You’ve probably heard of bitcoin and blockchain, especially if you are in the Fintech space, but what is a blockchain, and why does it have the potential to change industries?
In short, blockchain is a decentralized and distributed ledger that facilitates transactions and eliminates the need for a single third-party authority. One reason why security professionals are looking at this open-source technology is that it allows people to complete transactions without the need to have access to all of its various components. By having one time-stamped and verified blockchain piece, they can complete the transaction without knowing all the details. Basically, you break the pieces up and then bring the pieces together for an accurate and secure method for transactions. The completed ledger lives in the cloud and can be amended with another time-stamped verified blockchain.
The technology has been used mainly by bitcoin and financial institutions, but earlier adopters of security technology and sensitive information industries are looking at other use cases.
For blockchains to really take hold, major manufactures and technology vendors need to make heavy investments. IBM has made investments, and Accenture and Microsoft partnered to support ID2020 — a public-private partnership dedicated to solving the challenges of identity theft technology. Once the large technology companies start offering the software and/or service, users and clients can start to take advantage of the technology without building from scratch, since many might not have the resources to build to scale. Within three years, I see a lot of traction happening; hopefully it will take off in five years with more people using it.
Blockchain won’t replace current security technology but will be an additional security measure. In order to add onto the ledger, you’ll need keys to authenticate and decrypt, so it adds a whole new layer of security to the transaction. It creates trust among parties. For example, right now, if we needed updated information for a patient with another organization (i.e., a doctor or insurance company), we would need to send all their information, with that one transaction holding all the details. From a security standpoint, if that transaction is hacked, they now have access to everything. With blockchain, this information is broken into pieces, and so if it’s hacked, they would not have the right key to authenticate, and will not have all the information. And what information they do get will be less relevant.
Every transaction can be broken down into components. Take, for example, buying a home. You need to work with banks for wire transfers, the mortgage company to validate income, credit bureaus, verify the seller of the house, the city and property taxes, and validation of address. Currently, all pieces of this transaction are being passed around to each party with multiple accounts being created. With blockchain, each piece can come in separately and be a source of trust for the various parties. It allows for more automation by establishing trust and identity. Each party would have a trusted key or digital ID, and when put together with the other blockchains, you can get the information you need, and complete the transaction. To remain secure, keys can and will change all the time based on the transaction.
I’ve been monitoring the advancement and adoption of blockchain closely to see what we can start utilizing to be early adopters. I think it can solve a number of problems in the healthcare space. In my next post, I’ll share some use cases for blockchain in the healthcare industry and some of the hurdles we are facing.