The friction is good, but only in a few cases. When it comes to the decision-making process that people take part in, they definitely pay off. Discussions, conflicting opinions and different ideas usually lead to even better solutions. For this, I value the blockchain community for friction and for the "pressure" to which individual solutions are subject. This is how diamonds are born. On the other hand, when it comes to IT platforms, networks or financial systems - Friction is usually not a desirable factor - lead to higher costs, lower efficiency and delays in the transfer of funds. So most likely - to build a solid, liquid financial or insurance system, devoid of internal frictions, in the creative process, in development, we must be sufficiently self-critical, generating pressures and pressures that will build an even better foundation for blockchain and its applications.
The next groundbreaking application built on blockchain (aka Killer App) will arise due to friction.
Let's take a look - where we're going.
Friction in ecosystems
Being part of many different communities krypto and blockchain, by participating in various meetings or meetups, sometimes I have the impression that the crypto world is falling prey to auto-delight. We meet in our own sauce, being impressed by the amazing technology we create. On the one hand, I really love these experiences - but the real value of meetings comes from people sharing different ideas, complementary or even opposing points of view, which ultimately leads to even more advanced and groundbreaking products. If we want this industry to grow faster and gain adoption, then of course we need cooperation between projects, but I think even more we need communities and projects in the blockchain area to raise the bar for each other, constructively, complementing your ideas. I've seen projects and platforms too often blockchain boasting to each other, while when the truth is that the so-called "greater world" (yes - there is a world beyond crypto 🙂 he is not even aware that such an industry exists, and what can we say about complicity in this digital revolution based on the tokenization of everything that surrounds us.
To make another milestone on the road to mass adoption, we need projects from different domains and branches that will introduce some internal friction, opening our current platforms (but also horizons of thought) to interaction and constructive criticism.
Fortunately, there are quite a few examples of blockchain communities and incubators that actually help new products hatch by joining forces from many industries. Boston Blockchain Association (BBA) is a community of innovative people and entrepreneurs who want to establish Boston as an international "Blockchain Hub" - helping to connect entrepreneurs from many areas with a wider range of competences and products, releasing Blockchain and cryptocurrencies into wider waters.
That's where the paths of two worlds crossed. Algorand i.e. blockchain oriented platform, and Attestiv i.e. a technology provider for the insurance area, focused on the use of artificial intelligence in this industry. These two companies decided to join forces and build something interesting together.
Together, they build a product in the area of InsureTech (InsureTech is the right FinTech, only in the insurance industry, not finance :))
Let's look at these works, in particular whether the combined forces will have a better chance than each of these platforms playing separately.
Is InsureTech the next Killer App for Blockchain?
What are we missing on the road to building the Killer App?
Well ... that's a billion dollar question that I don't know the answer to - but I have a strong opinion on the steps and the parts we're missing to get there. I think there are some big milestones ahead of us on our way to universal adoption - I'll discuss them below.
We live in a world where everything is connected with money and financial infrastructure in one way or another, which is a kind of main line for all other businesses. It is natural, therefore, that building infrastructure for decentralized solutions must first also build these financial foundations before other innovations can be born on this basis. Here's my general point of view, what steps we must go through over the next decade:
- Strengthening the position of cryptocurrencies (or digital money). Regardless of whether we evolve here towards country-independent money, or maybe CBDC (digital currencies of central banks), or towards corporate currencies or what kind of hybrid approach - this step must take place and individual solutions must be matured and consolidated. I have posted a little more on this topic here, especially in the context CBDC.
- UX / infrastructure, security, wallets, scalability all need to be improved before we move on. All users for whom the current (high) technological entry threshold was not a problem (you probably belong to this group :)) are already here. New users need something more convenient than what the bank or other institutions give them to consider a change.
- DeFi, CeFi, banking without a bank or whatever we call it, this trend is certainly far from its peak. We need millions, hundreds of millions of new users who will start using this new, decentralized (or semi-decentralized) banking infrastructure on a daily basis.
- Insurance applications, retirement plans, social benefits and other financial products will be the next big step that will catch the wind in your sails.
