Best Bitcoin insurance is paying attention to the market. If someone can't cope with volatility might as well not buy Bitcoin or invest elsewhere.

Depending on the fees and the market, this could end up costing quite a bit for the end user. I don't think this would be beneficial.

Assuming people trust you, this could be possible.
I feel like the only reason why financial derivatives of Bitcoin is virtually non-existent right now is because of that trust issue.

Because of Bitcoin's nature, I don't see them coming anytime soon.

So what do these people do, if the price is much higher than the purchase price? .... Pay more to the insurance company? The simple solution

will be to wait it out... the average Bitcoin price is actually very stable over a much longer period... and the price volatility is high in the short

term. So you going to pay insurance, because you are impatient?  

If they can't deal with volatility than it's probably not the best alternative for them. What works best for us isn't what works best for everyone, regardless of how good it may be. People must weigh in the pros and cons of what things are like and decide what's best for them. If the pros don't overweigh the cons (volatility), then it's probably best not to invest.

If you start insuring fiat, count me in...


Basically this is what it's about.


Then let's put it this way: imagine the prices tank tomorrow, how would you keep it profitable for you?

this sounds like there is a lot fraud potential on both ends. plus what about regulation of some kind? but good luck!

translation of OP's post.

for a small fee. you become a member of a club. that no matter what happens he will buy your coins off you for $500+

to me declaring yourself as an insurance provider in many countries requires you having an insurance registration and also a liability policy.
but what you are actually offering in reality is a resistance point market making exchange. where the resistance point (price wont fall below) is set at $500.

i can see benefits of this.(if done right honourably and transparently)
but i can see issues too

1. customers will need to know your real location (no PO BOX/virtual office/mail drop box) to slap you with a wet fish/court order should you disappear if times become tough.
2. most people wont join now. but wait for a price crash of under say, $600 before being tempted and then will not like to see crappy terms and conditions avoiding payouts, such as 'having had to be a member for 12 months', as an example.

most fiat regulations are starting to implement rules where fiat based trading actually halts trading if a price crash drops by X%
im pretty sure bitcoin exchanges can themselves implement their own resistance point mechanisms without needing third party insurances. thus avoiding the paperwork and logistics or 'insurance'

sorry for being a buzzkill to the topic creator. im just offering out of the box opinions and thoughts to consider

short selling would involve the insurance company hoarding customers actual 'protected' coins. to be able to short them in the background for profit.  rather then promising to buy them under certain conditions.

being a vault for peoples funds and offering them only $500 worse case sounds nasty. most people would prefer to keep their own funds and instead only hand them over if a term is met

hense why i feel a resistance point exchange is more logical than a 'insurance', the end result/goal is similar, but the headaches are less..