'World's first' vault offering storage, protection of Bitcoins launched in London

As the nascent virtual currency expands and threatens to potentially take over the real currency, a Bitcoin storage service has been reportedly launched in London to protect the digital money.

Elliptic Vault in London insures deposits of the digital currency against loss and theft by using 'deep cold storage' where private encryption keys to bitcoins are stored on offline servers and in a secure location.

According to the BBC, the vault's founders claimed that they were the "first in the world" to offer insurance for Bitcoin owners.

As stolen bitcoins cannot be recovered because all transactions are irreversible, hackers have carried out malicious attacks on online wallets used to store bitcoins.

Elliptic co-founder Tom Robinson said that one of the main concerns people have with Bitcoin is that it's quite difficult to store securely and offering people insurance seemed an obvious step.

Elliptic is underwritten by Lloyd's of London, which, managing editor of CoinDesk, Emily Spaven has observed would give people more faith in the Bitcoin system.

The report said that insurance payouts would be calculated using the Bitcoin to US dollar exchange rate at the time a claim is made and the copies of the encryption keys are accessible only via a quorum of Elliptic's directors.

Overstock formally announced on Thurday that it would start accepting Bitcoins in payment by online consumers, thereby becoming the first major online retailer to accept the digital currency.