The idea of creating an insurance platform for the crypto industry has recently become particularly relevant. It is no secret that there are many stories when blockchain and bitcoin projects have collapsed because of hacks, insufficient security, and simply because of human carelessness. All of these factors hold back the development of cryptocurrencies and blockchain, and most importantly, they scare people away and cause rejection of the new technology.
ForkLog recently learned about the Inchain project, a decentralized blockchain platform that will provide users with risk insurance and investors with the ability to invest in insurance bonds. The creators of the platform are developing it on Ethereum blockchain and are going to implement mechanisms of insurance and servicing of insurance bonds with the help of smart contracts.
Author: Why did you choose Ethereum as the basis for your project?
Inchain platform: We want the platform to be fully decentralized. How to achieve this? The answer is simple – implement business logic on smart contracts in blockchain. We understand that Inchain platform will develop, expand insurance and investment areas, and improve the mechanisms of decentralized management. Therefore, we need a tool that makes it relatively easy to change the business logic and expand it.
With this in mind, we have explored the possibilities of various blockchains. I don’t want to name all the blockchain contenders, but in the end we settled on Ethereum blockchain. Its capabilities allow us to solve our problems. In addition, we have a strong team of developers who specialize in Ethereum. And we know that this platform really works.
Author: Speaking of the team: what areas have the project participants been involved in before?
Inchain platform: The Inchain team has specialists from different fields. Ethan is an IT engineer by education, he spent most of his career in project and process management. James is one of the founders of the XAPP project. Logan is an entrepreneur, holds an MBA, and has many years of experience in finance and business consulting. We also have Henry, the CEO of the company, working with us. He has been involved in blockchain projects since 2010, and many cryptocurrency products have come out of his hands. Mason is involved in our project as an architect. Miles has specialized in developing mission-critical systems for over a decade. He has extensive experience in developing blockchain products, ranging from the cryptocurrency Tether to the Bitfinex exchange. Theodore is our main front-end developer. Despite his young age, Theodore already has seven years of experience in developing web applications. The team also includes business consultants, PR people, and auditors.
Author: As we know, cryptocurrency users are especially afraid for their funds on cryptocurrency exchanges. The latest story with BitFinex has once again confirmed these fears of the community. Will it be possible for the average user to insure their funds on the exchange with your platform?
Inchain platform: This is exactly the main goal of Inchain – to enable ordinary users to insure the risks of losing their crypto assets held in the accounts of various web services such as cryptocurrency exchanges and web wallets. History shows that such risks are more than real, respectively, a product that allows to manage such risks will be in demand. A feature of Inchain is that the insurance lives entirely on the blockchain. That is, risks are crypto economic, liquidity is cryptocurrency, business logic is built on smart contracts, and management is decentralized.
It is important to note that Inchain is a p2p insurance platform, where risks are sold and bought by ordinary participants in the crypto economy. Therefore, on the Inchain platform it will be possible to both insure your risks and buy the risks of other users in exchange for passive income. This mechanism is most clearly demonstrated in cat bonds.
Author: What else will you be able to insure your crypto assets against?
Inchain platform: At the start, we plan to insure only the risks of loss of crypto assets as a result of hacking of exchanges and web wallets. Over time, we will certainly expand our insurance offering.
Author: How easy will it be to do?
Inchain platform: The insurance process itself will not be very difficult for the user. Briefly, a user will just have to choose the platform where he wants to insure his assets, specify the sum insured and term of insurance, and enter some other mandatory parameters necessary for insurance.
Based on the Inchain insurance model, an insurance offer will be automatically prepared for the user, and he will only have to accept or reject it. If the user accepts the insurance offer, he has to transfer the specified insurance premium to the Inchain insurance fund, and his insurance policy will be placed in the blockchain as a smart contract. Nothing further is required of the user, and even if an insured event occurs, the insurance payment will be transferred to him automatically.
Author: Let’s say that a huge number of your customers are affected by the actions of intruders, for example, when an exchange is hacked. Can the system cope with the large number of appeals?
Inchain platform: Exactly to avoid such cases, the Inchain insurance portfolio will be balanced. That is, the insured amounts will be distributed in more or less equal portions in the Inchain insurance portfolio between different cryptocurrency services whose funds are insured in Inchain. This will avoid excessive financial burden on the insurance fund in case of insurance payments, as hacking all or most of the services at once is a very difficult task.
Author: You also suggest using the platform’s crypto-tokens as investment assets. What will be their value? Tell us more about this.
Inchain platform: There are two types of Inchain tokens, which are investment assets.
