I must admit having been slow to the table when it came to discussions about the insurance industry’s adoption of bitcoin and blockchain technologies. Although I certainly understand the concept, the idea that insurers would trust this technology right out of the gate didn’t convince me that this new form of payment tracking would see insurers clamoring for immediate adoption.
This is largely because of the mystery behind how the technology came to exist in the first place: the inventor of the bitcoin protocol, Satoshi Nakamoto. Nakamoto apparently published a paper via the Cryptography Mailing List in 2008, released the first version of the bitcoin software client in 2009, and then began withdrawing from the technology community in 2010 (perhaps after reaching billionaire status – in bitcoins). The inventor meant to remain anonymous: When bitcoin.org was registered on August 18, 2008, the registrant used a Japanese anonymous registration service, and hosted it using a Japanese ISP, reports CoinDesk.com. To this day, there are groups trying to decipher the meaning of Nakamoto’s name.
Already a part of legend, the story is that the mysterious Nakamoto worked with people on the open-source team, but took care never to reveal anything personal about himself, and the last anyone heard from him was in the spring of 2011, when he emailed a member of the team stating he had “moved on to other things.”
Anyway, I questioned the premise behind insurers’ mainstream adoption of bitcoin and blockchain (the full list of blocks that have been mined and linked since the beginning of the bitcoin cryptocurrency): Should risk-averse insurers embrace a system of record(s) for all financial transactions that are held on a decentralized public, yet encrypted, network? Should they adopt a system that was developed by an anonymous technologist who has since faded into oblivion?
Back in April, 2016 when INN’s Nate Golia reported on John Hancock’s decision to have its innovation center, the Lab of Forward Thinking (LOFT), collaborate with two companies (ConsenSys and BlockApps) on a proof of concept for using blockchain technology to onboard high-wealth clients, I still questioned insurers’ mainstream adoption.
I was wrong. I was so busy stereotyping insurers’ risk management habits, I didn’t consider the critical business goals defining its use. For John Hancock (and many others) that goal entails simplifying and enhancing the customer experience, and safely satisfying regulatory and legal requirements along the way.
“Despite misconceptions that blockchain is years away, we'll see full deployments in financial services, insurance, and healthcare industries next year,” says Peter Loop, CoinDesk.com. “This will completely disrupt our payment systems on an international scale – revenue models and other processes will become obsolete, and payments will become faster, cheaper and safer.”
The technology’s originator may be elusive, but its benefits are not.
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