3 types of problems blockchain can solve
Blockchain is a new solution space waiting to be tapped by those who recognize a good thing when they see it.
Perspectives on the value of blockchain run the gamut from bored yawns to hyperbole. One conference attendee tweeted that he heads for the door at the mere mention of blockchain. Meanwhile, a well-known businessman is selling his blockchain and crypto tweets for $105,000 each, and new blockchain-themed conferences are popping up all over the world featuring speakers who claim that blockchain is going to change everything and make everythingbetter.
The truth about blockchain lies somewhere between the yawns and the appeals to incredulity. Both extremes represent lack of understanding as to the value blockchain potentially injects into the marketplace. Authors of a 2017 Harvard Business Review article recognized that “Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems.”
No, blockchain isn’t going to change everything, but it is going to change some things. Some of those changes will be dramatic, and some of them will have massive impact on society.
Specifically, blockchain has the potential to have major impact on certain types of problems and their solutions. What are those problem types?
Network problems
Blockchain solutions, particularly when adoption of those solutions is incentivized by a supporting cryptocurrency, has the potential to solve network problems. I’m not talking about computer networks, nor am I talking about social ones. I’m talking about the network effect, which occurs when the value of a product or service by one customer is dependent on use by others of that same product or service.
Who’s going to go first? Who’s going to adopt a product or service when its value depends on whether others have adopted it as well? Who’s going to adopt early at a point when the benefits are still nonexistent? Who’s going to buy the first telephone — and pay for the infrastructure to make phone calls feasible — and who’s going to sign up for the first Facebook or Instagram account?
A sufficient number of people, it turns out — at least for telephones and social media, because people value communication. There’s adequate incentive.
Not all new technology is welcomed by an existing sense of need. Blockchain technology has the potential to address that kind of problem. For instance, cryptocurrency can be granted to early adopters to reward them for acting on their belief in the future value of a new technology.
Trust problems
Blockchain is also well suited to solve trust problems — not by creating trustworthy systems but by eliminating the need for trust altogether. Questions about trust represent business costs. When costs go down, value goes up.
Blockchain has the potential to put trust back where it properly belongs — in establishing and maintaining mutually beneficial human relationships, such as those between doctors and patients with complementary needs. Doctors need work, and patients need care. What they don’t need is to be worrying about privacy and electronic health record issues.
A property inherent in blockchain is distributed trust protocol, where correlation between certain nodes of information simply cannot be accidentally or maliciously discovered. Perhaps for the first time, privacy can actually be protected and trust potentially rendered a non-issue.
It sounds too good to be true. It may have its limitations, but at this point we have technology we didn’t have before that makes new things possible — in the form of blockchain. That sounds like value to me.
Problems of scale
It is no small issue that certain problems have not scaled well with centralized computing solutions. Blockchain is driven by distributed computing agents that can naturally and easily scale to massive proportions, although issues of scalability are still being worked out.
The company I lead is developing a Universal Patient Index for which scale is a predominant issue. We’re finding that certain properties of blockchain allow it to solve both network problems and problems of scale currently ailing the world of private patient health information.
This has the potential to impact every healthcare enterprise and provider, as well as every patient, by significantly reducing costs inherent to patient identity transactions and by putting patients in control of their own health information. Solving patient identity problems could also significantly reduce medical errors that lead to patient injury and even death.
That strikes me as dramatic change with potentially massive impact. At this point, blockchain is our best bet to bring about that kind of change.
Not a dirty word
Despite what blockchain naysayers express at conferences, on Twitter, and in cynical blockchain memes, blockchain technology offers tremendous potential value to humanity. Blockchain is not a dirty word. It’s a new solution space waiting to be tapped by those who recognize a good thing when they see it.
I invite anyone interested in further discussing the value of blockchain as a solution space — particularly in the realm of healthcare and health information — to join me at the Blockchain Healthcare Summit today and tomorrow at The Wink Hotel in Washington, D.C. At 1:15 p.m. tomorrow, August 16, I’ll be participating in a use case panel on patient and provider identity.