No policies, no lawyers: Can cryptocurrency replace insurance?

​The insurance system has long been considered a reliable tool for financial protection. However, over time, disappointment has set in: people pay premiums, insure their lives and property—only to end up facing rejections, delays, and legal traps. Is there another form of capital protection that is more fair and effective?

To answer that, let us first understand who actually invented insurance. Insurance as a form of risk protection originated in ancient times. The earliest documented references date back to the third millennium BCE in Babylon.

In the Code of Hammurabi (circa 1750 BCE), there are clauses that resemble the idea of insurance. For example, merchants were granted loans that did not have to be repaid if their goods were lost during transport. This allowed for risk-sharing among participants in trade operations.

In Ancient Rome, there were communities known as collegia that collected contributions from members and paid out compensation in the event of death. During the Middle Ages, maritime insurance developed in the Italian maritime republics such as Genoa and Venice. Merchants and shipowners insured their cargoes against pirates, storms, and other hazards of sea travel.

The purpose of insurance was to redistribute risks among many participants. Instead of one person or company bearing the full burden of a loss, all participants contributed small amounts to a common fund. In the event of a claim, the affected party would receive compensation from this pool. This concept became the foundation of modern insurance systems and remains at their core to this day.

Modern insurance: types, purposes, and importance

Today, there are various forms of insurance that cover nearly all areas of life: personal insurance (life, health, accidents), property insurance (homes, vehicles, business equipment), and liability insurance (for example, auto insurance or professional liability for doctors and lawyers). All of them serve one primary purpose—to protect against financial losses in case of unforeseen events.

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Insurance enables individuals and companies to minimize risks and plan ahead for emergency situations. People insure their apartments against fire or flooding, vehicles against accidents and theft, and health against the high costs of medical care. Businesses insure their assets, employees, and even potential legal expenses.

At the governmental level, insurance is recognized as an important mechanism for maintaining economic stability. Many countries legally require their citizens to purchase insurance. In this way, they reduce the financial burden on public budgets in cases of widespread insurance claims.

The hidden pitfalls

As we can see, many people still regard insurance as a vital tool for protecting capital and try to use it as broadly as possible. However, insurance has serious limitations. It does not protect against inflation—a payout received years later may turn out to be significantly devalued.

Moreover, insurance does not generate income like investments do, nor does it grow capital. On top of that, there are high fees, long-term obligations, and in some cases, bundled products that are not truly needed.

In addition, large insurance companies employ entire teams of lawyers whose job is to dispute claims and minimize payouts. This makes the compensation process complicated and not always fair.

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Is there an alternative to insurance?

In its current form, insurance implies significant expenses without offering any potential for capital growth. By purchasing insurance policies, a person pays for the chance of assistance in the future—but even that chance is not guaranteed. That is why more and more people are exploring alternatives that not only offer protection but also create opportunities for financial growth.

Such an alternative may be found in cryptocurrencies and trading. By investing in digital assets, an individual can build their own financial safety net, manage risks independently, and earn income at the same time. Skillful allocation of funds across different tokens, the use of hedging tools, and risk management strategies can not only preserve capital but significantly increase it. Unlike insurance, trading offers flexibility, control, and the potential for growth.

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How to explore this topic? To learn more about crypto trading, it is best to start by understanding the basic concepts—what is cryptocurrency, what an exchange is, how orders work, and what the differences are between spot and futures markets. Beginner traders are advised to take educational courses, follow market analytics, and practice using demo accounts. It is also important to choose a reliable platform, master risk management techniques, and define one’s own trading style.

Whom should you trust with your future?

The world is changing, and financial independence is increasingly becoming a personal responsibility. In the past, insurance was seen as the only way to protect against risks. But now, better options exist—such as managing your own capital through cryptocurrencies and trading. This is not just a way to "ride out the storm," but a real opportunity to build a sustainable and growing financial system on your own terms—without depending on insurance companies and their lawyers.

Of course, crypto trading requires knowledge and discipline, but it offers what insurance does not: control, flexibility, and the potential for real growth. To move confidently in this direction, it is enough to take the first steps: learn the basics of the crypto market, choose a reliable exchange, and begin practicing.