Welcome to The Perkins Coie Tech Risk Report, a source for updates on, and analysis and interpretation of, insurance issues relevant to emerging technologies. We will address coverage issues related to cyber coverage, privacy, digital assets like cryptocurrency, Blockchain and other emerging technologies. The blog is written for start-ups and other companies dealing with emerging
Ever since the introduction of bitcoin in 2009, cryptocurrencies have become increasingly relevant to business transactions over the internet. Blockchain technology does afford additional protections to businesses using cryptocurrencies, but bitcoin, Ethereum and other cryptocurrencies represent value, and are at risk of loss, just like any other currency or asset. Insurers are in the formative stages of addressing these emerging risks, but there are still avenues, as well as new insurance products, to protect your virtual assets.
Bitcoin is an open source public payment system operating over the internet. It was designed to bypass the central bank model by using peer-to-peer technology. [For more information about bitcoin and blockchain technology, see “Treatment of Bitcoin Under U.S. Property Law.”] Use of cryptocurrency involves what is known as public key cryptography, which uses digital signatures to secure information. Basically, the signatures consist of a public key (known to everyone) and a private key known only by the cryptocurrency owner. The private key is required to access and use the cryptocurrency. As such, the protection of those private keys is critical. Such keys can be lost or stolen. Is there coverage in the event of an inadvertent loss, a mistake or a hacking incident?
Continue Reading Is There Insurance Coverage for Virtual Currencies?
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