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INTRODUCTION TOBLOCKCHAIN
INNOTECH FOR BRANDING – JOURNEY TO OUTSTANDING BRAND
Hong Kong Blockchain Society
SmartBiz Expo 7 December, 2018
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TODAY’S TOPICS
What is Blockchain
•
Use Case & Applications
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What is Blockchain • Use Case & Applications
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BLOCKCHAIN ≠ BITCOIN
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Bitcoin uses
blockchain
Blockchain has uses
beyond money
What is Blockchain • Use Case & Applications
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BRIEF HISTORY OF BLOCKCHAIN
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1988 20092008
Subprime Crash
Governments bail out
the “Too Big to Fail”
Cypherpunks: personal privacy protection
1980s 1990s 2000s
What is Blockchain • Use Case & Applications
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BRIEF OVERVIEW OF BLOCKCHAIN TECH
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Shared ContractCryptographyShared Ledger Consensus
Ensuring secure,
authenticated &
verifiable
transactions
Business terms
embedded in
transaction
database &
executed with
transactions
All parties agree to
network-verified
transaction
Append-only system
of record shared
across business
network
Broader participation, lower cost, increased efficiency and transparency
What is Blockchain • Use Case & Applications
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RECONCILIATION PROBLEM
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What is Blockchain • Use Case & Applications
1.Everyone has their own records
2.Duplication leads to inconsistencies
3.Reconciliation is continuous
This is costly and error-prone
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CENTRALISED DATABASES
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What is Blockchain • Use Case & Applications
Who runs this?
Is it even scalable?
What jurisdiction(s)?
How is it governed and
managed?
Problems with a
Centralised Database
Approach
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D E F I N I N G C H A R A C T E R I S I T C S O F B L O C K C H A I N / D L T
PRIVACY AND MUTUAL VERIFICATIONFacts and shared only with those directly
transacting together, and verification
consensus is achieved between them only
“I KNOW THAT WHAT I SEE IS WHAT YOU SEE”Records of shared facts and commercial
agreements are consistent across entities, and
enforceable through a legal framework
IMMUTABILITYAll transactions and ledger records are
chained together cryptographically to assure
lineage and resistance to tampering
SMART CONTRACTSLedger updates are controlled by business logic,
encapsulated and executed in a deterministic,
tamper evident manner
WHAT IS BLOCKCHAIN?
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IN SUMMARY…
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What is Blockchain • Use Case & Applications
Blockchains [and DLTs] enable parties
who don’t fully trust each other
to form and maintain consensus
about the existence, status, and evolution
of a set of shared facts
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011
D I F F E R E N T B L O C K C H A I N / D L TWHAT IS BLOCKCHAIN?
Public
Private
PermissionedPermissionless
Access
Validation
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BLOCKCHAINwill not destroy
OLD JOBSbut rather shift them into
NEW JOBS
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What is Blockchain • Use Case & Applications
Credentials Reference Check
Credentials include:
• Attendance and completion of the Programme
• Academic Transcript
• Graduate Certificate
• Awards
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What is Blockchain • Use Case & Applications
Current Reference Check Process Issues
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Issuer (College)
Credential Holder (Student / Job Seekers)
Enquirer (Employers / Agencies)
• Repeated requests from
Employers/Agencies
• Large volume of request within
a short period of time
• Long-term storage needs
• Time-consuming process
• Manual retrieval of credential
records
• Time-consuming process
• Manual process
• Concerns on credential’s
authenticity
What is Blockchain • Use Case & Applications
Benefits of Decentralized Credential Verification
• Verified Once ! You own your Credentials !
