Nothing makes a bitcoin trader more nervous than being forced to unplug from the cloud. Parametrix, a supplier of technology downtime Companies Insurance, wants to help traders feel less anxious.
The insurer said on Tuesday that it would provide crypto firms cloud downtime insurance. The Cloud Downtime Insurance for Crypto policy would allow the cryptocurrency firm to assist safeguard its consumers from damages if a crypto marketplace, Crypto wallet, DeFi, or platform became unreachable due to a public cloud provider outage.
"I've been in a situation where my wallet was unavailable or a transaction was in limbo many times, and I can assure you that it's not a pleasant experience," said Giacomo Arcaro, CMO of Blackchain International, a New York City-based consulting firm that assists with blockchain projects and social media promotion.
According to Parametrix, service interruptions on crypto platforms have a significant role in eroding customer confidence and loyalty to crypto enterprises. Propeller Insights conducted a study of 522 customers for the firm, and 71% of the crypto users in the sample said they would either withdraw their money or transfer it elsewhere if a crypto platform went down.
These disruptions happen more often than one may assume. In the poll, over half of the crypto users (45%) reported their crypto platform has suffered a service interruption. Furthermore, data obtained by Parametrix in 2021 revealed that every three weeks, one of the three main public cloud providers had a 30-minute outage.
A Problem of Trust
According to Parametrix, trust is a major worry among both crypto users and non-users. In a Propeller Insights poll, two out of every three non-users admitted to not trusting crypto platforms, exchanges, or wallets, compared to ten percent of crypto users. More over half (58%) of crypto users, on the other hand, say that they only "slightly trust crypto platforms, exchanges, and wallets."
According to the findings of the poll, insurance may help to develop confidence in cryptocurrency. Nearly two-thirds of all respondents (65%) said they would be more willing to purchase bitcoin, trade online , or store Etherium on a platform, exchange, or wallet that guaranteed compensation in the event of a technical breakdown.
More than half (52 percent) of non-users said they would be more likely to engage in crypto activities through a company that has downtime compensation in place, while 89 percent of crypto users said they would be more likely to buy, trade, or store cryptocurrency on a platform that offered compensation if it became inaccessible.
"We think that insuring businesses against downtime will increase confidence in the crypto ecosystem," said Neta Rozy, CTO and Co-Founder of Parametrix.
"With insurance, more consumers are likely to transact knowing that financial risk is shared among a number of organizations rather than being concentrated in just one," she told RK store.
Customers may be made whole if there is a cloud outage that leaves them unavailable, thanks to Parametrix's downtime insurance service, which distributes the risk of inaccessible platforms, exchanges, wallets, DeFi, and transaction executions from crypto firms to the world's leading reinsurers.
"We have the support of leading insurers and reinsurers throughout the world, including Lloyd's of London underwriters and a top three global reinsurer," Rozy added.
Cloud Continuously Monitored
"Many individuals believe that every cryptocurrency-related firm is just another brick in the wall of a giant Ponzi scam," Arcaro said. "This is a serious issue."
"I believe that most crypto users would be relieved to learn that, regardless of the circumstances, any contact with a particular platform may be completed," he stated. "Given what's at risk in a typical crypto-interaction, they'd also be prepared to pay a modest charge."
Premiums are computed in general depending on a company's technological environment, the monetary amount of coverage they want per hour of downtime, and the number of hours of downtime they want to cover, according to Rozi.
"Parametrix's monitoring software continually monitors cloud providers down to the millisecond, allowing us to detect outages in real time," she said. "In reality, we acquire 675 million data points every week throughout the world." As a result, when a service interruption happens, we know the precise length of the outage and can compute the payment due to insureds."
There is no lengthy claims procedure, as there is with regular claims. Within 15 business days, companies are reimbursed, allowing them to recoup losses, repair damages, and reaffirm their obligations to customers and investors.
Visible But Not Understood
Parametrix lists the following advantages of Cloud Downtime Insurance for Crypto:
- Collecting cash to reimburse consumers and reduce churn due to cloud failures; covering liabilities and retaining trust.
- Providing insurance for a company's largest business cost, cloud spending, by reducing the risk of outages as cloud spending increases.
- Maintaining liquidity, company continuity, and contingency cash flow to protect revenue and cash flow.
- While trust is a major issue with crypto, so is visibility, albeit this is improving quickly.
Due to the growth in the value of bitcoin, which has been restricted to crypto geeks, public awareness of cryptocurrency has been expanding, according to audience analytics platform Disqo in a research issued in February.
It went on to say that ordinary people may now purchase bitcoin using PayPal. Crypto.com and FTX plan to advertise at the 2022 Super Bowl to attract new customers, and Crypto.com made news in November 2021 when it paid $700 million for the naming rights to the Staples Center in Los Angeles.
However, although one in five persons in the United States owns or has owned cryptocurrency, many people remain unaware of it, according to a poll conducted earlier this year by Reticle Research of 1,500 adults in the United States. More than half of those who said they wanted to acquire cryptocurrency had no clue how to do so.
Although 90% of those polled recognize the phrase cryptocurrency, more than two-thirds have no idea what it is.
"While our study was conducted prior to the Super Bowl's deluge of crypto-related advertising, it's more probable that those commercials raised bitcoin awareness than than understanding," stated Ross Rubin, Reticle's lead analyst.
"Exchanges have a motivation and a need to educate clients about crypto beyond traditional investing risk disclosures," he wrote, "given that conventional money is frequently used to buy assets but cryptocurrency is usually the investment."
