By now you must have heard of blockchain and cryptocurrency creating the buzz of the moment.
There are many articles on the internet currently raving about what Blockchain is and how it could potentially disrupt the world as we know it. This article is not about that but rather about the reason we as a company (microinsurance), have made the decision to use blockchain and why we see it as important for our customers.
Back in the mid to late 1990’s, a few early adopters got excited by this new buzz called the internet, a risky concept that was at the time either being laughed at, or simply ignored. A very few of those early adopters scraped through, promising to re-invent whole new industries and have managed to do so, becoming the new companies that we now look up to. By 2010, it was no longer a question as all saw the point and joined the bandwagon, and as we know the rest is history.
So, is blockchain the new buzz to consider for our future? What is the big deal about blockchain? For now, we know that basically it changes the rules of how things use to be and is posed to disrupt industries, just as the internet did.
The real question now is this; what is so important about Blockchain and why do we need to pay attention?
There is an old adage about how on the internet nobody truly knows who is really behind a profile but with Blockchain, that is all about to change! Yay for online dating or padding out your life on Facebook or enhancing your LinkedIn profile.
The issue has always been about trust. How do you trust anyone, or even worse how do you know that you can trust these platforms? To TRUST something today is difficult; there are many businesses and processes built to exploit us. Platforms making %’s on the actual service or process you want or those they make sure you need. You pay, and this cost is built into the systems and products you use. These ‘real trusted’ relationships all must be paid and defended.
Just like selling books online was initially rejected by the traditional industry 20 years ago, many institutions today are very sceptical about Blockchain replacing their value. These are the intermediaries (banks, brokers, lawyers, consultants, etc) who are there to guarantee this real-world trust.
Blockchain aims to virtualise this. It is like the internet was aiming to do back in late 1990’s to shopping. There are now some who are starting to experiment with this new digital technology to defend or build new ‘central’ control and management systems.
Why are they starting this now?
Recent technology waves, e.g. the Internet of Things and the proliferation of smart mobile devices, have all gone global and have given digital attributes to the physical things, i.e. door bells, thermostats, location, motion. This is reminiscent of the spread of broadband that finally kicked off the growth of sales and social on the internet in the early to mid-2000’s.
This digitisation of ‘things’ directly endows physical objects with information and intelligence making the physical virtual. Conversely, because of the Blockchain’s in-built immutability, the data that is generated becomes ‘real’ – it collects physical attributes.
This allows us to consider new products and services, generating a whole new value chain with trust built in and removing the cost and friction of working through the old world of layers of centralised institutions and intermediaries of trust.
No wonder that 2017 saw a big switch with leading institutions and even governments building real applications using blockchain. In India, SBI and 27 other banks joined hands to form BankChain to enable smart contracts and store KYC details. American Express and Santander has partnered with Ripple to enable real-time cross-border transactions. Estonia wants to become the first digital nation with its own cryptocurrency.
At microinsurance.com we know that Blockchain can be used today to support our business, to increase customer experience right through the insurance process, end to end. Using smart contracts, identity and payments to reduce the friction and costs especially around claims. Therefore, today we are starting to build and integrate this in our products. We believe in collaboration and experimenting, and most especially we believe that blockchain could be a trend that’s going to be difficult to ignore.