Like any other innovation that has swept the information technology (IT) landscape in the past, blockchain is making initial strides accompanied by hits and misses.
However, what demarcates blockchain from technology trends like Cloud, Analytics and Artificial Intelligence (AI) is the complexity involved in its implementation as well as its interdependence on other technologies.
In healthcare, for example, blockchain promises huge opportunities in terms of reducing time for administration tasks and improving operational efficiencies. With unprecedented data management capabilities, blockchain can address many challenges healthcare industry faces today. Managing the overly complex e-health records, insurance data, and patient data can be easier with more flexibility and transparency offered by blockchain. It also can help counter the professional misconducts associated with drug sales and clinical trials.
However, current healthcare practices need to undergo massive transformation to make blockchain the hub of these processes. Integrating the data which is spread across multiple devices and multiple processes onto the blockchain network is one of them. Addressing the privacy concerns associated with sensitive healthcare data and adhering to complex regulations like GDPR make security an inevitable component in this transformation. Further, storage becomes an expensive affair in the decentralized concept offered by blockchain, which will further increase the cost of IT investments. At present, only big organizations that can invest extensively in digital technologies without expecting immediate returns can think of such transformation.
Another common challenge associated with blockchain implementation is the lack of universal standards, preventing organizations from creating interlinked processes that can be accessed across multiple platforms across multiple geographies and clients.
Despite the concerns over the implementation, BIS Research expects that global healthcare market spend on blockchain will hit $5.61 billion and help the industry save up to $100-$150 billion per year by 2025 in data breach-related costs. Savings also can be realized in IT costs, operations costs, support function costs and personnel costs, and through a reduction in frauds and counterfeit products.
Merck and Walmart have embarked on a major blockchain project in their drug safety and security practice. The project is part of the U.S. Food and Drug Administration’s Drug Supply Chain Security Act (DSCSA) Pilot Project Program and is powered by IBM technology.
“The program is intended to assist drug supply chain stakeholders, including FDA, in developing the electronic, interoperable system that will identify and trace certain prescription drugs as they are distributed within the United States,” IBM said.
Supply chain management is an important segment propelled by blockchain. It reduces the pain associated with tracking the goods and verifying its authenticity every now and then. With blockchain acting as a secure lock that prevents any kind of mishandling, suppliers and logistics managers have more reasons to embrace the trend. However, the process cannot be complete without the support of other technologies.
For example, tracking an expensive piece of equipment will require verification of the authenticity at every node to ensure that no tampering has occurred. Another use case, for example, shipment of a refrigerated item, will require continuous monitoring of temperature and other related factors that ensure that the product reaches the destination in the desired manner. In all of these cases, the network will have to interwork with technologies like IoT to collect data from sensors attached to these items. Thus, IoT will hold key to the success of blockchain especially in supply chain scenarios.
Despite these concerns, a number of use cases which are running effectively are already being reported from multiple corners of the world.
Bumble Bee Foods, which deals with canned tuna, salmon and other seafoods, uses blockchain to trace the journey of tuna from ocean to the remote islands of Indonesia and local retailers. The company uses SAP’s Cloud Platform Blockchain that allows “consumers access the origin and history of Bumble Bee Foods’ fair-trade-certified Natural Blue by Anova yellowfin tuna using their smartphones to scan QR codes on 12-ounce bags of tuna steaks.”
Golden State Foods (GSF), a food service company based in Irvine, Calif., has run a pilot with IBM to track fresh beef’s movement. The project uses IoT devices to monitor the temperature and blockchain to manage the business rules between supply chain partners.
Similarly, the application of AI will help improve the performance of certain blockchain use cases. Security, for example, is one area where experts see the best convergence of AI and blockchain. With its data encryption capabilities, AI could also address the regulatory concerns associated with data privacy. Further, AI capabilities can also be leveraged to improve the performance of blockchain in multiple ways like intelligently monitoring the performance of the nodes and removing the old data links.
Considering the complexities involved in designing a blockchain application, mostly customized project, the cost of implementation may be unpredictable. Since the industry is in the nascent stage, there is scarcity of professionals, making the professional charges very high. A simple blockchain project may require professionals like designers, developers, QA analysts, business analysts, technical architects, project manager, deployment experts and management sponsors.
The hype apart, blockchain has emerged as a strategic priority for many organizations, especially in the fintech, healthcare and supply management sector over the past one year. Going forward, the industry is expected to witness robust implementations of blockchain supported by other emerging technologies like IoT and AI.