Imagine a situation where you want to have an insurance for a rare event. Say the Toronto Maple Leafs winning the Stanley Cup. You can set up a situation where N parties can be the judge of whether or not that event has happened. If there is a disagreement you can formulate a complex transaction where it only takes N &#x2F; 2 people to spoil the whole thing by sending all of the money to an unspendable address.<p>So the seller if the insurance tries to not pay on the extremely unlikely event, then even <i>they</i> don&#x27;t get the money. Nobody does. But if they do agree to pay out the insurance, then they get to keep a portion of the money that was in the wallet. It&#x27;s a way of ensuring honesty if even a small number of people are honest.