Blockchain Is Back, Baby! – Then Again, It Never Left. A Conversation With openIDL (part of the Linux Foundation). AoB S1E4

“Don’t call it a comeback, I’ve been here for years!”
– LL Cool J in “Mama Said Knock You Out”

Blockchain is back..but it never left!

Here is a reminder of what Blockchain technology does: Imagine you have a group of friends, and you all want to keep track of who owes money to whom. Instead of having one person keep a record, which could be lost or tampered with, you create a shared digital ledger that everyone in the group can see and update.

This shared ledger is like a really long receipt that keeps growing with every new transaction. Each new transaction is like a new entry on the receipt, and it gets added to the end of the receipt in a block. That’s why it’s called a “blockchain” – it’s a chain of blocks, with each block containing multiple transactions.

Here’s the cool part: once a new block of transactions is added to the chain, it becomes extremely difficult to change or remove it. That’s because the block is locked in place using cryptography (fancy math and code). If someone tried to change a block, it would be obvious to everyone else because the cryptographic lock would no longer match.

So, with a blockchain, you have a permanent, transparent record of all transactions that everyone in the group can see and verify. No one person controls the ledger, and no one can easily cheat the system.

This shared, tamper-proof ledger can be used for recording all kinds of transactions, not just money transfers between friends. People are exploring how to use blockchains for things like tracking ownership of digital assets, storing medical records, and even voting in elections.

The idea is to create a system that doesn’t require a central authority or middleman, but instead relies on a network of computers (or friends in our group example) to maintain and secure the shared ledger together.

The episode discusses the openIDL (open Insurance Data Link) project, a blockchain initiative under the Linux Foundation for data exchange in the insurance industry, with a focus on collaboration between carriers and regulators. The project aims to establish data standards and improve efficiency in the insurance market, addressing issues such as the capture and exchange of accurate data. The Linux Foundation’s involvement as a neutral party facilitates coordination and governance between industry players.

Why focus on the engagement between carriers and regulators? Asa matter of public policy, it is crucial that regulators have up-to-date information about the state of the market. Data calls are notoriously slow, inefficient, and often combative. By using Blockchain technology, we eliminate the unsecure passing around of excel spreadsheets, the need to clean, organize and aggregate those spreadsheets, build reports, and generate reports needed by the market, regulators. and legislature to make critical decisions. Instead of a month’s long process, by using Blockchain technology, we shrink the process from months to days or weeks. By having a 3rd party who is neutral as the processor and guardian of the process, perhaps we can reduce some of the contentiousness between carriers and regulators as a matter of public policy!

openIDL
Linux Foundation
Lanaya Nelson (Ecosystem Manager, openIDL)
Josh Hirschman – (CEO)

About Nicholas Lamparelli

Nick Lamparelli is a 20+ year veteran of the insurance wars. He has a unique vantage point on the insurance industry. From selling home & auto insurance, helping companies with commercial insurance, to being an underwriter with an excess & surplus lines wholesaler to catastrophe modeling Nick has wide experience in the industry. Over past 10 years, Nick has been focused on the insurance analytics of natural catastrophes and big data. Nick serves as our Chief Evangelist.