The company is underwritten by Lloyd’s of London, which will give people “more faith in the Bitcoin system”, according to Emily Spaven, managing editor of CoinDesk, a digital currency news site.
Elliptic Vault uses “deep cold storage”, where private encrypted keys to Bitcoins are stored on offline servers and in a secure location
Insurance payouts will be calculated using the Bitcoin to US dollar exchange rate at the time a claim is made.
Elliptic’s focus is on storing Bitcoins as securely as possible, using “deep cold storage” techniques.
Bitcoin keys are encrypted and stored offline. There are multiple copies, protected by layers of cryptographic and physical security.
The copies are accessible only via a quorum of Elliptic’s directors.
Elliptic’s launch comes as Bitcoin has been making news around the world, with governments deciding how to legislate for the currency.
Singapore has become one of the first countries to issue guidance on taxation for Bitcoin businesses, although it also said it was monitoring transactions to detect illicit financing by criminals and terrorists.
Bitcoin was less fortunate in China, where the largest online marketplace, Alibaba Group’s Taobao, said it would ban virtual currencies.
In December, the country’s central bank ordered financial institutions to halt Bitcoin-related services and products.
There was a breakthrough for the currency in the US, however, where Overstock.com became one of the first major online retailers to accept Bitcoin on Thursday.