{"id":27460,"date":"2023-12-05T11:56:34","date_gmt":"2023-12-05T10:56:34","guid":{"rendered":"https:\/\/stage-fp.webenv.pl\/blog\/?p=27460"},"modified":"2023-12-11T17:15:43","modified_gmt":"2023-12-11T16:15:43","slug":"blockchain-britcoin-and-what-they-mean-for-insurance","status":"publish","type":"post","link":"https:\/\/www.future-processing.com\/blog\/blockchain-britcoin-and-what-they-mean-for-insurance\/","title":{"rendered":"Blockchain, Britcoin and what they mean for insurance"},"content":{"rendered":"\n

Bob, who is the Vice President, FinTech, Digital Assets & Blockchain Advisory at Lockton, provided a great explanation of blockchain and Britcoin and how they affect the insurance market.<\/strong><\/p>\n\n\n\n

Bob started his presentation with a blockchain and data 101,<\/strong> then moved on to explain potential use cases<\/strong> and finished off with a case study happening right now<\/strong> that will impact the greater UK financial and Insurance markets \u2013 the Central Bank Digital Currency (CBDC), also known as Britcoin.<\/p>\n\n\n\n

Before we take you through Bob\u2019s presentation, a quick note to say that all the information contained in it and relayed here is general in nature and should not be viewed as advice.<\/p>\n\n\n\n


Blockchain and digital assets \u2013 a definition<\/h2>\n\n\n\n

Bob began by defining digital assets<\/strong><\/em> as anything that is stored digitally, is uniquely identifiable, and serves organisations to realise value – for example a company\u2019s website, or blockchain.<\/p>\n\n\n\n

He described blockchain as a distributed database<\/em><\/strong> (also referred to in the finance world as a distributed ledger technology<\/em><\/strong>) that maintains a continuous growing list of records called blocks<\/em><\/strong>, held together by a series of cryptographic algorithms.<\/p>\n\n\n

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\n \n \"Blockchain <\/a>\n
Image copyright \u2013 Bob Williams, Lockton graphics designed by Freepik from Flaticon<\/figcaption>\n <\/figure>\n \n
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\n \n Close picture \n <\/use>\n <\/svg> <\/button>\n
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\"Blockchain Image copyright \u2013 Bob Williams, Lockton graphics designed by Freepik from Flaticon<\/figcaption>\n <\/figure>\n <\/div>\n <\/div>\n<\/div>\n <\/div>\n\n\n\n

But what is a block? Bob explained:<\/p>\n\n\n

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\n \n <\/use>\n <\/svg>\n \n
\n \u2018Think of each block as being a new line in a ledger. That line or in this case that block, contains specific information stored as a hash. This hash contains a timestamp, the necessary transaction data and the previous hash. The only exception is the genesis block which, by being the first, cannot have a previous hash.\u2019 <\/div>\n <\/div>\n
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\n Bob Williams <\/div>\n <\/div>\n \n
\n the Vice President, FinTech, Digital Assets & Blockchain Advisory at Lockton <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n
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\n \n \"Blocks <\/a>\n
Image copyright \u2013 Bob Williams, Lockton, graphics designed by Freepik from Flaticon<\/figcaption>\n <\/figure>\n \n
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\n \n Close picture \n <\/use>\n <\/svg> <\/button>\n
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\"Blocks Image copyright \u2013 Bob Williams, Lockton, graphics designed by Freepik from Flaticon<\/figcaption>\n <\/figure>\n <\/div>\n <\/div>\n<\/div>\n <\/div>\n\n\n\n


What is a hash in blockchain? And what can be saved in the blockchain data package?<\/h3>\n\n\n\n

\u2018A hash can be thought of as a little pack of metadata that holds all the information that will be needed for that specific blockchain<\/em>.\u2019 said Bob. The data package varies depending on blockchain.<\/strong> For example, for digital currency, it would be something like where it\u2019s from, where it\u2019s going to, the amount transferred, the time it happened, etc., while for real estate, it would be the address of the property, the proportionality of the property being sold, etc.<\/p>\n\n\n\n

Each hash is unique and works like a fingerprint.<\/strong> It relies on a special algorithm (e.g. Keccak-256 Model from the Ethereum blockchain) to make sure it is encrypted and secure<\/strong>. The slightest change to input, would completely change the output. This also means that it\u2019s impossible to replicate<\/strong> it – every change means the whole blockchain updates all at once.<\/p>\n\n\n\n


Why use blockchain?<\/h2>\n\n\n\n

Bob listed three main reasons for using blockchain:<\/p>\n\n\n\n

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  1. It\u2019s distributed<\/strong>
    This means that every member of a blockchain network has a copy of the file, there is no one location. Even if a node goes down, the blockchain survives and keeps going because a copy is always available.<\/li>\n\n\n\n
  2. It\u2019s unanimous<\/strong>
    This necessitates every member to see the data and agree to a change in the file.<\/li>\n\n\n\n
  3. It\u2019s immutable<\/strong>
    Because everyone needs to see it and to agree to it, blockchain becomes immutable and can\u2019t go backwards. Changes can only be reverted by creating a new ledger. \u2018This is like creating a reverse ledger in an old finance system, but on a mass scale\u2019<\/em>, explained Bob.<\/li>\n<\/ol>\n\n\n\n


    How is the blockchain being used?<\/h2>\n\n\n\n

    Bob went on to provide some use cases of blockchain:<\/strong><\/p>\n\n\n

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    \n \n <\/use>\n <\/svg>\n \n
    \n \u2018Number one, and most common use is the cryptocurrencies and the movement of money. Next is real estate, especially in the area of the ownership of properties and the tokenisation of housing. Further examples include supply chain, logistics, and finance, with everything from cross border control payments to having a single budget for multi-country firms. Also, insurance contracts. Projects are being developed right now to allow for all parts of the contract to be held together via smart contracts that link each part of the transaction together. Finally, there is also a push for ownership in sectors known to have issues with AML and management of where assets are owned and ultimately valued. Plus, many, many other examples.\u2019 <\/div>\n <\/div>\n
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    \n Bob Williams <\/div>\n <\/div>\n \n
    \n the Vice President, FinTech, Digital Assets & Blockchain Advisory at Lockton <\/div>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n
    \n
    \n \n \"Different <\/a>\n
    Image copyright \u2013 Bob Williams, Lockton, graphic\u2019s designed by Freepik from Flaticon<\/figcaption>\n <\/figure>\n \n
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    \n \n Close picture \n <\/use>\n <\/svg> <\/button>\n
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    \"Different Image copyright \u2013 Bob Williams, Lockton, graphic\u2019s designed by Freepik from Flaticon<\/figcaption>\n <\/figure>\n <\/div>\n <\/div>\n<\/div>\n <\/div>\n\n\n\n


    The Britcoin and what it means for UK Insurance sector<\/h2>\n\n\n\n

    Bob started the second part of his presentation by explaining the different types of Central Bank Digital Currencies (CBDCs), also known as Britcoins.<\/strong><\/p>\n\n\n\n

    He distinguished and defined the following three types of CBDCs:<\/p>\n\n\n\n