Bitcoin and its possible Impact on Insurance

Bitcoin and its possible Impact on Insurance

Posted by BANKUS on April 04th 2018


Many technological strides have been made over the last decades. Advancement in technology is becoming faster as many technologies are improving on work efficiency, communication, and even on financial services. Technology has brought the world closer; we are now able to communicate to relatives and friends across the globe without having to spend money or wait for a long reply. International financial transactions have also become more straightforward and cheaper.

One of the significant technological trends in the financial area was the invention of bitcoin. Bitcoin is a new type of digital currency which can be used in financial transactions without the need of a middleman (usually banks). Bitcoin was launched in 2009 and has increasing in popularity since then, reaching an all-time high of almost $20,000 on December, 2017.

Here are some of the benefits of using Bitcoin and its possible Impact on Insurance:

1. Anonymity.

Bitcoin can be used to purchase merchandise anonymously. In this time and age where privacy has become a critical factor when one is connected to the Internet. Being able to transact anonymously means a very safe option for many.

2. Easy international transactions.

Because bitcoin is not bound to any country nor subjected to governmental regulations, global payments and other financial transactions are easier, and cheaper than traditional international banking, where higher fees need to be paid, and which transactions may take up to 10 business days to complete.

3. Cost.

Small businesses may prefer bitcoin since there is no credit card fee that they would have to pay the bank. Online stores from across the world could also profit more by using bitcoin instead of other online payment methods such as Paypal where there are charges for currency conversion and additional commission fees.

4. Investment.

People may also get tempted by the history of bitcoin price. Due to its recent value rise, a lot of people have started investing in bitcoin as a form of long-term investment. Bitcoin is stored in a digital wallet which could either be on a cloud a computer, or on an offline wallet such as Trezor or even paper wallet. Bitcoin wallets serve as a bank account which allows sending or receiving bitcoin and paying for transactions.

No one can predict how bitcoin will perform in the future or how it can affect world finance and economy in the long run, but judging by its practicality and its popularity, it may be here to stay. Bitcoin may even change the way that the insurance industry works. Without the need for banks to act as a middleman, insurance claims would be paid out more efficiently and promptly. There may also come a time when there wouldn’t be the need to pay for a monthly premium; with the help of GPS technology in conjunction with bitcoin technology, a vehicle’s movement can be tracked, and one would just have to pay for the times when the vehicle is in use. These are just early assumptions but very well may be the future with bitcoin.