For a data-intensive industry like healthcare sector, blockchain is a reforming technology, which could revolutionize the way data is managed. The traditional way of a centralized database system is vulnerable to attacks from hackers posing major business risks. Blockchain technology could streamline the sharing of medical records in a secure way, protect the patient’s sensitive data and give patients more control over their information.
What is Blockchain?
Roots of blockchain technology lie in a distributed system, where two or more nodes coordinate with each other to accomplish a common goal. At the very core, blockchain is a decentralized distributed system. It allows participating peers to exchange data or value without the need for a centrally trusted arbitrator leading to almost immediate settlement of transactions.
Blockchain Types
Blockchain can be broadly divided into two different types:
Public blockchains: These are open blockchains where anyone can participate as a node in the decision-making process. These ledgers are not owned by anyone and are also known as a permission-less ledger. Users may or may not be rewarded for their participation. All users of the permission-less ledger maintain a copy of the ledger on their local nodes and use a distributed consensus mechanism in order to reach a decision about the eventual state of the ledger.
Private blockchains: These blockchains are private and are controlled by a consortium or organizations that have decided to share the ledger among themselves. Anyone wanting to join the blockchain requires permission from the consortium or organization to join the blockchain.
Characteristics of Blockchain
Major characteristics of blockchain which enable secure data management in the healthcare industry are:
Distributed consensus: The consensus mechanism, where a single version of the truth that is agreed upon by all parties, without the requirement of a central authority, ensures that the data on the blockchain is incorruptible.
Transaction verification: Any transactions posted from nodes on the blockchain are verified based on a set of predetermined rules and only valid transactions are selected for inclusion in a block.
Smart Contracts: Smart contract ensure the accuracy of the data outcome by defining a set of conditions in a blockchain network where all the computers on the network execute the program upon meeting the required conditions. Smart contracts work on the principle that Code is Law.
Security: Blockchain ensures the integrity and availability of data by using proven cryptographic technology. Cryptographical linking of records makes it impossible for one party to manipulate previous records without breaking the overall consistency of the database.
Immutability: Records once added onto the blockchain are immutable as even the possibility of rolling back the changes will require an unaffordable amount of computing resources. To take the example of bitcoin, for a malicious user, altering the previous blocks would require computing the Proof of Work (PoW) again for the existing blocks to the blockchain, which is arduous.
These characteristics of Blockchain ensure concrete security for data where even a small addition or deletion in the data requires an enormous amount of time and resource. This features of Blockchain could place the patient at the center of the healthcare ecosystem and will increase the security, privacy, and interoperability of health data.
Stay tuned to understand the use cases of Blockchain in the healthcare industry which will be discussed in the next blog.
Santosh Kumar
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- Blockchain use cases in Healthcare Industry - July 4, 2018