Blockchain Technology for Professional Engineers: NSPE FinTech Task Force Publishes Whitepaper
Blockchain technology has been called among the most important technologies since the invention of the Internet. This fundamentally new type of database architecture may greatly reduce the friction and errors in executing contracts and other transactions. Financial Institutions are moving aggressively to research and adopt blockchain technologies because of the great efficiencies promised by decentralized data structures.
On the surface, there is a compelling case for advancing blockchain technology for many modern transactions. This whitepaper demonstrates that blockchain technology does in fact appear to meet the conditions of insurability – that is, blockchains produce the mathematics that an actuary would need to develop an insurance product. However, the transition from the digital domain to the physical domain remains rife with peril and does not appear to meet the conditions of insurability within an existing legal framework.
One solution that exists, within existing legal framework, would be to deploy a Professional Engineering adjudicator at that terminus of smart contracts where specific risk is transferred. A blockchain project or enterprise would then be fully insurable from beginning to end, and thus, may be capitalized.
Admittedly, this introduces a bias initially toward infrastructure applications, but that is not necessarily a bad thing for society at the present time. The world is faced with daunting challenges in terms of energy, climate, transportation, health, and infrastructure. For this reason, the paper argues that a blockchain consortium between engineering and insurance may constitute the highest and best use case for this important data technology that would be essential in underwriting the banking sector.
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