Frictions are good, but only in a very few cases. When it comes to human-driven decision making process they definitely bring value.. namely discussions, contradicting opinions and different ideas, eventually lead to even better outcomes. This is why I value blockchain communities = for their frictions. On the other hand, when it comes to economy or finance - frictions are are typically not desired factor - they lead to higher costs, lower efficiencies and delays in delivery. Probably we still need frictions and pressure here and there in the platform development process, as a necessary mean to build best in class solutions for frictionless finance or frictionless insurance.
The next killer app will be frictionless Dapp,
born thanks to frictions, not despite of them,
Lets see where are we heading..
Frictions in crypto ecosystems
Being part of many different crypto communities, blockchain associations and attending variety of crypto meet-ups, sometimes I feel the crypto world is a victim of self admiration. Meeting in our own sauce, being self-impressed with the amazing tech we are building. On one hand I really love these experiences - but the real value of meet-ups comes from people sharing different ideas, complementary or even opposite point of views, that eventually leads to even more advanced or robust products. Quite frankly, if we want this industry to advance faster and gain traction, we obviously need blockchain communities to collaborate, but even more we need these communities to challenge each other (more FRICTIONS) as a mean to improve. Too often I have seen projects presenting how great they are, while the truth is that greater world (yes - there is a world outside crypto) doesn't really care about crypto or blockchain, moreover outside world is often not even aware of blockchain industry .
To do the next step toward development of killer app, we need projects from different domains introduce a bit of internal frictions, sharing their products for feedback which will lead to new, breakthrough products, that will eventually matter to the real world. That is the path to killer app.
There are examples of blockchain communities and associations, that are actually helping to incubate better products. Boston Blockchain Association (BBA) is a community of innovators and entrepreneurs who are excited about the promise of blockchain technology, with mission to support, educate and advances blockchain technology. They want to establish Boston as an international hub for blockchain innovation and help connecting entrepreneurs with useful resources in this regard.
Recently two interesting companies cross they roads there at BBA. One being blockchain-oriented platform (Algorand) and the other one being Insurance Tech provider (Attestiv). They've decided to join the forces and build a cool tech together.
They are building an InsureTech product.
Will the combined effort matter more, than both playing single?
Breakthrough?
Lets have a look.
InsureTech : the next killer app?
What are we missing?
Well.. that is the $1B question, I don't know answer to - but I do have a strong opinion on what are the ingredients we are missing to get there. I think there are several major milestones on this road to full adoption (high level list below).
Providing that we live in a world where everything is connected to money or backed by financial infrastructure this or other way, its natural that first these fundaments need to be settled, before other innovations can be built on top. This is my helicopter view on the evolution of blockchain and crypto industry over the next decade:
- CryptoCurrencies are fully adopted, either the state-free money, CBDCs, corporate currencies or hybrid approach leads the way (click_here).
- UX/Infrastructure, security, wallets, scalability - all this needs to improve before we go any further.
- DeFi, CeFi, banking the unbanked, or whatever you're gonna call it, people need to migrate there, millions of people.
- Insurance apps, retirement plans, benefits and other financial products - will be a next big step, especially in developing markets.
- Time, time time.. yes.. adoption needs time..
- Frictionless Supply Chains, giving traceability, interoperability and transparency to the legacy systems.
- Self-Sovereign identity solutions, privacy challenges being addressed with blockchain and tokenisation.
- Time, time time..
- Blockchain interoperability comes into play at scale, decentralised bridges between decentralised networks.
- Tokenization of virtual world items and its virtual assets (gaming, VR, virtual media)
- Time, time time..
- Tokenization of real world assets (real estates, securities, art, personal profiles, etc.)
- Time, time time..
- Time, time time.. Yes.. it takes to to fully change mindset from real-world to virtual world.
- Democratisation of AI, super-brain on blockchain, at this stage AI will either be a centralised nightmare or will be democratised.
- Time, time time.. We are somewhere between 2030-2040
- Full blown IoT enabled, all machines talking and exchanging values without human interaction.
- Truly Decentralized Organisations, new approach to run enterprises and corporations and maybe even nation-states.
Obviously there might be more steps needed on the way and the initial crypto/defi/InsurTech products will improve as we move forward, but undoubtedly we need to build solid layers first, with well designed and overthought financial products, insurance services, banking services and cryptocurrencies, before we go any further - surely some killers apps are yet to be built in these categories over the next years.
The first major step is reducing frictions in financial infrastructure, and it will be an enabler for future applications of blockchain, opening gates to use cases and revolutionary solutions in supply chain industry (digital supply chains, 3D printing).
