Ok, ok, ok, ok, and… thread dropped. I’m still not seeing that “last mile” connection where the contract knows anything about what happened in meatspace except “verified agent 8675309 asserts side 2 of the contract has been fulfilled” times however many verifiers you’re willing to pay for.
And regarding crop insurance,
the article says “to develop” which means it does not yet exist probably due to some combination of:
taking some sort of external data inputs and outputting a result is vulnerable to hacks to in incoming data. For example, if all the relevant sources report heavy hail in one particular region, all those farmers would get paid, regardless of the actual meatspace weather.
medium term contracts, like insurance, need to pay out with a predictable value. Niche (and therefore volatile) currency isn’t suitable… especially for an insurance product that would flood a small geographic area with payouts at the same time.
paying out based on generalized reports rather than individual claims means that you are pushing risk from the insurer to the farmer—specifically, you are requiring the farmer to know what kinds of area weather might damage their crops, and how much, rather than being able to say “I should get X hundred bushels, if I get less and there was an obvious weather reason, pay for the difference”
paying out based on generalized reports rather than individual claims means that some farms will have no damage and get the same payout as the one “across the road” or “across the river” that was heavily damaged. Which means the premiums need to reflect the increased chance of a payout occurring. Does that compensate for hiring fewer people to verify claims? Maybe.
Every step made to disconnect insurance from actual suffering by a specific human increases the ability of people to buy it as a gamble, rather than a hedge. This is bad ref Financial Crisis (2008).
Ok, ok, ok, ok, and… thread dropped. I’m still not seeing that “last mile” connection where the contract knows anything about what happened in meatspace except “verified agent 8675309 asserts side 2 of the contract has been fulfilled” times however many verifiers you’re willing to pay for.
And regarding crop insurance,
the article says “to develop” which means it does not yet exist probably due to some combination of:
taking some sort of external data inputs and outputting a result is vulnerable to hacks to in incoming data. For example, if all the relevant sources report heavy hail in one particular region, all those farmers would get paid, regardless of the actual meatspace weather.
medium term contracts, like insurance, need to pay out with a predictable value. Niche (and therefore volatile) currency isn’t suitable… especially for an insurance product that would flood a small geographic area with payouts at the same time.
paying out based on generalized reports rather than individual claims means that you are pushing risk from the insurer to the farmer—specifically, you are requiring the farmer to know what kinds of area weather might damage their crops, and how much, rather than being able to say “I should get X hundred bushels, if I get less and there was an obvious weather reason, pay for the difference”
paying out based on generalized reports rather than individual claims means that some farms will have no damage and get the same payout as the one “across the road” or “across the river” that was heavily damaged. Which means the premiums need to reflect the increased chance of a payout occurring. Does that compensate for hiring fewer people to verify claims? Maybe.
Every step made to disconnect insurance from actual suffering by a specific human increases the ability of people to buy it as a gamble, rather than a hedge. This is bad ref Financial Crisis (2008).