Bitcoin Mining Insurance (February, 2023)

Bitcoin Mining:

What is Bitcoin Mining?

While most of you are aware of what bitcoin mining is, there are still people unaware of it’s existence. The process of digitally validating Bitcoin transactions on the Bitcoin network and being added to the blockchain ledger is called bitcoin mining. It’s done by deciphering complex cryptographic hash puzzles to back up blocks of transactions that are updated on the decentralized blockchain ledger.

Bitcoin Mining Insurance

The term Bitcoin mining refers to verification of transactions to being valid and to be successfully added to the Bitcoin blockchain correctly using a global network of computers running the Bitcoin code. Bitcoins are basically created by the means of mining.

Bitcoin mining Steps:

Bitcoin mining includes

  • The verification of new transactions with respect to the Bitcoin network, which results in the production of new bitcoins.
  • Bitcoin mining is the task by performing which Bitcoin transactions are validated digitally on the Bitcoin network and added to the blockchain ledger.
  • Deciphering complex cryptographic hash puzzles to substantiate blocks of transactions that are updated on the decentralized blockchain ledger is how it’s done.

There exist 3 ways by which bitcoin miners can acquire bitcoins. These are:

  • Mining new bitcoins
  • Purchasing bitcoins on the exchange market
  • Exchanging bitcoins for goods and services

As stated above, bitcoin mining is possibly the most exciting option as there is no stopping of miners from discovering. There is a caution though. Mining of bitcoins can a lot of taxation as it requires very high computing power(which transfigures into electrical power) to solve complex mathematical equations to verify transactions and add them to the blockchain digital ledger.

Bitcoin Mining Benefits:

What are the Benefits of Bitcoin Mining?

One convincing reason why you should consider crypto mining are incentives. The Bitcoin blockchain is constantly rising in popularity, raising its potential value. Once you successfully mine a particular block, you can start earning great rewards.

Some mining companies whereas, can afford the required computing power of cloud mining, by joining a mining pool,we can still mine a new block. A group of miners that combine their hash power to optimize the mining processis amining pool. By increasing the number of individual miners, Bitcoin mining pools increase their chances to mine bitcoin.

Bitcoin and other cryptocurrency seem to have an evident future as the no. of people who embrace the world of blockchain technology are increasing everyday. When it all started, one bitcoin was equivalent to US$0.0008.

At present, the value of one single bitcoin equates to thousands of dollars. The price of Bitcoin increases somewhat proportionally to the peoples interest.The cost of Bitcoin has risen exponentially throughout the years, unlike fiat currencies.

While the prices of cryptocurrency may be turbulent, the bitcoins stored in your wallet are still worth something. If the bitcoin price drops by 95%, which is quite impractical, your bitcoins wouldn’t amount to zero. As of what the market looks like at present, that situation seems highly unlikely, so is you earn a bitcoin, it’s worth a lot of money.

Is Bitcoin Mining Insurable?

The constantly changing nature of crypto mining technology makes actuarial data unreliable. Although Bitcoin and other crypto currencies have been mined for over a decade, a large portion of the insurance industry still doesn’t get into this risk.

When you search the web for “crypto mining equipment coverage” or “Bitcoin Mining equipment insurance” there appear to be veryfew search results, indicating that there is no widespread specialized coverage for crypto or Bitcoin equipment.

However, crypto mining equipment falls under the description or definition of computer hardware or datacentre server equipment, terms that insurance carriers have experience with. This paper attempts to provide coverage on underwriting and post loss considerations for an industry that is growing far quicker than most expected.

So where do you get an insurance for crypto mining?

At present there are multiple options to chose from, some of which have been listen below

BitGo:

BitGo is a digital asset company that fucuses exclusively on serving institutional clients since 2013. It provides institutional investors with custody, liquidity, and security solutions. Available in both centralized and decentralized finance, BitGo offers market leading trading, lending, and borrowing services through its prime brokerage services and acts as the custodian for WBTC, the leading global stablecoin for Bitcoin.

  • Automated Data Import
  • Exchange Integration
  • Export Transactions
  • Historical Prices
  • Income Overview
  • Margin & Futures Support
  • Profit & Loss / Cap Gains
  • Staking / Lending / DeFi Support
  • Tax Form Generation
  • Tax Loss Harvesting
  • Wallet Integration
  • Blockdaemon: Reinforcing Over 60 blockchain networks (Ethereum, Solana, Cosmos, Polkadot, Cardano, EVMOS, Osmosis, Polygon, Helium, Avalanche, Kusama, and more) with RPC Nodes, Validator Nodes, APIs.
  • Blockchain Platform
  • Crypto Wallets
  • Crypto Staking Platform
  • Blockchain-as-a-Service Provider
  • White Label Crypto Exchange Software
  • Blockchain Node Provider
  • Blockchain APIs
  • Crypto APIs
  • Blockchain Explorers
  • Crypto & DeFi Insurance
  • NFT Analytics Tool
  • InsurAce: A decentralized multi-chain insurance protocol, leading insurance service provider to DeFi users. It provides robust,reliable, and secure insurance services that allow them to protect their investment funds from various risks.
  • Crypto & DeFi Insurance
  • DApps
  • DeFi Projects

Is Crypto Mining Insurance needed?

So, is getting a Crypto Mining Insurance worth the buck?

Playing it safe with precautions is always a better option than saving up for a cure which would be way more expensive. We believe that the Mining Equipment and Hardware must at least be insured to help ease the loss marginally in case of a Hardware Failure.