I think as we move forward, we will see different platforms finding their niches in specific domains, and further innovations and killer apps will have to wait for blockchain interoperability to come through. Once blockchain platforms start exchanging values, data and logic, we will be able to leverage functionalities from N different blockchains, and build cross-blockchain Dapps. This will trigger expansion of uses-cases for blockchain which are hard to imagine today.
This will also stimulate liquidity to the industry, help tokenising everything else, like real estates, securities or even personal profiles.
At some point.. AI will be inside of every device, and will be (hopefully) democratised. Decentralised AI platforms will become interoperable with greater blockchain networks, this will boost more advanced applications to see the light. This will also help the original killer apps in banking, insurance or supply chain to get to the next level.
Ultimate goal is Decentralized Network of Everything, Real World Assets, Financial Assets, Transporations/Logistics..
FrictionLess Economy becomes a Reality.
Before we get there - we have at least a decade or two ;)
I will not dare to name specific project or undertaking that would become dominant in particular category, it is yet too early, but certainly some platforms like Algorand are well positioned to play an important role building this borderless economy, and might have a say in a few of these categories, like finance, CBDC or Insurance.
So lets have a look at the InsureTech application by Algorand and Attestiv.
Attestive + Algorand = InsureTech product
Attestiv is building a technology stack to enable digital transformation across the insurance industry, addressing th opportunity to reduce P&C insurance fraud (estimated at over $40B - in the US alone)
Attestiv’s core technology enables digital media (photos, videos, and documents), sensor data, metadata to be validated using their AI technology either at the point of capture or via advanced forensic analysis. Once media is captured (for example after car accident happened) , it becomes tamper-proof via a “fingerprinting” process, a unique representation of the digital media asset, similar to a human fingerprint, that can identify future changes or alterations, making respective digital medial impossible to be modified, unnoticed. These fingerprints are then stored onto the Algorand blockchain to ensure the data has not been altered from its original form.
Attestiv has done quite in-depth research, eventually choosing Algorand as the underlying blockchain platform.
“We are excited about our new offering and have selected Algorand because of the enterprise-level scalability, security, and economics that meet our customer needs. For us, being able to build our next-generation of insurance offerings on a robust, public blockchain platform that is easy-to-use and offers an extensive set of features for future enhancements is a huge plus” / Nico Vekiarides / Attestiv
How It works and How does blockchain help here?
The Attestiv technology makes extensive use of AI technology to preserve authenticity and integrity of important media and data. Attestiv’s core business is to provide immutable information about digital data, which can be photos, videos, documents and more.
One of their products : Self-Service Inspection App works the following way => 5 steps.
#1 Capture
Capture digital media files like images, video, documents or data from mobile devices, body and car cams, drones, surveillance systems, or legacy media libraries through the Attestiv mobile or web app or API.
#2 Import
Attestiv can import existing media assets originating from a trusted source or that have undergone forensic analysis to determine the presence of tampering or alterations. Unlike authentic capture, imported assets are identified with an import tag, indicating their last known origin as well as forensic analysis.
#3 Fingerprint
Attestiv uses the media data and metadata which may include timestamp, photographer ID, device ID, geographic location, and weather to create a secure fingerprint. This fingerprint becomes a unique representation of the digital media asset, similar to human fingerprint and can identify future changes or alterations.
#4 Store (Blockchain)
Attestiv stores the fingerprint in an encrypted, tamper-proof format on a blockchain distributed ledger. The photos and videos do not have to be stored with the fingerprint and are generally vaulted separately; you can keep them private and prove authenticity any time in the future using Attestiv as a privacy silo.
This is where the Algorand blockchain comes in as these digital data are stored within the blockchain to provide an additional level of immutability of information; moreover, by exploiting this blockchain you have management costs that are incredibly lower when compared to other blockchain or traditional methods.
#5 Validate
Real-time verification informs viewers of the digital media whether the image or video is authentic, imported or has been altered. Attestiv uses AI to help verify; it can confirm a photo or video is valid even if it has been re-saved in a different format or resolution
In general blockchain can help to eliminate many redundancies in the gathering and maintenance of records in insurance.
This already sounds interesting, but in my opinion - it is nearly the first step on a much longer highway towards application of blockchain.
I think we must see blockchainization of artifacts, media, documents and other real world assets first, then democratisation of AI and interoperability of various chains and decentralised networks, to make such use cases like the Attestiv/Algorand product even more exciting. It all comes to removing frictions between virtual world, world of money, real world items, and how data and signals flow in these ecosystems.
