World's first insured Bitcoin storage service launches after currency battles

London-based Elliptic will use ‘deep cold storage’ to secure the currency

The technique uses both strong encryption and secure physical locations

The move comes after news that two million computers were last week made into 'Bitcoin slaves' after being infected by Yahoo malware

The current price of Bitcoin is $840 (£511). However, its value rose to over $1000 (£613) last year.

The dramatic rise has left many early-adopters with digital wallets worth millions of pounds sitting on their hard drives.

It has also prompted increasingly sophisticated techniques from cyber criminals hoping to ‘mine’ Bitcoins.

For instance, the security breach on the Yahoo homepage last week used malware infected adverts to make computers into Bitcoin slaves.

Other than a slow computer, those infected with the maleware were unaware that their machines were being used to mine Bitcoins.

Experts estimate that these criminal networks generated as much as $100,000 (£60,000) each day over the four day period the malware was active.

Lloyds of London is the underwriter for the Elliptic Vault service which charges a flat fee of two per cent of the value of a user's deposit.

This means if you want to store £10,000 worth of coins, it will cost £16.67 per month.

The company added that it has seen some demand for the storage of other crypto-currencies, including as litecoin, and is currently looking into expanding the service.

In November, James Howells revealed he had lost 7,500 Bitcoins when he unintentionally threw away the hard drive they were stored on.

But he is now ruing his decision – after he realised his stash would now be worth £5 million.

The Bitcoins, that could make him a millionaire, are now buried under four feet of rubbish and mud in a landfill site.

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