To Kill a Blockchain — Part II
Early 2017, my college friend moved to Estonia to start up a new business called blockhive(www.blockhive.ee), which is incubator and Blockchain technology provider. I did not know where Estonia, but quickly found that a little over one million Estonians decided to abandon their old record-keeping system and to introduce a new system called X-Road leveraging the Blockchain technology.
What is happening in Estonia today is absolutely astonishing and promising, however, my words are not eloquent enough to open your eyes. So, I want you to read these two article — one on The New Yorker, “Éstonia the Digital Republic” and another on Forbes, “Lessons From The Most Digitally Advanced Country In the World”. If you don’t feel anything after reading this article, please don’t waste your time. To my disappointment, Blockchain is not your thing.
Blockchain… it’s about authentication
Many people describe Blockchain as a distributed ledger. While this description is not wrong, you probably think “Who cares?”. It is like tell your teenage son and daughter to study accounting. They don’t understand the importance and don’t care. But, how about authentication, i.e. what is real and not real? Most of you care about the quality of food. When you go to your neighborhood Whole Foods and pick up a pack of Driscoll’s organic blueberry. How do you know if this is really organic? We trust the USDA’s organic label. We trust Whole Foods buying the fruits from Driscoll’s. Then, we trust Driscoll’s honesty about their sourcing. We are also relying on the farmers not mixing up their organic and non-organic produce. See, in order have the real organic produce, you are depending on the “chain” of trusts. You know how vulnerable this is as one dishonesty can destroy the whole chain.
For me, Blockchain is a better, although not perfect, solution to bring authenticity to this world. Distributed ledger means that many people are checking the authenticity of the transactions and data and we can remove the dishonest chain from the system relatively easily. Before Blockchain, we couldn’t do this because it was too expensive to do so.
Data Disrupts Healthcare
A 2013 Institute of Medicine Report estimated that more than $750 billion — nearly one-fourth — of annual U.S. healthcare spending is wasted and the most of the waste was actually coming from the available and reliable medical data for doctors and hospitals. Until the Health Information Technology for Economic and Clinical Health Act, which was a part of Obamacare, the doctors and hospitals in the United States were not required to keep the medical data electronically and very often kept in the physical cabinets. As a result of the Obamacare, more than $30 billion in government funding was allocated to incentivize physicians and hospitals to implement electronic medical records, creating explosion in the amount of digital data that can be leveraged by innovative companies to analyze, compare and drive market improvement in the quality and cost effectiveness of clinical care. While leading electronic health record (EHRs) companies like Epic and Cenor (read this interesting article, Cerner vs Epic: Battle of the HER Titans) are taking market shares, transferability, privacy and integrity of the data are still concern.
Blockchain is no brainer solution for EHR. One of the upcoming companies is called Medicalchain, which discusses the challenges (and opportunities) HER is facing rather well:
The biggest challenge that is being faced by health care systems throughout the world is how to share medical data with known and unknown stakeholders for various purposes while ensuring data integrity and protection patient privacy. Although data standards are better than ever, each electronic health record (EHR) stores data using different workflows, so it is not obvious who recorded what, and when and hence Creating a trusted environment for decision-making is a challenge for medical fraternity. The growing focus on care coordination and EHR access across the care continuum has raised questions about how to ensure that multiple providers can view, edit, and share patient data while still maintaining an authoritative and up-to-date record of diagnoses, medications, and services rendered.
The EHR problem is not merely a problem of data sharing logistics. Every solution that deserves serious consideration in a national healthcare system needs to put patient privacy and informational freedom of choice first in its list of priorities. In US for almost a decade, hospitals have been waiting for EHRs to usher in a shiny new era of standardization and high-quality health care. But while federal laws and incentive programs have made health care data more accessible, the vast majority of hospital systems still can’t easily (or safely) share their data. Solutions should be sought in which patients themselves control whom to divulge their identity, where to remain pseudonymous, and which pieces of data to share.
Anyway, it is difficult to know who will eventually succeed, but I know the opportunity set for “disruption” (yes, it’s an old buzzword) is huge.
Back to Estonia
In our previous Outlook and The Allocators Without Borders, we discussed the opportunities for disruptions in financial and healthcare sectors. Undoubtedly, the disruption is happening and it is not difficult to predict our future… but, how about the government? It seems that this is the last frontier of the disruption. That’s why Estonia is interesting. It’s a small country enough so that it’s easy to make a big change. Being a part of EU is also positive as it is influencing other European countries (although EU is pressuring on Estonia for creating its own cryptocurrency). The story of Estonia is not over yet. I will discuss more in the next article.
If you want to learn more about Blockchain by yourself, I recommend you should read articles on Harvard Business Review.
- A Brief History of Blockchain — https://hbr.org/2017/02/a-brief-history-of-blockchain?referral=03759&cm_vc=rr_item_page.bottom
- The Truth About Blockchain — https://hbr.org/2017/01/the-truth-about-blockchain
- The Impact of the Blockchain Goes Beyond Financial Services — https://hbr.org/2016/05/the-impact-of-the-blockchain-goes-beyond-financial-services
If you want to learn a lot more about Blockchain/Ethereum by yourself, you can purchase the excellent reports written by Coindesk.
- Understanding Ethereum ($350) — https://www.coindesk.com/research/understanding-ethereum-report/
- Smart Contracts ($100) — https://www.coindesk.com/research/smart-contracts-report/
To Kill a Mockingbird (1962)
Small-town Alabama, 1932. Atticus Finch is a lawyer and a widower. He has two young children, Jem and Scout. Atticus Finch is currently defending tom Robinson, a black man accused of raping a white woman. Meanwhile, Jem and Scout are intrigued by their neighbours, the Radleys, and the mysterious, seldom-seen Boo Radley in particular. (source: iMDB)