Why Iran wants bitcoin for oil tanker insurance

Iran has reportedly rolled out Hormuz Safe, a maritime insurance product for oil tankers trapped in the Hormuz Strait paid in bitcoin, in lieu of a toll.

Lygos Finance’s Francis Corvino said the significance of this can’t be overstated, and the implications are potentially disastrous for the Bitcoin network.

“This is the biggest and most dangerous moment for Bitcoin since probably the Chinese mining ban just from the standpoint of potential disruptions to the network.

“If we see the US government tell American bitcoin miners that they can’t mine transactions made by an Iranian entity then that’s one thing…Where things start to get a little tricky is if the US government says you can’t mine on top of blocks which include these types of transactions.”

This is where the game theory kicks in. And it could get very dicey, very quickly.

“And [if I’m a miner], I know that I’m not going to lose my opportunity cost of mining because I know that the rest of the network is going to continue to mine on top of my chain rather than this other chain which, while valid, includes transactions which we no longer agree on should be part of the Bitcoin history.

“So this is the highest the states can possibly be.”

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