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To date, the insurance industry's interest in the blockchain has focused largely on the possibility of recording insurance entitlements in a transparent way. While the blockchain may produce significant efficiencies of this sort, it has considerably greater transformative potential. Smart contracts could serve as a substitute for insurance companies, conventionally conceived. Such contracts could perform the function of deciding whether claims should paid, without the need for or possibility of judicial intervention. The blockchain and smart contracts are difficult to regulate, because ownership and decisionmaking can be decentralized. Blockchain-based insurance may successfully provide a means of avoiding expensive regulation and could have a competitive advantage over regulated insurance. This article will discuss how blockchain-based insurance might work and will identify some technical challenges and other obstacles that it may face.

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GWU Law School Public Law Research Paper No. 2019-12; GWU Legal Studies Research Paper No. 2019-12

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