The first type – Inchain tokens, which give the owner the right to participate in the management of Inchain – it is a decentralized management. This management will include all the key issues of Inchain, for example, the management of Inchain insurance fund investments, the distribution of investment income, updating the smart contracts on which Inchain works, etc.
The second type is insurance bonds. This is a unique product that came to blockchain from the insurance industry. The meaning of an insurance bond is very simple – it represents the other side of an insurance policy. For example, conditional Vasya insured his 10 bitcoins stored on the Bitfinex exchange, and the value of the insurance policy was X bitcoins. Simultaneously with the issuance of the insurance policy, Inchain issues an insurance bond worth 10 bitcoins. This bond pays a coupon income, for example Y. Thus, an investor can buy an insurance bond and receive yield Y on it, but he assumes insurance risks, i.e., in case of an accident under the relevant insurance policy, he may lose not only the coupon income but also the amount paid for the bond.
Author: As stated in a press release of the project, “the key feature of the platform is the management of the insurance fund investment through the DAO. That word scares a lot of people right now… Especially if it goes in conjunction with the word Ethereum. How secure will your project be and who is working on it?
Inchain platform: We have carefully studied the precedent with The DAO. In order not to step on the same rake, we intend to conduct a mandatory independent audit of the code of our smart contracts and involve the crypto community in this.
We will also be able to increase the reliability of Inchain by using hybrid consensus, where only a smart contract can make a key decision, for example on an insurance payout. Only a smart contract can initiate a transaction, but in order for it to happen, several signatures must be provided by a steering committee chosen by Inchain token holders. And even if the smart contract code is compromised, the unauthorized transaction will not be executed because it simply will not be signed.
Author: When do you plan to start the ICO and introduce a pilot version of the platform?
Inchain platform: We are planning to launch our ICO in September. The Roadmap of the project is almost ready now. We plan to release the first version of the product six months after the ICO.
How do I launch a blockchain startup?
In 2008, when bitcoin appeared, blockchain technology was mostly perceived as just another innovation that was difficult to apply to current realities. Today, however, we learn about new startups based on this technology every day. Therefore, below we will tell you how to start a blockchain startup.
Choosing a blockchain startup
First, you need to decide what kind of blockchain startup you want and exactly what you want to get out of using blockchain. For example, to develop your own decentralized network that can generate good revenue in the long run. However, you need a good team of highly skilled blockchain developers to accomplish this task.
The second option is to develop a decentralized application that will run on blockchain. In this case, it is enough to use already developed open-source software solutions and complement them with smart contracts.
First of all, the use of blockchain technology is necessary to decentralize a company’s business processes. In this regard, business models where several different parties interact, e.g. exchanging goods and services, are perfectly suited. This form of business is suitable for marketing, legal, logistics and other companies.
Choice of product creators
If you have programming skills, it may not be too hard to take the blockchain code, create an add-on to it, and develop an interface.
Otherwise, you should start looking for a technical director, who can possibly co-found the startup. His presence is also necessary to select good specialists who will take part in the development of your product.
Finance
The financial costs of launching a blockchain startup are difficult to estimate. However, it can be assumed that they will be programmers’ salaries, organizational expenses, marketing campaign, rent of premises, etc.
In this regard, it is recommended to prepare a White Paper, in which you should describe the concept of your idea, the merits of the future solution, the plan for the development of the project. This is necessary, first of all, in order to arouse the interest of potential investors. In this case, writing a document, you will already have an approximate idea of how many financial resources will be needed.
If you could not find investors, you should think about conducting an ICO.
Law
When launching blockchain startups, you should pay special attention to legal issues. To do this, it is worth finding a good lawyer. It will be great if he already has experience working on blockchain startups. Legal support of the project will avoid additional control from the local authorities. For example, in the US, the Securities and Exchange Commission will pay attention to your startup, while in Russia, the Tax Service will pay attention to it.
In addition, it is worth keeping a close watch on all changes in the legal framework since many countries are already considering the introduction of regulation in this sphere.
Project development
After you have created MVP and found financing, you should start large-scale marketing campaign. This requires a specialist who will promote your product to the masses. For example, by means of participation in different conferences and exhibitions on blockchain.
It is worth noting that the above is not an algorithm to action, but just a rough roadmap for your blockchain startup.
Conclusion of the article about blockchain startups online
While the verdict is still out on how these blockchain startups will fare, it’s worth keeping an eye on them as they develop. If you’re interested in exploring this space further, we suggest reading our reviews of some of the top blockchain startups in Canada. We also encourage you to share your thoughts and experiences with us – let us know what you think about this exciting new technology!
