svia insurtech summit dec 5 - 6th 2017
TRANSCRIPT
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Blockchain & InsurTechWhat’s attainable in the next 18
months?December 2017
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#FollowTheMoney
• Token sales of blockchain are north of $2,000,000 this year
• CME (12/18) and CBOE (12/10) begin trading Bitcoin futures • $500M in VC money in 2016• Bitcoin hit $4,000 $7,300 $10,000 $12,000• 18,000 cryptotokens launched
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And there aren’t five enterprise launches in the room
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What is a blockchain?
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Recorded events (ledger entries) recorded chronologically and verified by multiple third parties. May be public or private
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What’s in a Blockchain Ledger?
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1. Eye Exam 5/12/2017 Patient 8931
2. Visit on 5/12/20173. Need new glasses4. New prescription
Patient 89315. Prescription 99881
filled6. Follow-up appt
scheduled 6/12/20177. Annual Checkup
5/12/2018
1. Eye Exam 5/12/2017 Patient 8931
2. Visit on 5/12/20173. Need new glasses4. New prescription
Patient 89315. Prescription 99881
filled6. Follow-up appt
scheduled 6/12/20177. Annual Checkup
5/12/2018
1. Eye Exam 5/12/2017 Patient 8931
2. Visit on 5/12/20173. Need new glasses4. New prescription
Patient 89315. Prescription 99881
filled6. Follow-up appt
scheduled 6/12/20177. Annual Checkup
5/12/2018
• Rows of information, just like a database
• Validation and verification is based on mistrust
• Public audit trails, (we’ll talk about private ones later)
• Record keeping by many third parties often unknown
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Why will Blockchains get Adopted?
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• 400,00 transactions per day• Median transaction fee of $3.25• Average time for median block size is up to 45 minutes
$450
• 600,00 transactions per day• There are a total of 18,140 ERC-20 Token Contracts• See the token values at https://etherscan.io/tokens
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Why will Blockchains get Adopted?
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Platforms = Wealth: Amazon Web Services
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• Detached from Retail business in 2006
• AWS Q1 2016– $604 MM
• AWS Q1 2017– $890 MM
• Operating Margin – 24%+
https://www.recode.net/2017/4/27/15451726/amazon-q1-2017-earnings-profits-net-income-cash-flow-chart
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and verified by multiple, independent third parties
Blockchains are…
Recorded events or transactions (called ledger entries) recorded chronologically, mathematically signed
Blockchainin3D• Decentralization• Disintermediation• Distributed[Ledger]
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What makes a good blockchain use case? 1. Multiple parties share data
– Multiple participants need views of common information
2. Multiple parties update data
– Multiple participants take actions that need to be recorded and change the data
3. Verify Trust
– Every participant requires validation of the transactions and integrity of data written
4. Decentralized
– No single repository or owner of the repository locations
5. Distributed Ledger
– Data is written across multiple ledger entries
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Is This a Hammer In Search of a Nail?• Inter-Company Transfers (manual hand-offs)
– Insurance– Property and title transfers– Anything with government as a third party
• Verifiable Record Management– Formally physical assets now digital (stocks, currency, prescriptions, vehicles)
• Identity Management– Identity and “certificates of trust” for mobile economy companies such as
AirBnB and Uber– Reputation
• Smart Contracts– It’s the new Software as a Service
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What’s the Foundation For Insurance?
• Identity– People– Assets– Property
• Beyond digital signatures– Document aggregation and partner validation
• InsurTech– Streamlining workflow, IoT and incident monitoring
• Redundancy – Store data/record without fear of loss
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Namespaces
• A namespace is simply a boundary not unlike the borders of a country or the address – (Washington Monument, CenturyLink Field).
• Namespace architectures are addresses– The are used to bound the scope of a set of activities
or actions
– Some blockchains (Ethereum, RChain) allows us to compose name spaces. That is, they may or may not be shared
• This allows us to search through or for an exact node allowing transactions via smart contracts to both process faster and more precisely.
• Namespaces can be both public and private.
– Private Namespaces are valuable for transactions between two parties (e.g., funds transfer) or complex ones between select partners such as supply chain.
