A distributed ledger technology where the entries are made, saved, verified,
and continued in order of transaction entry on each counterparty's secure
computer system involved. Each entry is related to the previous entry to ensure
validity and immutability of the overall transaction. Essentially, the ledger
is shared by all the parties to the transaction, and it allows all of them to
see and verify the complete transaction and to avoid redundancy and
inconsistency. Blockchain is the technology behind Bitcoin. It is also being
used in certain financial services and banking sectors. It provides for a more
secure way of doing direct business between peers and requires less human
intervention. Using a common buzzword of today, it is a disruptive technology
and has the potential to change the way certain business transactions are
handled radically. It is also being used, at least as an experiment, for
certain insurance-linked products, like natural catastrophe swaps. The
insurance and reinsurance industry is interested in Blockchain technology
because it has the potential of reducing administrative workload, eliminating
frictional costs, reducing, if not eliminating, inconsistency, and improving
auditability.