Recently, Lemonade (LMND 6.33% ) announced its involvement in a cryptocurrency project to bring crop insurance to farmers in Africa. In this video clip from “The Crypto Show” on Motley Fool live, recorded on March 23Fool.com contributors Travis Hoium and Jon Quast explain how the insurance tech company plans to use its AI for this new venture.
Travis Houm: Yeah. I also have a lot of questions about DAOs, Decentralized Autonomous Organizations. So in a broad sense what you do is a token gives you a vote so it’s kind of like a stock and you get voting rights if you own shares of a stock. But it is a relatively new structure. We know how stock voting works, its pros and cons. But decentralized autonomous organizations I think present some of the same opportunities and challenges and we don’t really know what the challenges are or where the problems will be until we see them so that’s the other question I have with that.
I really like a company like Lemonade and these cryptocurrency blockchains trying to solve these problems in parts of the world that may not have the banking infrastructure that we have in the United States. But there are a lot of questions about something like DAOs, how do they play into that? And I say that not only for this project but also for other DAOs, so I love the concept. Hopefully these are the things that allow us to mature as an industry and understand what are the rules behind a DAO? How do you run a good one? What infrastructure do you need? We’ll see how it plays out but I like the concept for sure.
Jon Quast: Yeah, I totally agree. I think you have to be a little skeptical all the time. Not just this news. But with Lemonade, I don’t think it changes the needle with them financially, so if you’re a Lemonade shareholder, I wouldn’t double down on this news. I don’t think that really moves the needle financially.
It will be interesting. Part of me wonders, Lemonade is all about their artificial intelligence trying more and more to remove the human component from building and structuring their policies and this is an opportunity to really grow that technology because now we do not necessarily use consumer information. We build it based on past weather cycles, current weather cycles, field location, crops they are growing, trying to fit all of that information into a predictive model that creates or you can buy policy insurance and having it break even is the goal in this case.
But part of me wonders if this isn’t an attempt to really push the boundaries of what his AI can do. He’s a skeptic who doesn’t talk much about downside risk, because if you assure someone in the US in a loud voice if you’re doing something wrong, you’re going to hear about it. But maybe in another part of the world something is wrong here, the fallout is a bit less. After all, it sounded like you were trying to do your best with a charity. I do not know. I was just thinking out loud. Is this Lemonade trying to develop its AI in a way that really presents a small downside to the company? Anyway, just a few thoughts there and we’ll see how it plays out over time.
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