This especially seems hard to certify. Bitcoin aims to be quasi anonymous. Users could just log into their own systems and transfer coins to another anonymous wallet elsewhere and then try and claim robbery. Or be rooted (by say script kiddies) and then take advantage of that, transfer coins, and try and claim for them.

They end result is something like bitcoin would seem nearly impossible to insure for in any reasonable way.

Isn't this akin a bit to storing a bag with $12K in a storage locker in a public space and then asking to reimbursed after robbers broke into the locker and stole the bag.

I think the author is hoping for way too much. The world doesn't work that way, nor probably can or should it.

It's actually a bit worse than this -- basically this is analogous to putting the $12k in a storage locker and then posting on the internet the exact location of the locker.

Given that a bitcoin client was almost certainly running on this box, basically anyone could have connected to the bitcoin network and established this guy's IP address as a target.

If you run bitcoin software, you are advertising your IP address as a high value target.

This is somewhat off topic, but just because the TOS says something doesn't necessarily make it true.

This is why insurance exists.

I wonder if there are any insurance providers who'd be willing to provider coverage for this sort of event.

I write software for use by high risk insurance carrier. There is coverage for just about anything. One of the inland marine insurance types might cover this. (possibly Electronic Data Protection or Valuable Papers)

Insurance won't insure for what they don't understand and build a risk model for. I can assure they won't understand something like this for a very long time.

I'm not sure they need to understand bitcoin specifically to build a risk model, wouldn't they just need general data on losses suffered by various internet hosts due to hacking attacks? Doesn't really matter exactly what is stolen as long as they have a corpus of data on the value of everything that is stolen in this manner. Bitcoin wallets probably fit somewhere in the payoff curve for that.

There are a couple of insurance companies who will give you a quote on literally anything. You may not like their quote, but they'll give you one.

I've never heard of one, but there may very well be a market for that sort of thing. The problem with Bitcoins will be the legal jurisdictions involved, since these services are regulated nearly everywhere, right?

Exactly. The attitude of pushing more and more trust onto the provider is just going to cause bigger blowups when something inevitably goes wrong.

That is very interesting indeed. Holding Bitcoins in a wallet on your server is the equivalent of having actual cash on your server. When someone takes it, there is a definite value of the damages vs. ID theft where the damage could be drawn out over a period of time.

As I consider launching my own Bitcoin business, I have wondered about where to host the bitcoind that serves as my business bank account. This event certainly makes me reconsider just any VPS.

> from such causes beyond the direct and exclusive control of Linode.com.

But isn't access to the customer service portal under direct and exclusive control of Linode.com?

I am pretty sure this is OP's first experience with ISP contracts. I guarantee it is not Linode's first legal dispute over their TOS with a noob.