5 things you need to know about blockchain
If you’re not familiar with blockchain, you’re not alone. As industries begin to experiment with this potentially transformative technology, it’s important to understand the basics. Here are a few tips to get you started:
1. Blockchain is a database.
There is a steep learning curve around this technology, but there are two key concepts to understanding how it works:
- It is a shared ledger of transactions that is not managed by a single party, but rather by a network of parties. Having a shared record of digital assets enables us to transact with other parties without relying on a central broker to validate a record. For example, bitcoin, one of the first large-scale applications of blockchain, is a ‘bank without the bank.’ Imagine a healthcare data exchange not managed by a central player.
- Smart Contracts offer business process automation with high security and reliability. They operate under a model of “If X happens, then make sure Y happens next.” So, for example, Smart Contracts may help automate anything from authorizing refilling of prescription orders to settling insurance payments.
2. It’s not all hype; blockchain will change how we do healthcare.
It’s difficult to predict exactly how, but transformation is coming. Blockchain innovations will help us rethink the nature of interoperability, automation and trusted transactions across healthcare experiences.
A shared-ledger approach might change the way we store, secure and share data related to medical records, appointments and prescriptions. The pharmaceutical industry is looking at blockchain platforms as a way to protect its supply chain. Industry and government regulators are also looking at a blockchain layer of communication and security for clinical trials.
Yet the most profound changes are likely to be based on innovations we cannot currently imagine. There are more futuristic visions of change where ‘tokens’ and smart contracts guide medication adherence and incentivize other behavioral-based outcomes. Imagine a physician giving a prescription that is connected to a crypto currency (‘token’) of value that can be used for refills. If the patient can use an app that verifies adherence, then the value of token increases and the next prescription costs less.
3. Early blockchain players to watch are software platforms (not applications).
Bitcoin is the most well-known blockchain application, but it’s not where healthcare professionals should spend their time learning. Two software platforms are most important to the healthcare industry are:
- Ethereum is an open-source platform designed for the development of Smart Contracts. Ethereum can also be used as “private” blockchains to enable highly regulated industries – such as healthcare and finance – to limit the parties who have access to the shared ledger. Patientory is an example of using Ethereum as a private platform for sharing electronic medical records.
- Hyperledger is another widely used platform, originally developed by IBM and now housed under the Linux Foundation. It is gaining traction as a business-focused application platform, in part because it can easily integrate with legacy software.
4. Blockchain is still in its early stages.
Much like the disruptive technology that served as the backbone for email and the Internet, it will take many years for blockchain-powered solutions to appear and become commonplace. It is common to hear blockchain’s maturity level today described as the Internet’s maturity level in 1995.
Startups and incumbents are just putting stakes in the ground with proof of concept today. Over the next two years we are likely to see more regulatory guidance in the United States and around the world. Beyond that, we will start seeing early applications.
5. Communities are sharing the latest blockchain innovations in healthcare.
People who want to learn more should check out Hashed Health, an organization based in Nashville, Tennessee, on the cutting edge of blockchain in this sector. There are also great conversations happening and resources available on Twitter.
It’s a new frontier, and no one can predict exactly how the blockchain journey will unfold in healthcare. To explore these topics in greater detail, you can listen to my two-part podcast series.