Algorand - big picture
Lets very briefly introduce Agorand, helicopter view, if this is the first time you hear about this project. Algorand was founded by MIT professor Silvio Micali, who is Turing Award winner, respected authority in the cryptography space. He has built a strong team, vastly Boston based, and apparently they have managed to address the challenge of how to make blockchains fast x secure x decentralized at the same time.
The Algorand Mainnet has been live since mid 2019. Algorand is an open, public, decentralized network, operating under unique consensus protocol, called pure-proof of stake, with set of features, like Smart Contracts, Algorand Standard Assets and Atomic Transfers (important: they are implemented on Layer-1) Recently they have introduced private and public chains interoperability, known as Co-Chains.
I have covered their core functionaries in several articles, including the most recent extensions coming along with Algorand 2.0 and their private and public chain interoperability features, so here are the links to more in depth information - if you want to learn more. Algorand is pretty advanced platform already:
- Algorand 1.0 and 2.0 = features
- Algorand as a DeFi Platform
- Algorand co-chains = interoperability
What is the bigger opportunity here for InsureTech
Collaboration of Attestiv and Algorand represents the beginning of a transformation in the insurance industry to enable trust, automation, and new levels of customer experience. By initially leveraging the immutability and sharing attributes of the Algorand blockchain, insurance stakeholders ranging across insured, agencies, carriers, repair vendors and public safety, can benefit from a single system that validates assets across parties, removing unnecessary redundancies and reducing the risk of fraud. As the time goes by, the addition of smart contracts can bring even further automation and efficiencies there, transforming the industry as we know it. Friction.less
I have explained a while ago in one of my videos, how I particularly see the insurance industry, levering interoperability of various protocols in this space. This is a polish version (English version of the video coming soon)
In general I think we will see blockchains and cryptocurrency projects finding their niches and building a critical mass of users in respective domains, to become the go-to-platform "per use case". At some point, to enable even more innovations and boost the crypto revolution even further, we will need them to be connected and interoperable.
Friction-less ecosystems like the one being built on top of Algorand, will trigger entrepreneurs to come up with next moonshot ideas, which are hard to imagine right now, but the steps we are making today, building apps like the one on top of Algorand for InsureTech, are necessary to open the gates for more advanced and sophisticated applications later on, when the whole ecosystem matures.
Lets play for a while.. and try to imagine how the insurance industry could evolve over the next decade.
InsureTech = FrictionLess + Liquid + RealTime
who knows... maybe even FAIR... (?)
- being the "Insured" I can imagine that my "trust score" will be calculated real time, and depended not only on my history but also on my present behaviours (driving too fast, not eating healthy, meeting people tagged as "risky group", smoking, being in the wrong place at the wrong time ) as well as predicted behaviours (scary part.. AI comes into play here, and I could be down-scored for example because similar profiles like mine typically die young ;)
- So eventually what I did, what I do, what I plan to do, or what AI think I plan to do, will trigger realtime adjustments to my insurance fees, all happening real time.
- Insurance systems in the future will be much more liquid, and will charge my account real time, automatically deducting cryptos from multi-wallets
- Whether am doing risky things, or if am behaving well, I might be paying for particular insurance service 0.00001 tokenX / min (if am a low risk client), or maybe even up to 0.01 tokenX / min (if am bungee jumping too often :)
- Access to real data from IoT, smart-watches, social-media platforms, geo-location data, and who knows.. maybe even data from implants = all this will be analysed real time by AI agents, checked for validity and authenticity => and will immediately impact my fees for such a service.
Theoretical example, of my daily fees, calculated real time.
What's next?
This is both fascinating and scary.
The way we build the infrastructure today, will define our future. We will be either super happy people, earning and spending in frictionaless way, or we will be enslaved by the big Corporations and Govs, influencing what we can do and what we cannot do, being in control of the switch-off button of your bank account and controlling your ability to travel, speak and express yourself.
Just take the CoVid situation as an example - fast forward how this pandemic could look like in 2030:
- Govs could decide to turn off your bank account, if you are leaving your home during pandemic.
- Your insurance fees jump 100x if you leave Zone XYZ.
- Your insurance fees are rising 10x, if your body temperature goes above 38C
well.. hopefully that is just my imagination :)
Coming back to reality - we are building this future right now!
Communities should create frictions. Democratisation of decision making process should eventually lead to better solutions.
The more debate the better. Don't rush. Let's do it right in the first place. Bitcoin is the good example how to develop a secure protocol.
Whoever is involved in building these crypto technologies - make sure you are building it the right way. Democratized way. Inclusive. Fair.
Engage - Algorand gives multiple ways you can contribute there.
Visit sites of Algorand Foundation or Algorand Poland
Under Pressure - this is how Diamonds are truly formed.
