Ethereum-Powered Insurer Nexus Is Winning Over Blockchain Skeptics

“My premise is that you can use blockchain to essentially trust people you don’t know – you trust the code.”

While that statement by Hugh Karp may sound like a standard line in crypto-land, his startup, Nexus Mutual, is actually building a product for those who don’t trust the code.

Or, at least, don’t trust it completely.

With Nexus, Karp is trying to revive mutual insurance, a model that dates back to the 17th century and, many argue, aligned the interests of participants better than today’s profit-maximizing insurance firms. Nexus is one of a handful of blockchain startups, at various stages of development, aiming to use the technology for this purpose.

But the first insurance product Nexus plans to offer will cover an ultra-modern type of risk: security failures of smart contracts on the ethereum blockchain.

Think of the DAO hack of 2016, in which some 3.6 million ether (valued at around $50 million at the time) was drained from the smart contract by an attacker. Or…