A Blockchain Revolution?
Blockchain. You’ve heard the word, think it has something to do with bitcoin, have no idea what it does, vaguely fear it and hope it goes away.
Such was my attitude until I sucked it up and learned everything there is to know. I still don’t get it, but let’s pretend I do. The word is that blockchain will hit the insurance industry with the approximate force as did the internet.
Insurance took forever to adopt the internet, yet now it charges toward blockchain at full tilt. Perhaps I should say no more until I explain what blockchain is. I’ll do my best, but with this build-up, it’s going to sound silly.
Blockchain is an open public ledger in which transactions are permanently logged chronologically. Yeah, that’s it alright. It’s like the system banks use to track the millions of transactions that take place every minute — but that system is only available to banks.
Blockchain, with all its transactions linked to each other, will be available to all interested parties.
How will this help insurers? Take an automobile policy. It will be written on the blockchain, thus set in electronic stone. If the covered vehicle crashes, it will automatically alert the blockchain, which will then automatically pay a suitable claim to the injured party.
PwC says the new technology can save reinsurers $10 billion annually. Customers will be more satisfied, business made more efficient. Ta da: blockchain (plus or minus 5 percent).
Once blockchain accumulates real value, hackers will stop bothering decent people’s credit cards and start stealing from the kids on the blockchain.
There must be more to it. Doctors terminating patients will trigger automatic life and medical pay-outs. If your house disappears in an earthquake, its dying words would be delivered to your building insurance blockchain. If you’re not home, you’ll have the money before you even know you have no home.
I would agree with you that this doesn’t sound like an internet-sized change in our lives, but insurance people are holding conferences and getting all worked up about the blockchain. That kind of behavior, in my experience, signals the imminent doing of something that cannot be gainsaid. We’ll all be blockheads soon.
If I were a worrier, the security of the whole thing would give me pause. On the contrary, part of the reputed allure of the idea is the fact that it cannot be attacked by any traditional hacking method. The blockchain lives on everyone’s computer, not one central place, making hacking too arduous to pursue, we are told.
Poppycock and balderdash, say I. Hackers are too smart to invent ways of breaking systems that haven’t been invented yet. Once blockchain accumulates real value, hackers will stop bothering decent people’s credit cards and start stealing from the kids on the blockchain. That’s a given. Will they succeed? Place your bets.
Progress for its own sake bores me. Public ledgers, permanent records, automatic claims payments: These are all good ideas. Bravo. It’s about time. But blockchain as revolutionary change that will tear asunder the very fabric of society? Eyewash. &