It is important to understand what a blockchain system is: a blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block a timestamp, and transaction data (generally represented as a Merkle tree). By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.
A
blockchain is, in the simplest of terms, a time-stamped series of immutable
record of data that is managed by cluster of computers not owned by any single
entity. Each of these blocks of data (i.e. block) are secured and bound to each
other using cryptographic principles (i.e. chain). Now that we’ve got a basic
understanding of what a Blockchain System is we can dive right into
understanding hybrid blockchains.
Hybrid Blockchain
Hybrid
Blockchains could lie
somewhere in-between private and public blockchains, depending on their
architecture. Hence, to get a good understanding of hybrid blockchains, one
must first understand the differences between private and public blockchains.
As the name suggests, public blockchains are accessible to and managed by the
public. Anyone can participate in the upkeep and governance of the blockchain.
The most popular blockchain in the world, Bitcoin, is a public blockchain.
Participators are typically rewarded in the form of block rewards for their
contributions to the network to incentivise good behaviour on the part of
network peers. Since millions of users manage a public blockchain across the
world in real time, attaining consensus for a public blockchain is
time-consuming and expensive.
For example, the consensus
mechanism that Bitcoin uses, Proof of Work, relies profoundly on wasteful
computations for millions of devices to ensure security. By comparison, a
private blockchain allows limited access to entities outside a trusted few who
were involved in the creation of the private blockchain. Typically, private
blockchains have administrators who can control permissions of adding or
modifying data on a private blockchain. The most popular private blockchains
include the Hyperledger
fabric which is being developed as a competitor to Ethereum by IBM and
quorum, which is being developed by J.P. Morgan. Private blockchains are much
faster than public blockchains because the network is managed by a handful for
trusted nodes whose motives are clearly for the benefit of the network. Such
trusted nodes typically belong to financial institutions or universities to
maintain fairness and remain unbiased.
Now, it is clear that each type of blockchain has its strengths and
weaknesses. Public blockchains while being transparent and resistant to
tampering are slow and expensive whereas, private blockchains are somewhat
centralised but can deliver much higher throughput and speeds. As a logical
step, hybrid blockchains combine the benefits of both of the blockchains while
trying to limit the disadvantages. Therefore, with hybrid blockchains, we can
employ a public blockchain to make the ledger accessible to every single person
in the world, with a private blockchain running in the background that can
control access to the modifications in the ledger.
Hybrid Blockchains in the Real World
One of the leading hybrid
blockchain platforms, XinFin,
has developed a unique network for Ramco Systems for the management of supply
chain logistics. XinFin completed its ICO earlier this year and had since
developed its public-private blockchain on Ethereum (public blockchain) and
Quorum (private blockchain). There are numerous benefits to using a hybrid
blockchain like the speed of private blockchains combined with the security of
public blockchains. The private blockchain is used to generate a hash of
transactions which is later verified using the public blockchain.
Another real-world application of hybrid blockchains includes Ripple network and the XRP token. Ripple has
regularly been criticised for its centralised nodes which can arbitrate
transactions in the case of a dispute. But by adding a public blockchain to
verify the operations of its private blockchain can make the network much more
secure for its users.
The
main aim of Blockchain
is to create an immutable public ledger to ensure integrity of transactions. In
the past few years of its existence multiple different types of blockchain have
evolved from the original blockchain. The concepts of public and private
blockchains have come into being, these two are often confused together as they
both have very similar features. This article ensures to bring out the
difference between the two.
Public vs. Private blockchain
Public and private
blockchains are equally decentralized, peer-to-peer
networks where each member maintains a copy of a shared ledger that
stores digitally signed transactions. This ledger can only be affixed to,
but not edited. Participants in a blockchain
retain this ledger in sync through a consensus protocol. This produces a
assurance on the immutability of the ledger which cannot be tainted
even if there are some malicious members on the blockchain.
The difference between public
and private blockchain is related to the type of members allowed within the
network that preserve the ledger and execute the consensus protocol.
Public
blockchains
Public blockchains are open networks that allow anyone
to participate in the network, hence the name ‘public’. Such a network depends
upon the number of participants for its success, and hence encourages more and
more public participation through an incentivization mechanism. The best
example of a public blockchain is Bitcoin
where participants in the network (miners) are rewarded with BTC tokens.
In a blockchain, each block contains a record of
numerous transactions on the network. Creating new blocks gives out a reward,
also known as the “miner’s fee”. In a public blockchain, where there can be a
lot of participants on the network, it becomes necessary to maintain scarcity
of the reward tokens, and regulate who gets the right to create the next block.
To achieve this, each participant in the network must solve a complex
cryptographic problem (also known as “proof of work”). Whoever solves the
problem earn the right to create the next block (and gets the reward). The
disadvantage to this is, these problems are very resource intensive and take a
substantial amount of computational power to solve.
