TECH & AI
and processing , further enhancing claims processing and risk assessment capabilities ,” believes Shaun .
“ As trust in blockchain grows , the wider adoption of smart contracts is expected , enabling more insurers to use them for a broader range of applications , from property insurance to health claims . The regulatory landscape will also evolve to accommodate better and leverage blockchain technology , ensuring its effective use in the insurance sector .
“ Moreover , there is the possibility of more extensive cross-industry collaborations between insurance and other sectors , such as finance and healthcare , facilitated by blockchain . This could lead to the development of innovative insurance products and services .”
Diffusion of blockchain in insurance The emergence of blockchain systems , such as Bitcoin and Hyperledger , has significantly impacted traditional financial and business services models . Blockchain technology can be applied in various areas , including the clearing and settlement of financial assets . It has the potential to disrupt the banking industry by reducing costs and risks associated with financial transactions . Large software companies like Microsoft Azure and IBM are beginning to offer Blockchain-as-a-Service , which illustrates a growing interest and investment in this technology .
Blockchain technology can facilitate the creation of secure and reliable peer-to-peer ( P2P ) financial markets . This technology allows for computational tasks to be offloaded onto a network of anonymous peer-processors , enhancing security and efficiency in financial transactions .
The cons of blockchain Scalability is one of the foremost issues , with current blockchain systems like Bitcoin struggling to process transactions at a high rate due to limitations in block size and the need to maintain security . Effective solutions are required to balance these factors while accommodating a higher volume of transactions .
Another significant concern is energy consumption . The Proof of Work ( PoW ) consensus mechanism , commonly used in many blockchain networks , demands substantial computational power , leading to high energy usage . To mitigate this , alternative consensus algorithms such as Proof of Stake ( PoS ) are being explored . These alternatives aim to reduce the energy footprint while maintaining the integrity and security of the blockchain .
Privacy concerns also persist despite blockchain ’ s promise of anonymity . There are fears of privacy leakage , which necessitate the development of advanced cryptographic
116 September 2024