The Conservative Grandfather of Bitcoin Insurance

If a bank is your conservative father, an insurance company is your really conservative grandfather. That was how Thomas Shewchuck opened at Mining Disrupt Miami, held July twenty-fifth to twenty-seventh, twenty twenty-three.

Shewchuck spoke for Bitsure, the Bitcoin mining insurer he founded in twenty twenty-one, which Evertas later acquired. Bitcoin traded at twenty-nine thousand, one hundred thirty-seven dollars that week. Today it is eighty-three thousand and seventy-nine dollars.

His problem with traditional insurers was data. They want to price risk within a one to two percent margin of error, and mining is too young to have that history. Many cannot value the machines, do not understand how miners make money, and lump mining in with crypto failures like FTX. Bitsure built its products with Milliman, the actuarial firm behind Tesla's auto insurance, and by mid twenty twenty-three it insured about six percent of the global mining network.

Then he gave miners three things to do.

First, surge protection. ASICs shut themselves off at around one hundred eighty-five degrees Fahrenheit, so fires rarely start in the machines. When there is a fire, he said, it is usually electrical, often from a contractor who did not understand the power load or used the wrong cables. Put surge protection on every phase, from the transformer and switchgear down to each miner. It is cheap, and Bitsure gave credits for it.

Second, rotating maintenance for air-cooled fleets. You cannot send your whole fleet out for cleaning; that costs weeks of profit. Instead, as he put it, "every month we're going to take 10 to 15% of our Fleet and we're going to send them out." Each batch takes four or five days, and data from Bitsure's repair partner, Repair Bit, showed uptime rising roughly eighteen to twenty percent.

Third, for immersion setups, underclock. Most people overclock in immersion, sometimes forty to eighty percent above spec. But when you underclock, "the jewels per Terra has actually goes down." You make less hashrate, but the margins are much better, the machines last longer, and the power bill falls. And since dielectric fluid is flammable, lower power also means lower fire risk.

All three, he said, show up in the premium.

The full story is on Mining Disrupt at miningdisrupt dot com, and the conversation continues at Mining Disrupt twenty twenty-seven, March twenty-second to twenty-fourth in Irving, Texas.