Blockchain: Trust Changes Everything

What is Blockchain? What is the “Byzantine” problem in relation to Blockchain Technology? In which way is this technology helping human beings gain trust in health care and more? Read the brilliant article by Sascha Mundstein.

Blockchain technology is a unique and unexpected combination of three subject areas: Internet, cryptography and game theory. The first two of these disciplines are obvious: Blockchain works over a decentralized peer-to-peer network on the Internet, and encryption technologies are known to play an important role in ensuring the authenticity of data. But what about the game theory? And what does this have to do with our health system?

In simple terms, the blockchain is a publicly accessible database that stores information so that nobody can change it later. This is very difficult to accomplish if any subscribers have write access to the blockchain, since these subscribers can theoretically also store incorrect data corresponding to their own interests. Thus, you need a mechanism to get consensus about the right version of the data.

This problem is referred to in mathematics as “Byzantine”, or as the “problem of Byzantine generals”. Imagine, a number of small armies, all commanded by independent generals, each self-sufficient in its own right, wanting to conquer a city together. In order to be successful, they must coordinate their actions, to attack simultaneously, for example. However, this is not easy: all generals distrust each other on principle; some generals are traitors or are, in fact, a besieged city. The only communication method is an insecure system of messengers that can be intercepted or dishonest.

But there is now a mathematical method that makes it possible to reach consensus in such a situation when there are enough like-minded people. This principle also uses the blockchain to reach consensus about the “right” data. This allows the user to have confidence in the correctness of the data, but must not trust any participant in the network itself.

What does this have to do with the health system?

In many countries with developed economies, health systems struggle with acute and chronic problems which are very similar from country to country. Rising costs, incompatible IT systems, inefficient structures, unfair distribution, lengthy processes, lack of transparency, poor data protection to call. Experts agree that these systems are not sustainable in this form. But what is the basis of these grievances?

It is obvious that the basic problem is due to the different interests of the participants in this complex interaction between numerous actors. Doctors, hospitals, clinics, laboratories, pharmacies, pharmacists and service providers, nurses, research institutes, chambers, representative bodies, government agencies, tax authorities, health insurance funds, umbrella organizations, patient organizations, of course the patients themselves and finally simple taxpayers are all part of this complex, constituting often a considerable part of the economic value-added of a country. This maiden-like labyrinth could also be called “Byzantine”.

How can all these parties, with their different, sometimes precisely conflicting interests, reach consensus on health system regulations? And could blockchain technology change this system?

Take, for example, ELGA, the electronic health record. Here, data are stored by patients and patients who are treated, for example, in public hospitals. There is no doubt that this has many advantages. But what about the protection of privacy? Who controls this data? How to decide who can access it? How well are the data protected against theft, loss, forgery and misuse?

Those concerned, if asked at all, are forced to entrust this data to the people who manage these systems. The handling of the data by doctors, health insurance funds and other institutions is completely intransparent. It is usually not comprehensible whether or not a certain access to these intimate data was justified.

In a blockchain scenario, for example, the affected parties would be able to decide what to store. They would have complete control over their own data and could release this data themselves and revoke the release. They could participate anonymously in a clinical trial patient pool, thus speeding up medical research. Pfizer has already completed an experimental prototype in February 2017, complete with a mobile app for users and doctors.

There are countless other conceivable applications of block-block technology in the health care sector that could all solve this basic (Byzantine) confidence problem: for example, a logistics blockchain against drug counterfeiting; a health insurance blockchain (better: health insurance blockchain) for the transparent contribution calculation individually for each individual insured on the basis of the encrypted health data (without having to notify the insurance company); an accident insurance blockchain with automatic payout by means of crypto currency, and so on.

In any case, there is the chance to improve the factors of efficiency, cost-effectiveness, transparency, fairness and data security. Innovative pharmaceutical companies, as well as many technology start-ups are already busy preparing the health economy of the future. From today’s point of view, however, it is still difficult to say which ideas will prevail.

I cannot recommend to any of the many participants in the health care system, however,  to put the head before these developments in the sand. The solution may come from a completely autonomous global start-up DAO (decentralized autonomous organization), “decentrally”, ie from outside, completely independent of existing institutions, cash registers, hospitals, etc. Then the Byzantine generals of our health system would suddenly be there without their armies.

Short biography:

Sascha Mundstein (Harvard, INSEAD) is a developer and expert for emerging technologies at Pfizer, where he helps tranforming innovative ideas into solutions that help patients directly. In recent years, his focus has been on mobile technologies, the collection of patient data using sensors and wearables, the scaling of applications on global markets, and the development of new paradigms for the analysis of health data. In the past, Sascha Mundstein has worked in various areas, such as FinTech, language science, artificial intelligence and natural language processing, e-commerce and online marketing, as well as cryptocurrencies and Blockchain. His goal is the discovery, development and promotion of novel solutions and business models for the health economy of the future.