Another disadvantage is the public nature of the
blockchain itself. There is little to no privacy for transactions, nor any
regulation or criteria for participants to join. Public blockchains might be
suitable for projects in the public domain (such as Blockchain), but not ideal
for enterprise-level use cases.
Private
blockchains
Enterprises can set up private blockchains to protect
the privacy and security of their data. Participation in a private blockchain
requires an invitation, which itself is also validated by the network starter
or a set of rules that can put into place. Such a network is known as a permissioned
network, and puts a restriction on who is allowed to join. Private
blockchains can also restrict participant activity such that certain
transactions can only be carried out by certain participants and not others,
despite the fact that they’re on the network. This creates an added layer of
privacy.
Participation rules can either be set up by existing
participants, a regulatory authority or a consortium. All participants in a
network play a role in maintaining the blockchain in a decentralized manner.
An example of a private blockchain is Linux Foundation’s
Hyperledger Fabric,
designed to cater to enterprise requirements. Only entities participating in a
particular transaction have knowledge about it — other entities will have no
access to it. Because such a blockchain is lighter, it provides transactional
throughput that is orders of magnitude higher than in public blockchains.
The blockchain era has already begun. Taking into account the fast progress in the development of new and more efficient healthcare record systems, wearable devices, and medical examination systems implementing artificial intelligence, cryptography will become an important part of the way hospitals work. There are, however, a few improvements still needed in order for seamless blockchain adoption across the entire medical industry. According to Hyperledger’s survey, 42.9% of healthcare organizations suppose that the interoperability of electronic health records will help for faster blockchain implementation; with 28.6% of respondents ready to use this technology in care settings today. So, what are the benefits of blockchain technology in healthcare?
Data
Provenance and Integrity
With
an ongoing increase in patient numbers, healthcare providers have to manage
more and more health data on a regular basis. As the data volume increases each
year, it becomes harder for hospitals and clinics to process and store
information.
Data
managed by medical organizations includes:
·
Patient health information (PHI);
·
Electronic health records;
·
Data collected from IoT devices (Internet of Things) or monitoring systems;
and,
·
Medical insurance claims.
Secure
information sharing methods, which allow both healthcare providers and their
covered entities to verify the correctness of data, are crucial for ensuring
proper medical services. This is where blockchain comes in useful, as one of
its main advantages is data integrity. When information is recorded and
encrypted, it becomes impossible to change or remove.
One
of the blockchain approaches that allows for the secure recording and sharing
of information is anchoring data to the public blockchain. This method involves
generating a proof of data integrity. Using this proof, any user can verify the
data timestamp without the need to rely on third-parties. This method allows
users to:
·
Verify PHI integrity;
·
Perform unchangeable medical audits;
·
Prove the integrity of clinical research results;
·
Reduce audit expenses and ensure regulatory compliance; and,
·
Ensure data safety.
HIPAA
requires the usage of safe methods of communication between those who deal with
PHI stored in electronic form. That is why data encryption plays a crucial role
in ensuring data privacy and safety. Our team has a deep expertise in
developing digital solutions for the healthcare industry. One of our projects
is a HIPAA compliant online communication platform called MDChat that allows
patients to securely communicate with medical employees and be sure they are
protected from any hacker attacks.
More
Secure Standards
Blockchain
provides a more secure way to protect data than ordinary encryption. The new
technology allows for the implementation of new standards in managing insurance
claims, PHI, and medical records. It excludes intermediation in data sharing,
when using blockchain. Such consortiums as Hyperledger help
increase awareness of the advantages of cryptography and further explain how to
use blockchain in healthcare.
According
to the survey mentioned above, the main reason why medical organizations
hesitate to use blockchain is the lack of knowledge around this technology. A
quarter of respondents are still at the stage of education and exploration,
which is why responsible state organizations should make the corresponding
information more widespread among caregivers. Healthcare providers suppose that
this technology must pass several milestones before any adoption is possible,
including:
·
Technical proof of concept (PoC) (65.4%);
·
Security proof (38.5%);
·
Privacy proof (34.6%); and,
·
Regulatory approval (23.1%).
We
can spend a lot of time wondering why caregivers hesitate to implement blockchain
in their organization, though the answer is far simpler than it may seem: they
simply do not know enough about this technology and its advantages.
Data
Transparency
Besides
disintermediation, data integrity and provenance, healthcare providers see
transparency (55.2%) as one of the top advantages of using blockchain in their
industry. To better understand this aspect, let’s consider how it works in the
financial sector.
This
technology provides a decentralized register of ownership by recording every
transaction made through the system. It stores all details starting from the
formation of a data block, and ending with any digits related to a specific
transaction. Every device that is a part of the system stores a copy of this
block. Before making a transaction, the system confirms whether a blockchain
version coincides with another in the network. Therefore, each blockchain user
can identify the owner of a particular data block at any time. Furthermore, the
blockchain is not only a secure way to send money, but a fully protected data
sharing method that widens its potential use in healthcare.
