> Nothing could stop you from opening a business that would offer insurance in case of key theft.
There is no way to prove a key was stolen and no way to prove the theft was not a fraud. Insurance is backed up with jail time for insurance fraud and is STILL rife with fraud (especially automotive insurance).
Blockchain theft insurance is not a business that would survive long.
One aspect that would be interesting is: I would expect that after an insurance payout the stolen coin would be legally the property of the insurance company. The stolen coin would accumulate on the books of the insurance company, which could then pay a premium to a recovery agency to get it back.
Of course the anonymity factor would make it all difficult, but on the other hand you can't ever truly abscond with the cash. If they could trace the movement through the ledger to a legitimate business entity that respects the same country's laws, they might be partially recoverable.
At a small scale it would be a waste of time, but on a large enough scale it might work.
> Blockchain theft insurance is not a business that would survive long.
Why not? If they only garanty $100k and everytime you lose your key you get to pay more like car insurance. Making it more expensive to fraud with time. Not to mention all the fraud detection mechanisms that could be put in place and jail time could still apply if you're caught frauding.
There is no way to prove a key was stolen and no way to prove the theft was not a fraud. Insurance is backed up with jail time for insurance fraud and is STILL rife with fraud (especially automotive insurance).
Blockchain theft insurance is not a business that would survive long.