- Time, time, time ... yes ... adoption needs time ... 🙂
- Digital supply chains , ensuring transparency and interoperability, will be a kind of global network of neurotransmitters in logistics.
- Digital identity in our handsaddressing the problems of privacy, the problems of the history of our virtual self, their impact on our real life, finances, insurance, perhaps generating profit for us, due to the conscious sharing of part of our digital life with third parties.
- Time, time, time ...
- Blockchain interoperability eventually it becomes important and plays a key role in further adoption. Decentralized bridges between decentralized networks mean that individual blockchaines that provide narrow functionality will be connected to other networks to achieve completely new business models.
- tokenization items from the virtual world and its virtual resources (games, VR, virtual media). This large-scale virtual world is much faster tokenized than the real world, because it is not that one leg is many years ahead vs the material / real world.
- Time, time, time ...
- Tokenization of assets, items from the real world (real estate, securities, art, cars ...)
- Time, time, time ... Yes ... a lot of time. It is necessary to completely change the way we think about the world around us. We'll start to see everything in digital or virtual terms.
- Democratization Artificial Intelligence, the super-brain on blockchain will be the reality of everyday life (at this stage, the AI will be either a nightmare managed by a small group of organizations, or it will undergo democratization)
- Time, time, time ... We are somewhere in 2030-2040
- A fully functioning Internet of Things (IoT), all computers talk and exchange values without human interaction. It can be said that technology is slowly beginning to do everything for us, perhaps taking over the dominant role.
- Truly decentralized organizations (DAOs), a new approach to running businesses and corporations, and maybe even states, will start to be one right choice at this point. Again - I hope that we are talking about a democratic approach to DAO, and not organizations run by AI which, in one way or another, are controlled by a small group of people.
Of course, the above steps are just an outline, other steps may be needed along the way, or other paths may appear. Probably also those initial DeFi products and applications that we know today will improve over time, but undoubtedly we must first build solid base layers with well-designed and well-thought-out financial products, insurance services, banking services and cryptocurrencies that are in wide use. before we go a step further. Certainly a lot of Killer Apps will appear on this path over the next years.
The first, important step will be to reduce friction in the infrastructure of decentralized finances, which will open blockchain for further applications, open the gates of improvement and perhaps revolution in supply chains (digital supply chains, 3D printing), which in turn will pull the entire economy and models based on it business to a whole new level.
I think that as time goes by, we'll see how different platforms find their niches in specific areas, and real innovations in business processes may have to wait just for the advent of blockchain interoperability.
When blockchain platforms start exchanging values, data and logic, we will be able to use functions from N different networks and build Dapps running cross-blockchain, drawing from every decentralized network what this has the best to offer. This will extend the use of blockchain to areas that are hard to imagine today.
Interoperability also positively stimulates liquidity in individual networks, which will help effectively tokenize everything that surrounds us, such as real estate, securities and even personal profiles.
At some point… the AI will already be inside every device and (hopefully) it will be a democratized AI. Decentralized AI platforms will become interoperable with blockchain networks, which will open up new opportunities within these platforms. It will also help those first apps built on blockchain today, in the area banking, DeFi, dedicated networks for supply chains, etc .. to enter the next level.
The final point to which we are heading is a decentralized network that covers almost everything from the real and virtual world, which operates autonomously, is powered by AI, and in which the human factor plays a secondary role. This is the moment when
FrictionLess Economy is becoming reality.
Before we get there though - we have at least a decade (or two)
At this point it is definitely too early to name the winners, specific projects or platforms that would become dominant in a given category, but certainly some of the current solutions, such as blockchain Algorand, are in a good position to play an important role in building this economy without borders and may have something to say in one or more of the categories listed, such as finance, CBDC or insurance.
After this very long introduction, we can finally look at InsureTech built Algorand i Attestiv. The introduction was important to understand not only what is being built today, but above all the direction and potential of how InsureTech may look at the end of the decade, when these transformations in other areas will occur.
Attestive + Algorand = InsureTech product
Attestiv builds technology that is to enable digital transformation in the insurance industry, allowing, among other things, to address the problem of insurance fraud (area estimated at over $ 40 billion - in the United States alone)
Attestiv technology allows checking the correctness of digital multimedia (photos, videos and documents), sensor data and various metadata, using the AI solution, in real time, or using advanced forensic analysis, post-factum.
