At its May 16 event at the Cove, “Blockchain and the Implications for Business, Finance and Healthcare,” the Executive Next Practices Institute (ENP), a panel of speakers reviewed blockchain’s potential impact on banking and finance, insurance, lifesciences, retail, and healthcare.
Blockchain is a distributed ledger of transactions that exists over a network of computers on the internet rather than a central source. This software was first developed as the system underpinning the cryptocurrency bitcoin.
Blockchain can potentially improve:
• Customer identification, cross-border micropayments, and cryptocurrency payments
• Health information exchange, including wellnessconnected medical devices, use of FitBit data, and e-consent for clinical trials
• Movement of goods, including smart track and trace, supplier transparency, and tagging counterfeit products
“We were pleased to have top thought leaders share their perspectives and forecasts on rapidly evolving blockchain impacts and opportunities with our Executive Next Practices Institute middle and large cap leadership audience last night,” says Scott Hamilton, ENP CEO. “It is clear that many industries have not strategically prepared for the potential disruption this technology will produce over the next three to five years.”
ENP forums provide members, including C-suite and key executives with a “first look” at the emerging technologies and trends that can impact their businesses over the next 12-24 months. Industry thought leaders interpret trends, putting new developments in context to enable ENP members to better anticipate and plan for future needs.
Hamilton showed a brief video describing the next practice of private communities where companies can interact with members and be matched with potential financing sources. “The real reason we are here is disruption,” Hamilton says. “What we need to do now is be bold. We are looking at changes of capital formation and how it is distributed. Blockchain is the next thing that is going to move you and your organization beyond the status quo.”
According to C. Rees Morgan II, founder and CEO, QubeChain, LLC., a company that integrates blockchain applications, blockchain acts as a distributed ledger but is not used for storing large amounts of data. Blockchain is similar to a database– it has a database engine and storage capabilities with specific standards – but it is sequentially indexed based on time, with a hash number, and a public and private key. A blockchain can act as an index for an entry into a database system.
There is just one protocol to get into a blockchain database. Data is stored on a peer-to-peer network of distributed nodes that have a copy of every transaction. For example, Bitcoin is stored on a database of nodes.
Blockchain is an immutable, permanent record, like a tattoo. While you can write a transaction into the blockchain once and can read it many times, you cannot overwrite it. Using blockchain is contingent upon a certain level of trust. There can be both private and public blockchains with different levels of visibility. For example, if inventory is changed in a company, and it is written in a blockchain node, anyone who has a key can view it.
Morgan pointed out that you cannot dehash a hash key. This makes blockchain useful for fraud prevention applications where establishing provenance and chain of evidence is important, such as tracking smart tags on designer bags, tracing fish to restaurants along the supply chain, or authentication of a pair of Nike shoes.
Potential risks and benefits of blockchain
“For people in this room, timing is everything,” Morgan says. “You need to know where your business or your industry is hit with blockchain. Healthcare is going to get so ubered it won’t know what to do with it.” For example, hospital room sensors could monitor patients via the Internet of Things through blockchain. Another use of blockchain is caching portable healthcare data over a patient’s lifetime to streamline healthcare delivery. He noted that insurance companies could also access this data and use it to choose which patient conditions to insure.
According to Morgan, blockchain is important to managing budget cycles amid disruptive technology innovation. He recounted that during a recent visit to Hong Kong, he got a pizza delivered to his hotel room. The small round stand that prevented the pizza from getting squished by the box top did double duty as a movie projection lens. “Who would have thought that Proxima would have been ubered by Pizza Hut?” Morgan said. “A lens in the Pizza Hut box enables you to project a movie from your phone on the wall in Hong Kong? Think about how your organization can be ubered into [blockchain-enabled] smart contracts.”
According to Robert Schwentker, founding President of Blockchain University, the $30 billion bitcoin trove is based on open source software residing on separate nodes on thousands of computers around the world. “Banks woke up when they found out about this,” Schwentker says. “When governments issue statebacked cryptocurrency, it will transform how finance is done.” According to Schwentker, regulatory agencies are not keeping up with the dozens of governments that now recognize bitcoin. Industry is creating blockchain consortiums to develop standards and practices, including the Enterprise Ethereum Alliance, the Hyperledger Project, a cross-industry group led by the Linux Foundation; and R3, a financial sector consortium to share distributed ledger technology.
Arun Ghosh, partner and principal at KPMG healthcare advisory services, stated that blockchain offers auditability. “You have an immutable record across that spectrum from when a patient is admitted to when they are discharged,” Ghosh says. “Walmart does blockchain for produce. Why? Because they don’t want spurious introduction of produce into their supply chain.” Both pharma and the FDA are interested in blockchain technology as it can do drug tracking with immutability.
How might blockchain impact a company’s supplier and customer chain? According to Morgan, logistics and supply sourcing can be conducted in like-minded manufacturing, where multiple companies work together. The added security of instituting blockchain could lower the cost of insuring a company’s supply chain risk.
The speakers fielded audience questions about blockchain verifiability, saying that fraud is currently dealt with by consensus algorithms. Audience members agreed that they need more education on how to implement blockchain into their organizations.
The evening concluded with a quick presentation by Ken Hubbard, CEO of Capstack West, on automated sourcing of capital for company matching (www. capstackwest.com). This ENP event was delivered in alliance with the CFO Leadership Council as well as the Device Alliance and tweeted at #enpforum. More information on ENP is available at enpinstitute.com.