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The weather feed can provided by several oracles, and the contract can take the median value. You could program whatever logic you want into the insurance. For

The weather feed can provided by several oracles, and the contract can take the median value. You could program whatever logic you want into the insurance. For example, some kind of dispute resolution system that appeals to a higher authority. How do insurance companies deal with this problem today? Why do you trust the insurance company not to lie and say that the weather was fine? Whatever that mechanism is, it can be programmed into a smart contract.

rspeer 9y ago
> How do insurance companies deal with this problem today? The legal system. It can put people in jail for fraud if necessary. Do you really want "smart" "contracts" to have the power to put people in jail? Really?
- oh_sigh 9y ago
  A smart contract wouldn't put someone in jail(how often does that directly result from a contract dispute anyway?)...a lawsuit would he how someone resolves the issue if that remedy is available and necessary
  - eli 9y ago
    People go to jail for insurance fraud all the time.
  - SolarNet 9y ago
    Fraud is a criminal offense where you lie or deceive people about things. For example on contracts. Where you can end up in jail. Smart contracts don't fix this. A contract dispute is where both parties are truthful, but disagree on the resolution of the contract. This is the part smart contracts fix. And it's how insurance companies deal with these problems today.
- deleted 9y ago
  [deleted]
- RexetBlell 9y ago
  Not quite. You could make it a legally punishable offense to provide incorrect information to a weather oracle. The provider would be sent to jail for defrauding the oracle. I'm just saying that it's possible to solve the problem the same way that it is solved today.
  - candiodari 9y ago
    Not really. The basic problem is "fractional reserve". Essentially an insurance company will only have about 5% of the money needed to pay out their policies (less in Europe, around 2.5%, and there's other variations across the world). (Even then significant amounts of that 5% would be either loans or shares, which are technically also loans. Most large insurers would go bankrupt if their risk assessments were off by 1%). Since this is the exact thing that the double spending algorithm would check against this wouldn't be allowed, and therefore you can't have normal insurance in a blockchain world.

rspeer 9y ago

> How do insurance companies deal with this problem today? The legal system. It can put people in jail for fraud if necessary. Do you really want "smart" "contracts" to have the power to put people in jail? Really?

oh_sigh 9y ago
A smart contract wouldn't put someone in jail(how often does that directly result from a contract dispute anyway?)...a lawsuit would he how someone resolves the issue if that remedy is available and necessary
- eli 9y ago
  People go to jail for insurance fraud all the time.
- SolarNet 9y ago
  Fraud is a criminal offense where you lie or deceive people about things. For example on contracts. Where you can end up in jail. Smart contracts don't fix this. A contract dispute is where both parties are truthful, but disagree on the resolution of the contract. This is the part smart contracts fix. And it's how insurance companies deal with these problems today.
deleted 9y ago
[deleted]
RexetBlell 9y ago
Not quite. You could make it a legally punishable offense to provide incorrect information to a weather oracle. The provider would be sent to jail for defrauding the oracle. I'm just saying that it's possible to solve the problem the same way that it is solved today.
- candiodari 9y ago
  Not really. The basic problem is "fractional reserve". Essentially an insurance company will only have about 5% of the money needed to pay out their policies (less in Europe, around 2.5%, and there's other variations across the world). (Even then significant amounts of that 5% would be either loans or shares, which are technically also loans. Most large insurers would go bankrupt if their risk assessments were off by 1%). Since this is the exact thing that the double spending algorithm would check against this wouldn't be allowed, and therefore you can't have normal insurance in a blockchain world.