Cryptocurrencies are the future of online financial transactions. Bitcoins are the most popularly traded cryptocurrencies, although a lot more exist. Over 15 million bitcoins are in circulation. The maximum number is 21 million, and this will be achieved by 2140. Presently, many online retailers and companies accept bitcoins as a form of payment. These include Expedia.com and Shopify stores.
Insurance companies have had to incorporate bitcoin payments. This is because the technology allows for quick 24/7 transactions with very high levels of transparency. All the bitcoin payments are recorded in an open ledger that can be accessed from any place in the world.
The technology behind cryptocurrencies is referred to as blockchain. A transaction of bitcoins involves a public ledger that grows over time as more currency is traded. Also, payments are recorded in chronological order. The chain includes the first and last bitcoin transaction made, and this helps to avert fraud and theft. Because of the nature of blockchain technology, the transactions cannot be altered or deleted, and this reinforces their security.
Bitcoin Transactions for Insurance
Using bitcoins to pay for insurance makes the transactions trustless, and they can, therefore, be done without going through a third party. Users can also be sure that the commands will be executed exactly as specified in the protocol, and this means they don’t need to bother involving a third party.
In addition, insurance companies and their clients can have confidence that their transactions will be secure from malicious attacks. This is because the transactions are decentralized and can be accessed from any device. Blockchain technology is, therefore, better prepared for malicious attacks.
This is great news for companies in this sector, especially considering the fact that 85 percent of the population is not satisfied with their present insurance digital experiences.
This is another factor that is driving insurance companies to integrate bitcoin payments. Transacting through the bank can take many days. This is not the case with bitcoins. Transactions are made immediately and can be done at any time of day or night. Even digital bank payments experience lots of delays often, especially if done during weekends. Bitcoins can be transacted on any day of the week, and even during the biggest international holidays. So, that is instructive of how insurance will be changed by bitcoin technology for the better.
This is, especially important to insurance companies because of the dramatic changes occurring in the industry. Currently, insurance companies are providing services over the internet. All you need to do is answer a few questions before you quality for the insurance. The entire process could take just a few minutes, including the processing of payment through blockchain technology.
The companies are targeting millennials with services such as renter’s insurance. All sorts of items can now be insured through simple online processes.
Shared Economy Insurance
Technology brings its own challenges, and it still helps to solve the same problems. Modern technology has led to the creation of shared economy companies such as Uber and Airbnb. The problem arose when the companies couldn’t figure out how to insure the owners of the actual property, plus clients. Insurance companies have policies against renting out homes that are under their guarantees. This led to even further confusion.
Thanks to bitcoins, the cover can be obtained by the owners of the property whenever they offer their services. For example, a person renting out their home to strangers through Airbnb can apply for temporary insurance over the internet. The same goes for Uber drivers. Whenever the vehicle is used as a taxi, the driver can apply for insurance, and this ends after the shift. This requires quick processing of payment on any day of the year, and bitcoin can do this perfectly.
Bitcoins and blockchain technology are transforming industries. The insurance sector has a lot to gain from this technology, given the changes occurring in the sector. Many people will appreciate a seamless insurance service on the internet. With this technology, people will be able to get free insurance quotes, and make the payments in a minute without having to step out of their houses.
by: Dennis Hung