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Sharding
• A long standing technique for subdividing tasks or server load. – Originally used in databases, shards are
horizontal slices of a data store spread across multiple services to take advantage of processing capabilities of many lower powered devices
• A series of chains created• The net-effect is speed. It’s not
necessary or required to write to every block
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Smart Contracts and Oracles
• Used loosely as ‘contract’, a smart contract is a process with– Persistent state– Associated code– Deterministic which is why you need…
• Oracles are connections to the outside world– They are designed to ”edge trigger”
smart contracts. – When one or more conditions are true
they cause a smart contract to run
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Oracles
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HardwareSoftware Consensus Based
• Oracalize – www.oracalize.it• Chainlink - link.smartcontract.com
duplicate :: [a] -> [a]duplicate [] = []duplicate (x:xs) = [x, x] ++ duplicate xs
main = print $duplicate "abc"
Inbound and Outbound
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Private vs. Public Blockchains
• Public Blockchain– Many third parties validate ledger entries– No single “owner”– Harder for the black hats to take over– Policy changes are by consensus unlike companies (e.g., Facebook)
• Private blockchains– Faster to close or clear transactions– Single owner – Bad scenarios for trust– Good for small autonomous networks
• Internet of Things
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Simple Workflow
• Handoffs where there are manual processes
• Small claims – Too expensive to test?
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Claim Submitted
Adjuster Report
Small Claim
Work with 3rd Parties
Size >$1,000
Fraud Check
<$1,000
No Yes
Large Claim
Collect Documents
Pay Claim
End
Send Rejection Letter
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Decentralized Identifiers (DID)• Conventional identity management is
based on centralized authorities– Directory servers– Certificate Servers– Domain name registries
• DID*– Lifetime portable identity not dependent on
any centralized authority and can never be taken away• Person• Organization• Asset
– By transaction
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*https://w3c-ccg.github.io/did-spec/
My Wallet
did: h275cq14f2aua8a7ljtykbktj5did: vyma705f2azif5trsnj8did8rmdid: 5j8htbh0rrlb1t5ubf6i3kg3ls did: wftgnlbw45chgtha95zqa69sbf did: qhq3k0r1p0jz46tggvcyf98hxk did: f0e63zuhsbtfunw8hh333f5shc did: 1lot6cgg2hqgxczwq9ulqrhece did: z61swni6pshhqhjrvwvrnc6rvp did: nih1lhusnzafjw1ftfemi530db did: x17lkee0ekimcubutadi4soqnz did: 3w1co77529qcg4xesrrl1r7fds
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Verifiable Claims
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Issuer
Signs Claim
Holder
Countersign Claim
Wallet
Verifier
Verify Signature
Decentralized Identifiers
Blockchain Infrastructure
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Zero Knowledge Proof Identity
• Completeness: – If the assertion is true, the verifier is convinced of the truth
of the statement
• Soundness: – If the statement is false, no bad prover can convince the
honest verifier that it is true, except with some small probability.
• Zero-knowledge: – If the statement is true, no verifier learns anything more
than that
– Example:
• “I keep a speckled colored dragon”
• “I am over 21”
• “This is the password to my bank account”
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Proving you have knowledge of something without having to share the source of data.
Trust
Verifier
Prover
did: x17lkee0ekimcubutadi4soqnz
duplicate :: [a] -> [a]duplicate [] = []duplicate (x:xs) = [x, x] ++ duplicate xs
main = print $duplicate "abc"
Smart Contract
Yes/No
a8a7ljtykbktj5trsnj8did8rm5ubf6i3kg3ls chgtha95zqa6
EncryptedAsset
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Where are the Immediate Opportunities?• Onboarding– Costs– Opportunities – Churn in the industry
• Fraud Detection – Estimates show that 5 – 10% of non-healthcare claims are fraudulent.
Identity resolves tracking the information• Document Packages– Requires the least amount of group participation– Signing and sharing is well established
• Peer-to-Peer Insurance– Incentivizing payments
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#FollowTheMoney
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Barriers/Opportunities
• Regulators want to address single entities and not networks• Too many use cases where everyone must participate• Hot potato of risk– Last one holding it, gets stuck with the check
• PII– Right to be forgotten– Where is the data shared/stored– Keep the data only for as long as necessary
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Thank You!
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Lawrence I Lerner• Bridging the gap between the Business and Technology– 25 years executive leadership (PricewaterhouseCoopers, Cognizant)– Every day technology product launched Motorola, Discover Card, The
New York Times, Safeway Stores, in-store coupons– Four years of blockchain related work– 15 startup companies – leadership and funding– Public and Private board roles
• [email protected]• Direct: +1.630.248.0663 (Seattle Based)• Twitter: RevInnovator• LinkedIn: https://www.linkedin.com/in/lawrencelerner/
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