• Provable
• Permanent Immutable Record
• Connect to the World
• Secured and Privacy Preserving
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What is Blockchain • Use Case & Applications
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Potential
Potential
use cases
Potential
use cases with
smart contracts
Key benefits
Product
development and
distribution
Pricing /
underwriting
Payment &
collectionsClaims
Policy /
administration
and back
offices
Risk capital &
investment
management
• Use DLT as a reliable
registry for on-
demand / usage-
based insurance or
micro-insurances
• Using DLT as payment
infrastructure
(especially across
multiple countries)
• Leverage DLT for
information about
insured goods and
events in order to fight
fraud
• On boarding of new
customers and
verification of policy-
holder identity using
DLT
• Make data available for
re-insurers or other
parties in a controlled
way
• Offer P2P
insurance via DLT
for customers to
customer
promotion and
sales, and
automated ops with
smart contracts
• Use DLT for P2P
insurance
underwriting, include
external data, smart
contacts and peers
(human) to determine
tariff
• Automate payments
through smart
contracts evaluating
conditions for paying
out claims
• Automate claims
triggering and handling
with smart contracts,
and e.g., with sensors
(IOT)
• Use smart contracts to
automatically
determine payouts –
e.g. triggering process
of catastrophe swaps
and bonds
• Reduce cost
related to
commission and
sales and
operations
• Increase trust of
customers due to
open, distributed
system
• Reduce cost of
operations
• Re-use platform for
other types of
insurances
• Include external data
for (semi-) automatic
pricing
• Reduce cost and
increase speed for
payments
• Reduce average
claims cost related to
1. Claims administration
2. Damage from
multiple claim fraud
and fraud detection
• Improve identification
of claim events
• Reduced admin cost
and speed-up process
for onboarding
• Reduce admin costs
• Automate and increase
reliability auditability
and speed for financial
instruments
transactions based on
defined events
B L O C K C H A I N H A S P O T E N T I A L I M PA C T A C R O S ST H E W H O L E VA L U E C H A I N O F I N S U R A N C E
What is Blockchain • Use Case & Applications
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CURRENT CLINIC CLAIM PROCESS
What is Blockchain • Use Case & Applications
1.Insurance OwnerGoes to clinic & submits personal information & payment.
2. ClinicClinic provides patient with invoice , diagnosis & medical certificate, and receives payment.
3. Company HRHR collects insurance claim form from employee. Sends batched documents to I.C at the end of a month.
4. I.C Claim DepartmentPuts all paper work through verification process. Accepts or rejects claims.
A lot of paperwork
accepts dispute
Verification process
Long Manual Claim Process Multiple Claim Fraud
Proof of Identity Issue Over Claim Health Record not portable
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accept
PATIENT CLINIC INSURANCE COMPANY POLICY
1. Patient opens mobile
app, submits medical &
insurance info to clinic.
2. Patient receives treatment,
clinic prepares claim template
with billing information.
3. Patient and insured
employee (for group policy)
digitally signs claim & billing
information.
5. Receives claim, request
policy information from policy
oracle.
6. Use smart CorDapp to
check if claim is valid
7. If claim is valid,
automatically approved &
status is updated for the
patient & clinic.
reject 9. If claim is invalid, patient
can raise dispute to the
regulator.
BENEFITS TO INSURANCE COMPANY
Reduces
Manpower
Automate
Claim Process
Reduces Paperwork
& Due Diligence
Reduces
Fraudulent Risks
4. Clinic submit claim
to insurance company
via CorDapp .
8. If claim amount
exceeds billing
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8a. Patient can claim
with another
insurance policy,
process restarts &
new claim is created 8b. Patient bares the
exceeded amount
FUTURE STATE & BENEFITS
What is Blockchain • Use Case & Applications
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• Scarcity of blockchain talents is still a major challenge of the industry
- HKBCS is working with universities in HK, China and Malaysia to offer blockchain certified and credit courses
- HKBCS is working with Cardano on a global Blockchain Hackathon for both professionals and students
• The time line of commercial adoptions of blockchain technology- Is it 3 to 5 years from now or a decade from now?
• Privacy will be a big challenge for blockchain practitioners; especially for permissionless chain- EU’s GDPR and various privacy initiatives in US, China, Japan, Hong Kong and others.
• Realization of the importance of Self Sovereign Identity and the concerted efforts by a few parties to implement this using blockchain and cryptography.
• Convergence of Blockchain with Big Data, IOT
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What is Blockchain • Use Case & Applications
LOOKING AHEAD