If you visit any blockchain conference or search for any interviews on the topic, you won’t need to look very far before you meet someone who says “blockchain technology will change the world”.
Saying it is one thing, but how many supporters of new blockchain and decentralised ledger technologies (DLT) would actually leave well-paid jobs to build something completely new in the sector? Well, that is exactly what Paul Mizel, Fabian Raetz, and Gamal Schmuck did back in 2018, when they left IT Consulting positions to begin work on the AsureNetwork – an open decentralized autonomous insurance platform.
Andrey Kuchaev, Asure’s Community Manager, explains that what must have been an incredibly difficult life choice actually turned out to be quite an easy decision: “We all left our old companies at the same time, in order to get away from typical industrial mindsets and start something fresh. We wanted to build something that can be used to help people in general instead of being simply a tool to earn more money. We followed, because we all believed in the idea and in the fact that we can build it”.
It is an ethos that bleeds through the entire team: “We are living our vision. Asure is not just another project that will be abandoned if we don’t collect enough funds. We are all devoted to the project and we will build as much functionality as our resources allow us”.
That’s all very well, but you might ask why such an ethos is so important in such a cold, hard results-orientated space. Simply put, the answer is that the Asure Network is being developed to change people’s lives on a global scale. Ethics matter.
The team is certainly putting in the miles too. They recently travelled to Kampala to meet Patrick Ayota, Deputy Managing Director of the National Social Security Fund (NSSF) of Uganda. The talks they had with the NSSF helped Asure Network to “sharpen our picture of pensions in Uganda and figure out how Asure can help with the process optimization”. (link to blog post: https://medium.com/asurenetwork/asure-founders-talk-with-patrick-ayotadeputy-managing-director-of-the-national-social-security-2bdd3133359f)
Asure say that another key take-away from the Uganda discussions was that by providing their solution to even one relatively small country, their Network could generate the same levels of activity as the major blockchain networks existing today.
Better Social Security Systems for everyone
Many countries struggle to provide social security systems that are fit-forpurpose 1. Whether this is down to poverty and lack of resources as in some developing countries, or a failure to adapt to new processes and technologies, the impact on people’s lives is deeper than you may think.
The European Report on Development 2 points out that, particularly in the developing world, children can be sent to work instead of receiving an education if illness, injury or crop failure strikes their parents – simply because there isn’t an adequate social security system in place to provide a safety net.
Asure also point to research that says: “the existence of social security systems, especially in the informal sector, strengthens the propensity to invest and thus promotes economic growth precisely where this best contributes to poverty reduction”3.
So improving social security isn’t just about protecting people from risk, it’s also about helping them to broaden their horizons.
The Asure Solution
The Asure Network is currently being developed to support all kinds of social security systems, from pensions and insurance to basic income systems.
The real game-changer will be the way Asure uses blockchain technology to disrupt the current system. Firstly, the potential for efficiency gains is phenomenal. Operational costs of the German pension system were more than three billion Euro in 2017. Using blockchain smart contracts and the ability to utilise social security data in a transparent way will make many old fashioned paper and siloed pension processes redundant – the savings made by automating these processes can be used to plough value back in to social security systems.
Using blockchain technology will also take a sledgehammer to the ‘trust and transparency’ issues that have hamstrung existing systems. Many people neglect their pensions or refuse to take out insurance because of a lack of trust for the authorities handling their money. The Asure Network will allow everyone to have a clear picture of their coverage at any point in time. Users no longer need to worry about their personal data being leaked, or suffering losses due to a centralised system failing or a company running off with their pension money. Everything will be stored on the blockchain, cryptographically coupled and forgery-proof.
Once fully developed, the Asure Network promises to be a thriving ecosystem that will allow individuals and insurance companies to design, develop, sell and reinsure a wide variety of insurance products. The platform will support all business operations through modern technologies like Machine Learning (ML), Artificial Intelligence (AI), Internet of Things (IoT), Predictive Analytics and ChatBots, but also through allowing for the expertise of insurance consultants where required.
The first experiment
The Asure Network’s first project will arguably be its most important – providing a solution to the global pensions crisis.
Back in April, Asure concluded their research into the formulation of a Decentralised, Autonomous Pension System (DEPOT).
The idea is to create a decentralised, optional pension system that incentivises people to use it, whilst remaining totally transparent and remarkably efficient.
The DEPOT model proposed by the AsureNetwork is not controlled by any single entity, and effectively runs itself – so costs are kept to an absolute minimum.
It is a ‘Pay-As-You-Go’ system, meaning people can contribute to it on a completely voluntary basis – which sounds great, but has its own problems. As we’ve seen with existing voluntary pension schemes, it’s often hard to persuade people to part with money they need now, for a proposed brighter future’.
DEPOT though, is built with incentivisation in mind. Contributors who pay more, or pay for longer will receive more when they come to collect their pension. Also, the earlier someone joins the scheme, the higher their rewards will be – a clever incentive to attract early adopters. Asure Network even has something for the laggards – the last generation to adopt the scheme – who will get a bonus payment collected from deposits, in case everyone leaves the scheme soon after they join.
The fact that DEPOT is Pay-As-You-Go (PAYG) not only puts the decision making firmly in the hands of the contributor, but also protects against inflation – something that has a significant negative impact on centralised fiat-based pension schemes. Instead of trying to store the value of an individual’s contribution over time, DEPOT uses the PAYG system to systematically preserve purchasing power using pension points accrued by contributors. This means that when they come to collect their pension, a user will always receive an amount that represents the contribution they made relative to all other contributions.
Of course, because DEPOT is decentralised and blockchain-based, it is borderless – allowing anyone in the world to join.
Asure says the next step in their DEPOT execution plan is to “implement the specification of the proposed pension system as a smart contract system using the Ethereum blockchain and make it available to the community by publishing it onto the testnet”.
Given that pensions and social security systems in general impact every single one of us, the progress of Asure Network is something to watch keenly.
1. Social security: Issues, challenges and prospects http://www.ilo.org/public/english/standards/relm/ilc/ilc89/pdf/rep-vi.pdf
2. Research — European Report on Development (ERD) https://www.die-gdi.de/erd/
3. Health as Human Capital: Theory and Implications A New Management Paradigm http://www.hcmsgroup.com/wp-content/uploads/2012/05/WP01-HHCTheory-and-Implications-2012-01-161.pdf
By Carl Gunaratnam