Apparently major cryptocurrency firms like Coinbase are buying Bitcoin insurance. It is supposedly a problem that there is only a theoretical insurance coverage amount of USD 6 billion for the crypto space, and apparently people are jealous of Coinbase for obtaining USD 250 million of Bitcoin insurance.
GenesisBlockNews believes if someone needs Bitcoin insurance, then they should not even be using Bitcoin. There is already insurance built-in to Bitcoin via cryptographic security. As long as the private key is secured it is absolutely impossible to steal Bitcoin, and an insurance agency is not needed to secure a private key.
Yes, Bitcoin gets stolen all the time, but it would never be stolen if people educated themselves about the private key. As long as 100% control of the private key is maintained at all times, meaning the private key does not get lost, stolen, or shared, then Bitcoin will never disappear from your wallet. This requires simple steps, like using a full node wallet such as Bitcoin Core, where the private key is only inside Bitcoin Core and not on any server or accessible by anyone else. Then use a powerful enough password, and do not tell anyone the password, and the Bitcoins will never be hacked.
If using Bitcoin Core and a proper password, the only eventuality to plan for is if the computer gets stolen or destroyed. This can easily be solved by storing the private key on a properly encrypted hard drive or thumb drive. It is not recommended to write private keys down, but it could be done if very meticulous when writing down the private key, verifying the private key works after writing it down, and then storing it somewhere no one will find it like on a random page of a book in your house.
Literally with these steps there is no way to get hacked. I personally had my computer with 4 Bitcoins stolen by a gang of criminals that were specifically out to steal the Bitcoins. I stored my private key properly in a location external from my computer, and even though they did everything they could to redeem my Bitcoins from the computer that was stolen, I recovered my Bitcoins about a day later.
If me as a single individual can secure my Bitcoins even in the event of a physical robbery, why does Coinbase, a huge company with tons of resources, security, and expertise, need insurance? They do not, and the whole concept of Bitcoin insurance is a sham, to try and convince investors that somehow Coinbase is safer because of insurance. Firms that get insurance are trying to say they are better than others that do not have insurance. GenesisBlockNews believes that any crypto firm touting Bitcoin insurance looks ignorant, and is wasting investor’s money.