How Does Blockchain, ICO, And Cryptocurrency Affect Insurance And Other Industries?
From this day and in the coming future, it’s difficult to find a person that hasn’t heard about blockchain or, at least, about Bitcoin. Decentralized systems are slowly reshaping our daily life. Even such financial institutions as pension funds start investing in cryptocurrency, while more and more businesses implement blockchain technology to streamline operations. Not to mention thousands of startups that launch their own tokens and get financial support from interested sponsors via ICO rounds.
But what exactly is happening? How can blockchain, crypto, and ICO reshape our good old world of slow bank transactions and ubiquitous governmental control? We will try to answer these questions by exploring the leading industries affected by blockchain today.
Key Definitions: Blockchain, Crypto, ICO
Without a basic knowledge of the concepts, it will be difficult to understand how disruptive these innovations are. Thus, check the following definitions:
- Blockchain is a decentralized network that is run by multiple computers instead of a single server. It stores and processes data blocks that form a global chain. Information is protected by cryptography, can’t be modified or corrupted. That’s why blockchain enjoys near-perfect security and transparency while being independent of existing regulators or governments.
- Cryptocurrency is digital money that powers the blockchain. Probably, you’ve heard about Bitcoin or Ethereum — the two largest crypto coins by market cap. As the name implies, cryptocurrencies are protected by cryptography, similarly to other data stored within the blockchain. Operations with cryptocurrency can’t be traced by financial organizations, have high speed, and relatively low fees, unlike fiat payments.
- ICO (Initial Coin Offering) is a form of funding, wherein any company can release its native crypto tokens and sell them to investors. Further, the investors can utilize tokens within the parent ecosystem or trade at exchanges. ICOs were extremely popular in 2017–2018, but a lot of fraudulent and scam projects shattered the investors’ confidence in the concept.
Industries Affected by Blockchain/Crypto Boom
As the three mentioned concepts are strongly interrelated, it’s worth reviewing their combined impact on different spheres. The thing is that the combination of three elements can be used in almost any industry. Let’s take a look at the most interesting examples.
Ad platforms based on blockchain get rid of third parties and connect consumers with producers directly. As a result, people receive fewer ads and enjoy better personalization. Furthermore, companies that promote their products/services get higher conversion rates thanks to perfect targeting.
For schools and universities, blockchain has several valuable benefits. Firstly, it allows switching to a digital ecosystem that removes the need for paperwork. Moreover, the inability to falsify records is wonderful for verifying degrees and credits. Finally, it should be easier and faster to pay fees in crypto as well as keep educational data in immutable blockchain storages.
Obviously, financial services are the ideal sphere for decentralized projects. Bitcoin, the first blockchain-based initiative, is focused on simple and cheap cross-border payments. A lot of other cryptocurrencies also aim at more efficient transactions. Among the benefits, there are full transparency, high security, reduced costs, and anonymity.
Thanks to the immutability of records, voting systems based on blockchain are trustless and secure as nobody can duplicate or falsify votes. Furthermore, the public sector can benefit from decentralized digital identification and transparent databases for keeping public records.
Medical records contain a lot of sensitive information so hackers realize the benefits they can get from stealing them. Thanks to blockchain, doctors, and patients can access protected storages that keep patients’ e-records safe. Payments and insurance compensations become simpler and faster with crypto, as well.
Likewise, insurance companies deal with personal data of clients and ensure that their money is safe. That’s why tamper-proof and transparent systems are necessary for underwriters. For example, they can use smart contracts to automate interaction between insurance providers and policyholders. Plus, blockchain platforms remove the need for middlemen.
This business involves numerous intermediaries which result in lengthy deal closing. Decentralized platforms can save tons of money and time for all parties. With perfect transparency, reduced human error, verified sellers/buyers, and digital interactions, real estate services can become more affordable and automated.
The supply chain services are transformed by decentralized systems greatly. For instance, there are blockchain-based tools used for verifying the identity of goods, fleet tracking, and analyzing customers’ behavior. These initiatives help to get rid of data redundancy and red tape as it becomes possible to track everything automatically within the blockchain.
As a conclusion, there is nobody that can predict how exactly blockchain and crypto will be used in a year or two, but there are a lot of brand new projects popping up in various industries. But one thing is true: if you are keen on innovations, consider implementing blockchain-based features in your business right now.