Blockchain was supposed to transform healthcare, education, and other social services, but so far it hasn’t happened. As the focus has shifted to decentralized finance (DeFi) and infrastructure projects, not many people are talking about blockchain for social impact anymore. What happened? Is there still hope for blockchain outside of finance?
If we get back to the heady days of initial coin offerings (ICOs) and initial exchange offerings (IEOs), there were hundreds of projects promising to “revolutionize” and “disrupt” both the real-world economy and social life.
Universities, hospitals, charities, state authorities — it seemed like all of them would soon abandon traditional contracts and record-keeping to switch to smart contracts, and that all our records would become transparent and immutable.
And yet, 2020 comes to an end and nobody seems to be recording COVID-19 test results on blockchain. Chances are that your most recent house rental contract wasn’t registered on any distributed ledger, either. Also, I certainly don’t expect that the copyright on this piece will be recorded on the blockchain.
Looking at the list of IEOs and ICOs completed in 2020, one would struggle to find a single project in the healthcare and education sectors, or similar fields:
Do crypto users even care about “revolutionizing” anything anymore?
Something unexpected happened in the crypto sector, in 2020. More than $14 billion was locked in DeFi protocols that has nothing to do with the real-world economy.
People would lock up their ether (ETH) in Compound to borrow USDT, then lend the same USDT on Curve to farm CRV, then use the liquidity provider tokens they got on Curve to farm SNX on Synthetix, then… Well, you get the idea. Who cares about revolutionizing higher education when you can earn 100 per cent and more farming DeFi tokens?
Another segment that has been growing rapidly this year is crypto payments, with thousands of businesses starting to accept bitcoin (BTC). At CoinsPaid, we have received double the number of the integration requests from merchants compared to 2019, and even PayPal now lets US users buy and store BTC.
Clearly, users are eager to earn crypto and pay in crypto, but what about the progress of blockchain technology in the real world? Let’s take a look at some major “social” use cases and compare initial expectations with the current state of affairs.
Blockchain in healthcare: the three big obstacles
On the surface, it seems like healthcare and blockchain are a match made in heaven. At this point, your medical records are a messy stream of data coming from various sources: your GP, hospitals, insurance companies, labs, pharmacies, and so on.
There is no unified storage system for these records, so you have to print them out all the time and bring them with you when you go to the doctor. They also get stolen easily: in 2019, 40 million patients were affected by data breaches in the US alone.
Wouldn’t it be nice to have more control over your health data? Imagine providing your doctor or insurance company with remote access to your medical records, or never having to print out exam results again, or not worrying that you may receive a bill for medical treatments you never had.
Theoretically, all this could be achieved using blockchain, but there are three serious challenges:
- Legal compliance. National standards like the Health Insurance Portability and Accountability Act (HIPAA) are very stringent about data privacy and record management. For example, the HIPAA Security Rule prohibits the use of “mathematically-derived encryption” of protected health information, which is one of the core features of blockchain.
- Data storage. Contrary to what many people believe, you can’t store the actual medical records on a blockchain as it would be highly expensive. You’d only store records of records, while the actual test results, scans, and insurance contracts would remain elsewhere. You’d use your secret key to grant permission to those files, and the recipient should be able to access them wherever they are. How? It’s not clear.
- Integration. Blockchain-enabled healthcare will only work if a high percentage of medical institutions participate. Developing such a platform is expensive enough, and implementing it across the whole region – or even a single city – will require funding and support from local authorities.
What is actually being done?
Most articles about new blockchain healthcare projects are nothing else than press-releases. They announce plans, not achievements. As David Gerard wrote in his book “Attack of the 50-Foot Blockchain,” in this industry:
“‘Talking about’ becomes ‘considering doing,’ becomes ‘will do,’ becomes ‘is doing.’ Even if a given blockchain trial does in fact happen, later failure is not documented.”
This is not to say that there are no working projects in this area at all. For example, a blockchain solution by VeChain was implemented by a private hospital in Cyprus, in summer.
There are also apps such as Patientory that deploy blockchain to record health information like an individual’s heart rate and weight. But those are still minor, localized initiatives, which are far from “transforming” the whole industry.
But what about Estonia’s e-Health system? It uses a solution called “KSI Blockchain” to secure the integrity of medical files and access logs on a national scale. While KSI Blockchain does use a hashing function to authenticate records, it’s not a blockchain. The use of the word is simply a marketing trick.
Digital diplomas are on the rise, but that’s about it
When it comes to education, the most obvious use case is digital diplomas as fake degrees are a real problem. There’s already an open standard for that called “Blockcerts.” It’s used by MIT, the Hong Kong University of Science and Technology, and the University of Padova, among others.
Does this mean that soon every student and employee will have “an immutable portfolio of learning experiences?” No.
In Gartner’s 2018 CIO survey, 37 per cent of higher education CIOs said they were not interested in blockchain. In 2019, the figure rose to 47 per cent. In short, half of IT decision-makers at educational institutions don’t think that blockchain can help them much.
High payment processing costs and fake documentation are problems that blockchain can solve, but there are hundreds of business issues blockchain can’t offer a solution to. So there’s no point in striving for a total blockchain-led transformation or disruption of anything, be it healthcare, e-commerce, or something else. Let’s focus on local, concrete issues — one business at a time.
NOTE: The views expressed here are those of the author’s and do not necessarily represent or reflect the views of BeInCrypto.