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Though there’s a lot of hype around Blockchain in healthcare, it presents more pitfalls than promises at this early stage.
Tokenized platforms such as Ethereum have an incentive to hype the technology to increase the value of the token, says a new report by Tieron, a company that claims to be the first to complete a Blockchain healthcare project in 2015 having been the first partner in Philips Blockchain Lab.
This is a part of the hype overload cited among the pitfalls presented by the Blockchain technology which Tierion’s Blockchain Healthcare 2016 Reports – Promise & Pitfalls says are more than its promises at this early stage. It adds that the hype around Blockchain has led to misinformation and misunderstanding.
Tierion, which turns the Blockchain into a global platform for verifying any data, file or business process, says the report was necessary to separate the hype from the reality and share “our perspective after a year of working with the world’s largest healthcare and insurance companies.”
It is said to provide a balanced perspective that addresses the opportunities and risks for the use of Blockchain technology in healthcare.
The report says:
“Analysts and professional experts are issuing overly optimistic reports in an effort to make their mark on the industry.”
It continues: “There's little penalty for them to be wrong about predicting the future. The consequences for those making strategic technology decisions can be disastrous. Betting on technology before it’s ready is a quick way to lose your job. Before making any commitment, ask hard questions and compare new technology to existing solutions. Start small and scale up once something has demonstrated value. Tokenized platforms such as Ethereum have an incentive to hype their technology to increase the value of the token. This risk hasn’t existed with prior generations of technology. Blockchain hype has led to misinformation and widespread misunderstanding. This is an important factor to consider when evaluating vendors.”
Other pitfalls mentioned include Blockchain vendors seeking to lock-in customers into their platforms, high switching costs that give vendors control and pricing power, immature infrastructure with most Blockchain technology being experimental and untested, patient-controlled data and deploying wallets that create a large key management problem.
About the pitfalls, it says:
“Healthcare technology moves slowly, in part because of the high consequences of failure. People can die. Healthcare data is a prime target for hackers. Cybercriminals sell medical records on the dark web for $20 compared to $1 per credit card number. These pressures increase the need for companies to use proven technology.
Most Blockchain technology is less than two years old and has not been tested in a production environment. Smart contracts, Blockchain identity, decentralized systems, and other popular buzzwords are in a very early stage of development.
Developers with Blockchain expertise are rare. Blockchain developer tools are nascent. These factors increase security risks and make the cost of developing with Blockchain platforms higher than existing technology stacks.
Public Blockchain platforms are constantly attacked and subject to security exploits. For example, in Q3 2016, Ethereum suffered two attacks that shut down a large percentage of nodes. An exploit in a smart contract resulted in the loss of $60 million USD. A political decision to rectify this exploit led to a network fork. There are now two competing versions of Ethereum. The risks of building mission critical applications on unstable infrastructure is significant. Over time, countermeasures to attacks may harden the security and resilience of Blockchain networks.”
Though it also stated that most of Blockchain technology is not ready for mainstream deployment yet as most projects have “not evolved into production ready software due to technical and regulatory challenges,” the report highlighted promises of the technology too.
They include data integrity and security of patient data, reduce regulatory and compliance costs, optimizing interactions between healthcare and insurance companies and its disruption tendencies of mid-sized companies and startups who have the opportunity to form consortiums against incumbents.
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