The data related to the insured event is processed by the Attestiv platform and made resistant to manipulation thanks to the "fingerprint" process, which is a unique representation of media resources. Thanks to this, we are able to detect future changes in a given resource, which makes the manipulation of media once tested (by AI) becomes impossible. The tags of such data are then stored on the blockchain in the form of a hash. Blockchain ensures that the data will not be altered from the original form.
Attestiv has conducted quite thorough research, ultimately selecting Algorand as a platform blockchain .
"We chose Algorand because of the scalability, security and costs that meet the needs of our customers. The ability to build our new generation insurance offer on a solid, public blockchain platform that is easy to use and offers a wide set of features for future extensions is a huge plus ”/ Nico Vekiarides from Attestiv
How does it work and how does blockchain help here?
Attestiv extensively uses AI technology to check the authenticity and integrity of media and data that are important for insurance.
One of their products is an application for self-inspection of the damage in question, and it works as follows.
# 1 Capture
We capture video images, documents or data from mobile devices, car cameras, drones or monitoring systems. The data is saved manually via the mobile application or automatically and is fed to the Attestive via the API interface.
# 2 Importing
Attestiv can import existing media resources from a trusted source, or those that have been subjected to forensic analysis to see if they have been manipulated.
# 3 fingerprint
Attestiv uses data and metadata, which may include a time stamp, photo ID, device ID, geographical location and weather, to create a secure fingerprint for a given object. This fingerprint becomes a unique representation of a media resource, similar to a human fingerprint, and can be used to identify future changes to a given resource.
# 4 Storage (Blockchain)
Attestiv stores the mentioned fingerprint in an encrypted format, protected against manipulation thanks to the possibilities offered by blockchain. The photos or videos themselves do not have to be stored with the fingerprint and are usually stored in a different, safe place. In this case, you can maintain the necessary security and privacy, while proving the authenticity of the resource at any time.
This is where Algorand's block chain comes into play. Digital data is stored in a block chain to ensure its immutability and public verifiability. In addition, by using Algorand blockchain, we get low operating costs (compared to other blockchains).
# 5 Approval
Verification takes place in real time, and we immediately receive information whether the image or video is authentic or has been changed. Attestiv uses AI for verification; can confirm that the photo or video is authentic even if it has been saved again in a different format or in a different resolution.
Basically, blockchain can help eliminate duplication in collecting and keeping records for the insurance department.
It sounds interesting at this point, but in my opinion - this is just the first step on a much longer path that future use cases for blockchain follow.
I think that we must first see blockchainization (hmm ... maybe one day such a word :)) of the media, documents but also other resources of the real world. Then democratization of AI and interoperability of different block chains and decentralized networks, so that use cases like Attestiv / Algorand can get an even more exciting dimension. Everything is about removing or minimizing friction between the virtual world, the financial world, objects from the real world and the flow of information in these ecosystems.
Algorand - in a nutshell
Well, maybe a few words about the blockchain itself. If this is your first time hearing about Algorand, then maybe this information will be of interest. Algorand was founded by Professor MIT Silvio Micali, winner of the Turing Award, authority in the field of cryptography. Silvio Micali built a strong team (mainly in Boston) and maybe they were able to address the challenge of how to make the block chain quick + bezpieczny and at the same time decentralized .
Mainnet Algorand was launched in mid-2019. Algorand is an open, public, decentralized network, operating on the basis of a unique consensus protocol, called Pure Proof of Stake, with a set of functionalities such as smart contracts, Algorand standard assets and atomic transfers (important: these functions are implemented on layer-1). Recently, Algorand has also introduced the interoperability of private and public chains, known as Co-Chains.
I discussed their main functions in several articles, including the latest changes they introduced with Algorand 2.0, as well as the interoperability function for private and public chains, so below I will put links to more detailed information in this topic if you want to learn more. Algorand is already quite an advanced platform:
- Algorand 1.0 and 2.0 = functions
- Algorand as a platform DeFi
- Algorand common chains = interoperability
InsureTech in a few years?
