Dissecting blockchain

What is blockchain?
The term ‘blockchain’ has been used to describe several different things, but at its core it is simply a distributed ledger to record transactions, and almost all blockchain technologies have the following set of characteristics:

• Distributed verification: consensus amongst distributed parties within a network removes the need for an intermediary to validate transactions
• Digital signatures: allows users to remain anonymous while still having unique accounts
• Immutability: recorded transactions cannot easily be changed, allowing for a secure system
• Time-stamped transactions: allows for easy tracking by recording date and time
• Consortium networks: private networks can be established, limiting access to the network
• Smart contracts: transactions can be automatically executed once defined conditions are met

How does it impact health care?
The application of blockchain to the health care industry could have significant outcomes:

1. Health records will no longer need to be stored by health organizations, but can be controlled by individuals and distributed in real time to trusted parties
2. Information silos will be removed as there will be a free flow of information between the multiple trusted health care stakeholders. All health care providers will have one reconciled version of the data—globally
3. Information will no longer need to be manually transferred, but rather, will be automatically distributed to the predetermined trusted parties after specific conditions have been met

Ultimately, this results in improved quality of care provided to patients, reduced costs to store and reconcile patient information, improved visibility and trust between physicians and patients, and reduction in fraudulent transactions.

Major barriers
In order for these benefits to be realized, major cultural and business barriers need to first be overcome:

1. Regulations: blockchain presents a fundamentally different way for industries to function, and while regulators are closely examining its effects, there are still regulatory uncertainties which prevent its broad-scale adoption
2. Awareness: lack of public understanding around how the technology works, and its applications outside of bitcoin
3. Culture of resistance: given the radical transformation blockchain offers by removing the central authority, it is expected that it will face resistance, so it is important to reveal how blockchain can be smoothly integrated without disrupting daily business operations