COMMENTARY

# Could Blockchain Transform Healthcare?

Meda Raghavendra, MD

Disclosures

May 04, 2018

Last fall, I was at a Thanksgiving party when one of my friends announced that he had bought some bitcoin. Although I had heard about bitcoin in the news, I had not paid much attention to it. But a 14-year-old boy at the gathering started explaining what he knew, and I was stunned.

Soon I started researching bitcoin and came across the term "blockchain." As I read further, I found that there were many applications of blockchain in healthcare. Ever since, I have been exploring the emerging field of "decentralized ledger platforms."

#### Life Is Transactional

Many aspects of our lives involve some type of transactions with others, whether they involve currency, contracts, or services. If those transactions are stacked together in ledgers and authenticated in a reliable manner, they become useful. For example, banks keep ledgers of all financial transactions in a central server, and they verify the authenticity of the transactions.

However, the ledgers are centrally located and are susceptible to hacking and manipulation. If, instead, the ledgers were distributed among a network of computers throughout the world, the risks would be mitigated.

Following the financial collapse in 2007-2008, people began looking for alternative peer-to-peer currency transactions that did not depend on financial institutions. The result was the birth of bitcoin, an entirely digital currency that is based on blockchain technology (BCT).[1]

BCT consists of basic entities called blockchains. As the name indicates, a blockchain is a chain of linked digital blocks. Each block is a set of verified transactions that is given a unique digital signature generated by mathematical algorithms. Encryption makes the blocks resistant to hacking, double spending, and manipulation.

The digital signature for each block depends on the underlying transaction entries in the block and a mathematical function called "hash." The hash function provides the ability to produce a unique data output of a fixed size (256, for example) for an input of varying data sizes. The output is called the hash key and depends on the underlying ledger entries. If someone changes the entered information, the hash key also changes.

Each block also contains the hash key information of the previous block in the chain. That means that each block depends on the previous block in the chain.

The same transaction details for each block are distributed, synchronized, and maintained throughout the network of computers, thus operating in a decentralized manner. This means that the same ledger is widely distributed, and there is no central authority or server controlling the blocks.

Thus, BCT is a "distributed ledger technology." This makes it extremely difficult and expensive to manipulate and hack the information contained in the individual transactions or blocks.

Blockchains may be either public with open access to all or private with access only to entities granted permission. Both types of blockchains are necessary for healthcare applications, but permissioned blockchains are necessary to comply with privacy laws such as HIPAA.

In addition to blockchain, there are a few other emerging technologies in this category, including Tangle, Corda, hashgraph, graphchain, and the Cicada platform.[2] The rest of this article focuses on BCT.