Like artificial intelligence (AI), machine learning (ML), robotics, and virtual reality (VR), blockchain has been hyped across sectors, including healthcare. But navigating the hype and assessing the potential value of blockchain remains a challenge for healthcare stakeholders.
In 2017, 83 percent of healthcare executives polled by the Pistoia Alliance reported that they expected the broad adoption of blockchain in the life sciences and pharmaceutical industries within the next five years.
Since then, some of that interest in adoption has led to real-world investment, with the global healthcare blockchain market projected to reach $829 million this year, according to MarketsandMarkets.
WHAT IS BLOCKCHAIN?
Blockchain is often associated with cryptocurrencies, as its introduction in 2008 helped enable the rise of Bitcoin. However, interest in the technology spread across industries as secure, transparent data-sharing has become critical.
IBM defines blockchain as “a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” These assets can be tangible, like a car, or intangible, like intellectual property.
As a type of distributed ledger technology (DLT), blockchain allows users to record, track, share, and synchronize assets and transactions without the need for a centralized entity to do so. This decentralization helps ensure that exchanges made on the blockchain are permanent, transparent, and immutable.
As a transaction occurs, it is recorded as a “block” of information and data. Each transaction on the blockchain can contain a wealth of information related to the movement of an asset, including who or what entity was involved and when, where, or how the transaction took place. Each block is also given a hash, which serves as a unique identifier that changes if the data contained in the block changes.
From there, the block is “chained” to the blocks before and after it as the asset changes ownership or moves from place to place. Each block confirms the exact time and sequence of a transaction. The links between each block prevent a new block from being inserted between two existing ones, in addition to ensuring that any block on the chain cannot be altered.
The chain is irreversible, and each additional block and hash helps strengthen the verification of the previous block and, in turn, the entire blockchain. This feature is what makes blockchains immutable and tamper-evident.
Previous blocks in the chain are difficult for malicious actors to tamper with, helping to increase trust between the members of a blockchain network. Transaction validation requires consensus from all network members to confirm the accuracy of the data. Since all transactions on a blockchain are permanently recorded, no one can delete a transaction or block, even a system administrator.
There are four types of blockchain networks: public, private, permissioned, and consortium.
Public blockchains are those that anyone can participate in, like various cryptocurrencies. Private blockchains function as decentralized peer-to-peer networks, similar to public blockchains, but controlled by one organization that governs who may participate, maintains the ledger, and executes consensus protocols.
Permissioned blockchain networks are generally established by stakeholders who create a private blockchain, but permissioned blockchains can also be public. This type of blockchain places certain restrictions on who can participate in the network, as users must receive permission or an invitation to join. Permissioned blockchains are also used to dictate which transactions users on the network are allowed to participate in.
Consortium blockchains are maintained by multiple organizations, which can be useful in business applications in which all participants must be permissioned and share responsibility for the blockchain. These organizations can then decide who may access the blockchain’s data or engage in transactions.