Cooperation between Attestiv and Algorand provides the beginning of transformation in the insurance industry, to ensure automation and a new level of customer service in a way that increases security. You have to start somewhere. Using the invariability and sharing of resources thanks to the Algorand blockchain, various parties in the field of insurance, such as the insured, intermediaries, repair services, or public organizations can use a single system that compares and checks shared resources between different parties in this process, removing unnecessary delays and reducing the risk of fraud. Over time, adding smart contracts can bring even more automation and efficiency throughout the entire cycle, changing the industry we know today.
Some time ago I explained in one of my films how I see the insurance industry in a few years, when we see the interoperability of various protocols in this space, and the maturing of the entire blockchain and cryptocurrency area.
Below a short video in this topic.
In general, I think that individual blockchain platforms will find your niches and build a critical mass of users in their domains, the platforms that are most optimized for a given use case will start to dominate. At some point, when we get their interoperability, it will enable even more innovation and accelerate the cryptocurrency, blockchain, AI revolution even more.
Ecosystems built on the basis of such platforms as Algorand, Open Application Network Rootstock or Cosmos will cause that entrepreneurs will come up with more unusual business models, that we can hardly imagine today, but the steps we are taking today to create these primitive blockchain-based applications are necessary so that the gates for more advanced and sophisticated use cases can evade.
Let's play a fortune teller for a moment and try to imagine how the insurance industry can evolve over the next decade.
InsureTech = Friction-Free + Liquid + RealTime
who knows ... maybe even the RIGHT ... (?)
- As an "Insured" person, I can imagine that the "risk level" assigned to me will be calculated in real time and will depend not only on my history but also from mine present behavior (driving too fast, not eating healthy, meeting high-risk people, smoking, being in the wrong place at the wrong time, etc ... horror ...) and anticipated behavior (artificial intelligence is at stake here, which, for example, can increase my risk level because people with my behavior are thought to live too short) (although here I hope the system would increase my score just because I eat a carrot and I run a lot 😉
- As a result, what I did, what I do and what I plan to do (or what AI thinks I plan to do) will result in adjust my insurance fees in real time.
- Insurance systems will be much more in the future smooth and they will also charge my account in real time, automatically charging fees (digital currencies) from my multi-wallet every second.
- Depending on whether I do risky things or if I behave well, I will pay for a specific insurance service every second. How much? 0,00001 TokenXYZ / sec (if I sleep safely at home), and maybe even up to 1 TokenXYZ / sec (if I'm doing a bungee jump)
- Real-time access to data from IoT, smart watches, social platforms, geolocation data and who knows ... maybe even implant data = it will all be analyzed in real time by AI systems , checking the information for authenticity, seriousness and impact on me => this will also immediately affect my fees for this or that service.
A theoretical example of my daily insurance costs, calculated in real time, could look like this:
Will it be fascinating or scary?
The way we build this infrastructure today will define our future. We will either very happy people earning and spending money smoothly and effortlessly, or we will stay enslaved by large corporations and governmental institutions, influencing what we can and cannot do by controlling the switch-off button, who knows to which systems ...
Let's take CoVid as an example scenario. What would it look like in 2030?
- The system can decide about disabling your bank accountif you leave the house during a pandemic.
- Your insurance fees will increase 100 times if you leave the XYZ zone.
- Your insurance fees will increase 10-fold if your body temperature rises above 38 ° C
well… I hope it's just the dark side of my imagination 🙂
Coming back to reality ...
we are building this future now!
Friction among communities and organizations building these solutions is a good thing. Democratizing the decision-making process usually leads to better solutions.
So, let's not rush to build fast blockchains. Let's do it in a prudent, decentralized, democratic way (Bitcoin is probably a good example here).
Whoever is involved in creating these technologies today, it is better to make sure that what they build today will also serve a plus in 10 years.
Fast Profit Today vs. Freedom in 10 years.
And if you stand to the side and watch these phenomena so far, then consider get involved :: Algorand gives a lot of possibilities in this topic. Other ecosystems also create such options. I talk a lot about it on my YouTube channel.