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Blockchain was introduced by Satoshi Nakamoto (a pseudonymous individual or group) in 2008. It is an open, distributed ledger technology that records transactions between two parties in an efficient and effective manner. Managed by a peer-to-peer network, blockchain stores data in a “write once, read many” format. Data within the blockchain cannot be modified or deleted unless validated by all users in the network. Additionally, data is added in chronological order and secured through cryptographic methods. The concept of blockchain was first implemented in Bitcoin, which was the first digital currency to operate without the need for a trusted authority or central bank. Blockchain is often considered a foundational technology for payment systems.
Working of Blockchain
Blockchain is a peer to peer network technology and has three components:
- Distributed Ledger:
Users in the network record digital transactions into the shared ledger and verify them. Once the majority of users validate a transaction, it is added to the shared ledger.
- Shared Ledger:
Users in the network record digital transactions in the shared ledger and verify them. Once a transaction is validated by the majority of users, it is added to the shared ledger.
- Digital Transaction:
Each piece of data stored in a blockchain is considered a digital transaction. These transactions are organized into blocks, each containing a cryptographic hash. This hash ensures that transactions are added in a chronological or linear order.
- Patient Records:
Patient records, including disease registries, treatments, and lab results, are stored in a longitudinal manner on the blockchain. This approach enhances the healthcare sector’s ability to deliver improved patient care.
- Patient Database:
In the healthcare industry, there is a risk of records being duplicated or mismatched. Blockchain addresses this issue by storing the entire patient database in a single ledger. This ensures that, even if there are multiple addresses associated with a patient, the system will consolidate them under a single patient identification.
- Supply Chain Management:
In the healthcare industry, the blockchain network enables organizations to monitor supply and demand cycles throughout their entire life cycle. It tracks transactions, verifies the success of contracts, and identifies any delays or issues in the process.
- Interoperability:
Interoperability refers to a product or system’s ability to interface seamlessly with other products, both current and future, for implementation or access without restrictions. In a blockchain network, secure sharing of information with authorized providers eliminates the cost and burden of data reconciliation. Blockchain has the potential to transform revenue and drug supply management, clinical trials, and fraud prevention in the healthcare industry.
- Claims Adjudication:
In the context of insurance and patient claims, blockchain’s validation-based system automatically verifies claims as the network agrees on contract execution. Additionally, because blockchain operates without a central authority or server, it reduces the likelihood of errors and fraud.