Blocksure Ltd is an InsurTech company building a distributed ledger platform for the insurance industry. Its focus is on Intermediated Insurance business and the principles underpinning the business are Simplicity – Efficiency – Resilience.
For more information on Blocksure Ltd, please visit our website.
Blockchain is a digital database containing information (such as records of financial transactions) that can be simultaneously used and shared within a large decentralized, publicly accessible network.
A more technical definition is that a blockchain consists of records (let’s call them “blocks”), which are linked using cryptography. This chain of blocks grows over time, as more transactions are added. Each block contains a cryptographic hash of the previous block, a timestamp, and of course the transaction data itself.
From this, we can observe the following properties. (As you read this list, reflect on how such properties could benefit your business.)
Data is immutable: if a malicious party tampers with a record (i.e. modifies an existing record) then it will be rejected by the network.
Irrefutability of transactions: data is signed by the owner of a private key. Nobody else has a copy of that private key, therefore, that solitary owner cannot later claim to have not authorised a transaction that had been signed with that key.
Distributed ledger technology (refer to our FAQ on that topic)
There is a connection between cryptocurrencies and blockchain, due to the early years of its development a decade ago and the subsequent Bitcoin phenomenon. Since then, blockchain has flourished across many industries with use cases across all value chains. Big names have been involved in building products across the globe including – IBM, BMW, Zurich, Allianz, Covea and many more are exploring opportunities.
Encryption is the process of converting information into an unreadable stream of data that can then be safely stored or transmitted without allowing unauthorised access.
Transactions run on a distributed ledger technology (DLT) network such as Corda are encrypted such that only the parties that are involved with them can see the data.
Distributed ledger technology (DLT) is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions.
Firstly, a key point is that data does not reside in a single, centralised database: instead, data is distributed across the nodes of the network. A peer-to-peer network is required as well as algorithms that define a mutually agreed approach for validating and accepting data, to ensure that data can be replicated across the nodes of the network.
Secondly, there is not a single, centralised administrator; therefore, network participants have the ability to manage their own nodes.
Blockchain is a specific type of distributed ledger technology.
A distributed ledger is a database that is shared and synchronised over multiple sites. The ledger contains records of contracts and transactions that have each been agreed by consensus. The consensus mechanism is based on a mutually agreed approach using defined algorithms that ensure that all data is validated and accepted at the time of transaction.
This means that transactions are simultaneously written to the ledger of each party to the transaction. The transaction details in each ledger are identical and provide a trusted record of the transaction. Each party to the contract can be certain that the records and balances they are looking at are always in agreement with the records of their counterparties. This eliminates the need for reconciliation between parties to a transaction.
When using a traditional ledger, each party maintains its own records of a transaction in their own ledger. While each ledger system may be internally consistent, they are completely independent and no party can assume that a counterparty has the same view of the same transaction. This means that statements issued by one party to another must be checked and reconciled before it can be agreed.
A node is the piece of software run by each participant of the network to share, verify and store transactions. In a simple Blocksure OS transaction involving a broker and insurer, both parties would have their own node.
Immutability means that a record, once written to the blockchain, cannot be edited without breaking the integrity of the chain. Each block refers to its predecessor by a digital key generated from its content. If the content of a block is changed, its digital key changes and it no longer can be referenced by the subsequent blocks.
Any attempt to edit a blockchain record is immediately detected by the system and rejected.
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