Benefits and Challenges of Blockchain Technology

Benefits of Blockchain Technology:

  • Decentralized consensus formation without intermediaries. The trust is placed in the network and the Blockchain technology and not so much in individual participants or transaction partners.
  • Lower costs for operators will also have a positive effect on the transaction fees.
  • Transparent costs and the further development of the technology through open source code, coordinated via “consensus mechanisms”.
  • Highly redundant and fail-safe.
  • High network and process transparency while preserving anonymity and pseudonymity of the participants. This reduces imbalances in power, abuses, and arbitrary decisions.


Challenges of Blockchain Technology:

  • The environmental impact of energy consumed by the widespread proof-of-work method is a strong counterargument to the potential offered by this increasingly attractive technology.
  • Transactions cannot be made retroactive, which may result in irreversible errors. There is already some uncertainty and ambiguity with smart contracts and how to handle flaws in the contracts.
  • Scalability is another critical issue for all Blockchain solutions as the number of subscribers and transactions to be processed will increase as the technology becomes increasingly attractive.
  • An unclear legal situation, particularly in Germany, poses the risk of new Blockchain applications running afoul of future changes to the law.
  • The digitalization and transfer of existing documents, objects, and processes into the Blockchain environment will be a challenge.
  • Anonymity cannot be guaranteed in certain Blockchain environments.
Business Case B2C Insurance

Business-to-Customer Insurance

A British fittings manufacturer changed its strategy in 2005 so that it would be able to supply products to the international market at lower cost, and has been the global market leader in the premium...
Read More
USe Case for Blockchain and Insurance as a service

Insurance-as-a-Service by a Captive

A global branded drinks producer, headquartered in Austria, offers pre-made insurance products for high-risk sports under its brand. These are passed on to the end users in question via selected partner companies. In addition to...
Read More

Leave a Reply