

Ask HN:  How to create a decentralized insurance system a la bitcoin? - senjutsuka

How could one create a decentralized disruptive health insurance system a la bitcoin?<p>I have a general idea for it as a protocol that would track insurance pools with limited terms and risk factors.  Each pool would consist of diversified risk profiles and of course it couldn't be anonymous if payout and risk factors were to be attributable.  The advantage I could see immediately is instead of the excess pool money going towards profits it could be distributed to all pools equally.  This ensures increased overall value the longer the system stays active.  It is similar in nature to a life mutual but different in several ways.<p>The main issues I would like to get my head around are two fold:  1) How do you distribute benefits? This could either be by consensus or formula or value of the account (so its zero sum).  2) Coming up with a programmatic way to devise pools.  This is probably the biggest problem because from my understanding insurance companies use actuaries and massively complex formulas to do this work now.<p>I know there are economic and pragmatic issues that may make this unfeasible but I thought I'd throw it out to the brains on here and see if there was any reasonable way to achieve such a thing.  It would certainly be great to make insurance more efficient, less centralized, and hopefully more affordable.<p>Disruptive technology, solving all the developed world's ills.
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maxdemarzi
I apologize if this post comes out sounding very negative, but "Insurance" is
susceptible to negative Black Swans.

[http://specialtyinsurance.typepad.com/specialty_insurance_bl...](http://specialtyinsurance.typepad.com/specialty_insurance_blog/2009/06/black-
swan-theory-in-insurance.html)

Any algorithm you come up with will eventually meet a large sigma event and
destroy your system unless it includes a whole lot of exclusions, or inversely
unless it covers only very specific events.

Tackling Health seems daunting to me, maybe start with some kind of property
insurance (computer insurance against theft/damage?)

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devijvers
The canonical problem of health insurance is not profit making, it's that most
of the people who contribute have to be excluded from receiving benefits. Not
sure how a distributed model is going to do a better job at that than current
models.

Bitcoin is trying to solve a mathematical problem (double spending), you're
talking about a problem that in my opinion doesn't have a mathematical
solution.