Blockchain
in Healthcare: Usage
Caregivers
feel quite optimistic about fast blockchain implementation, with 37.9%
predicting that it will take only five years to adopt it across medical
organizations. For now, these organizations and professionals need examples of
blockchain, and how it can be helpful in their field. Here, we will cover
examples of blockchain use in the healthcare industry, describing existing
issues in the sector and considering possible solutions through the use of this
technology.
Blockchain
in healthcare examples include the following usage issues:
Problem:
Drug Traceability
One
of the most serious problems in pharmacology is drug counterfeit. According to
the Health Research Funding Organization (HRFO), approximately 10%-30% of drugs
in developing countries are fake. US businesses lose up to $200 billion
annually because of drug counterfeiting; however, the main reason is not in
counterfeiting itself, but, rather, that these drugs provide different effects
than their traditional medicinal counterparts. They may not help patients at
all, or may even be harmful and dangerous to a person’s health.
Blockchain-Based
Solution
As
all transactions in blockchain are times tamped and immutable, it is easy to
detect fraudulent drug dealers. There are two blockchain types: private and
public. Trustworthy healthcare blockchain companies have to register their
products in the private system to ensure authenticity and the high quality of
their medicines. Private blockchains are moderated by central entities, and the
fact that a specific producer or distributor has access to the so-called drug
blockchain is proof of drug authenticity. This is where blockchain transparency
comes in useful. Once a drug is produced and moves from the manufacturer to
retailer, the operational data is recorded on the blockchain. It makes it
extremely easy to verify the whole path of the drug, and determine all chain
links at any time.
Problem:
Data Security in Clinical Trials
Clinical
trials are used to determine the effectiveness of particular medicines which
cure specific diseases. These tests can either prove or disprove an offered
hypothesis. During clinical trials, researchers obtain and record a great deal
of information concerning statistics, test results, quality reports, etc. Each
scientist is responsible for specific research, making it difficult to control
everyone. Those data can then be easily modified or hidden in order to change
the whole outcome of the research performed. Criminals are interested in
recording the results that are beneficial for them, even if the data does not
coincide with the reality.
Blockchain-Based
Solution
This
technology allows users to prove the authenticity of any document registered in
the system. It provides proof-of-existence by adding data in the form of the
transaction and validating the information by all system nodes. As mentioned
above, blockchain records immutable data. This characteristic will allow for
the storage of results from clinical trials in a secure way, making it
impossible to modify data. Two doctors from Cambridge University conducted a
2016 study to see how blockchain can provide proof-of existence for clinical
trials. They found that comparing a unique data code, which is set by the
system, with the original makes it possible to verify whether the data of
clinical trials has been modified, thanks to the inner SHA256 calculator which
generates a unique hash every time a modification is made to the data.
Problem:
Patient Data Management
Patient
data privacy is strictly regulated by the Health
Insurance Portability and Accountability Act (HIPAA), and requires PHI
to be totally secure. There is, however, another problem related to PHI:
sometimes, patients need to share their medical records with third parties
(e.g. with pharmacies when they need to buy specific medicines). So, how can
blockchain help protect data while providing partial access at the same time?
Blockchain-Based
Solution
The
Blockchain
creates a hash for each PHI block, together with a patient ID. Using an API,
covered entities can receive the necessary information without revealing a
patient’s identity. In the same way, a patient can decide whom to provide with
access and whether this access will be either full or partial. Furthermore, a
patient can set specific third parties that would have to give their permission
for sharing the PHI, if the patient is not sure in what he or she is doing.
Blockchain
has a tremendous potential of use in different industries, including
healthcare. This technology has already become widespread in the financial
sector, but medical organizations still hesitate to implement it into their IT
systems. This does not mean, however, that there are no healthcare companies
currently using blockchain. Below, you will find a short list of startups that
have made this technology the base of their operational structure.
Blockchain
healthcare startups:
·
Guardtime (a blockchain-based
system for securing patient healthcare records);
·
Gem Health (an
initiative that promotes blockchain-based collaboration in healthcare);
·
Cyph (a platform for building secure
digital identities and ensuring protected communication between healthcare
providers);
·
MedRec (a blockchain-based
system for securing medical records management); and,
·
Blockchain Health (a
blockchain-based system for medical research management).
Blockchain
is an effective technology that can help prevent data breaches in the
healthcare industry. It is a secure and reliable method of recording, storing,
and sharing sensitive data. Caregivers will definitely benefit from
implementing this technology, while remaining HIPAA compliant with this method
of trustworthy digital protection.
Future Of Cryptocurrency 