Insurance Companies Embracing Blockchain Technology
Posted By Anirudh Bhardwaj | 15-Nov-2016
The flexibility and potential of Blockchain hasn’t been a secret. The technology is highly versatile and can power an insanely large number of applications. Blockchain is already being used in Cryptocurrencies, FinTech, Digital Identity, Cloud Storage and Smart Contracts. Countries like Honduras also used it for Corruption Control. And now it turns out that leading insurance companies are looking for Blockchain like solutions for empowering their network.
As a matter of fact, the insurance companies have long been threatened by the augmenting risks of cyber attacks and hacking possibilities. In this context, blockchain is probably the most befitting solution owing to its high degree of transparency and an impregnable database. Blockchain also maintains a tamper-proof record of large information sets that can’t be deleted or even altered at any point in future. This and many other facets of Blockchain Technology make it adroid enough to provide protection against all kinds of online threats.
Is Blockchain Unhackable?
Everybody knows blockchain is immune to hacks and cyber attacks. But is it unhackable? Well, not exactly. But it’s the best of what we’ve got so far. Blockchain provides maximum protection against the online threats. This example will show you how hard it is to hack a blockchain secured network. Consider bitcoin blockchain for instance. Let’s assume that someone wants to steal bitcoins by taking charge of the underlying blockchain. In that case, the he needs to make some notable changes in the existing blockchain by hashing all the blocks until the current block is reached. Not only that, he has to convince at least 51% nodes of the network to agree on the new consensus and accept your proposed version. Considering the large bitcoin network, he can either seek support of the major bitcoin mining groups which is as challenging as it sounds. The other choice that he has is to double the computing power making it twice as powerful as the bitcoin network and force everyone to accept the new version. You can imagine how difficult it is to acquire such enormous computing power to outrun the bitcoin network. Owing to the Peer-to-Peer blockchain network, if at any point, some malicious attempt is made by any user, it would be visible to every other node. In this way, necessary measures can be taken to avert the potential risk.
Blockchain Insurance Services
Blockchain Technology has got everything it takes to transpire the so-called Insurance industry. Blockchain has the power to reshape all the existing insurance models including parametric insurance, microinsurance and Peer-to-Peer insurance. Blockchain can do so by virtue of Smart Contract which is nothing but a contractual clause between two parties to ensure a fair exchange using predefined computer protocols. For instance, let’s say a smart contract is made between the policy holders and an insurance company on natural calamities. So if any natural disaster takes place in the insured area of the policy holders, the Smart Contract will automatically pay some percent of the insurance claim to the policy holders. Moreover, it will help the insurance companies to prevent from frauds and online threats. Many insurance companies have already embraced blockchain and many are likely to do so in the near future.