If you’re not already familiar, the blockchain is the real breakthrough in technology that underlies bitcoin. Pay attention because the implications are much, much larger than bitcoin and crypto currencies. The implications affect trading almost any kind of information or asset, digital rights, and trust. It’s big. And don’t just take my word for it.
Venture Capitalist Fred Wilson at Union Square Ventures says the block chain will be the next big investment cycle following mobile and social.
Mark Andreesen, Netscape founder and now VC at Andreesen Horowitz, says “when we’re sitting here in 20 years, we’ll be talking about Bitcoin the way we talk about the Internet today.”
Chris Dixon, a partner at Andreeson Horowitz (via WSJ) expands on this idea, “people would have perhaps thought in 1993 that the new network of interconnected computers would have allowed more efficient file sharing and messaging, “but no one imagined Twitter, or Wikipedia, or YouTube, or all those amazing inventions that happened over the next 10 to 20 years… That’s because extensible software platforms [like bitcoin] that anyone can build on top of are incredibly powerful and have all these unexpected uses.“
Big time investors are or will be betting their dollars that this will go much further than an online currency.
What’s the magic behind the block chain and how could it be applied to healthcare?
It comes to a concept of distributed trust. Rather than a third party verifying credit, verifying the deed to property or verifying an identity and all the messy fraud that can go with it, the blockchain network can perform this kind of verification.
The pieces that pull this all together are:
- hashing/encrypting information
- digital signatures on that hashed information
- public and private keying
- public posting of information to nodes in a network
- a distributed architecture of the blockchain that allows the network nodes to verify a timeline of what’s real and what’s not
This architecture can be used to verify payments, as is done with bitcoin, solving what’s known as the double spending problem (having your money and spending it, too). It’s a method to ensure that the same dollar can be spent only once. In other words, once you’ve spent it, it’s gone from your account and can’t be spent (by you) again.
A potentially even bigger breakthrough is that the same concept could be used to verify any information exchange in a distributed trust network. In a sense, it opens up the potential that any piece of information that could go onto the blockchain is unique and verifiable, more like things in the real world that occupy a certain place and time. In essence, the same problem that was solved for not having real world dollars and coins for digital currency. Theoretically could be any kind of digital item for which you wanted to establish a true or original copy.
Unlike health information exchange organizations that verify members’ trustworthiness (e.g., HIE organizations, DirectTrust, etc.), the block chain uses hashing, which is creating a unique code (hash) for each collection of content, a process that can’t go in reverse. If you have the content and a key, you can verify that the content existed before by seeing that the same hash is generated. The hash is calculated locally, and you can’t recreate the content from the hash.
In short, the use of hashing alleviates the time and many of the resources needed to verify that a party has done what they say they have done at a certain point in time because all of the information necessary to see if something has changed is published on the network.
Proof of Existence is an application of the block chain as a virtual notary, and perhaps hints at solutions to come. You can prove, mathematically, that you had a certain set of information, in this case a document, at a certain point in time by putting it on the blockchain, which acts like a time stamp and a ledger of activity. If you make changes to it, a hash representing the content will no longer be valid. Artists are using it to establish proof, and possibly ownership, of their work.
To play around with this technology, I encourage you to check out Proof of Existence to see the potential.
What Proof of Existence is used for currently:
- Demonstrating data ownership without revealing actual data
- Document/information time-stamping
- Checking for document/information integrity
The rather small caveat to all of this is that the network has to be large enough and incentivized to check the work on the block chain, but for even small problems, that shouldn’t be a problem. Compared to traditional verification methods, it’s pennies or less on the dollar and more reliable.
These elements of the block chain perhaps could solve some critical issues in healthcare, such as the seemingly opposing forces of privacy and sharing. I’ve often written about the potential for a health information economy once we have a trusted system and people don’t fear their own information could be used against them. What if we could freely share information without fear it could be used without permission and that it was verified?
This is, at least in theory, what the blockchain can offer, but laws will have to catch up. We haven’t tested ownership or use of the blockchain as proof of existence or a time stamp, but that day is surely coming.
There are lots of ideas beyond bitcoin and proof of existence on how the blockchain might be used to verify uses and rights. Here’s a list of 80+ possibilities collected by Ledra Capital. Some I’m sure will pan out, others probably won’t, but it should provide a flavor for some of the potential.
A forward-looking part of blockchain in health care is the ability to build assurance contracts on it.
Kickstarter is an example of one type of assurance contract. If a certain threshold is reached, the kickstarter agrees to build a “public good”. As one bitcoin and Google developer points out in a “future of money” talk, these arrangements are messy for banks. They can too easily turn sour, so the overhead is too great. But with bitcoin, these contracts are relatively straightforward, they’re built into the protocol, with the potential to be automated.
It’s all very early, but there may be an opportunity to write many different kinds of lightweight assurance contracts around health. The opportunities to solve some major issues around identity, ownership, and contracts in healthcare, and elsewhere, seem endless.
This is all very new, how might we protect privacy while improving healthcare services by verifying information and financing activities with blockchain technologies? Why will or won’t any of this work?