How Will Blockchain Tech Impact Healthcare Investors? 0 338

Amazon, Berkshire Hathaway, and JPMorgan Chase, three economic juggernauts, announced they’re teaming up to tackle healthcare, a sector of the economy that’s proven elusive for presidents and private-sector reform efforts alike.

Amazon CEO Jeff Bezos weighed in on healthcare costs, commenting that “reducing health care’s burden on the economy while improving outcomes for employees and their families would be worth the effort.”

No question, Bezos is right. But radical reform in the U.S. healthcare system might not come from these massive, centralized global players. Instead, the world’s newest transformative technology could hold the answers and affect stock prices across the board in one of the tallest pillars of the economy.

Blockchain in healthcare, blockchain everywhere?

A 2016 Deloitte study offered up that “Blockchain technology has the potential to transform health care, placing the patient at the center of the healthcare ecosystem and increasing the security, privacy, and interoperability of health data.”

Blockchain, which creates a decentralized, autonomous network of trust to share and record information, offers myriad benefits for both patients and care providers: a secure exchange of information without intermediaries, lower costs, secure patient identities, ease of sharing real-times updates across parties; smart contracts; and secure longitudinal health data for each patient.

As Bezos, Warren Buffett, and Jaime Diamond know, the healthcare market is massive, offering a significant opportunity for emerging companies to reduce costs, improve care, and deliver better outcomes for patients. Right now, healthcare in the United States comprises 17% of annual GDP with an aging population providing a consistent tailwind.

The Healthcare Information and Management Systems Society (HIMSS) says there is “massive untapped potential” to change the healthcare sector for the better through blockchain technology. For one, Blockchain tech can secure HIPAA-compliant data sharing across networks. A number of use cases have cropped up as a result. In a comment on the opportunity tech reporter Mike Butcher said illustratively that a blockchain record could “follow you around so you could avoid yet another dose of radiation because your record said you’d already had 50 head X-rays.” Moreover a raft of applications emerged between smart contracts, data tokenization, and blockchain combinations with AI and machine learning.

Blockchain smart contracts will automate transactions and reduce inefficiency,” says entrepreneur Adryenne Ashley. “Using smart contracts to track disease, cause and effect, treatment and results will be critical to learning and understanding how each patient responds.” Having that data automatically written to the blockchain eliminates delay in data analysis and creates a bridge between practitioners and researchers, leading to cures.

Blockchain companies with tokens will introduce new commerce and incentive systems. And combining blockchain technology with advancements in AI and machine learning will provide new insights and further improve care. In 2018, several new blockchain startups are launching across various areas in healthcare, representing some of the best applications of the technology to accomplish those goals.

Big Medicine taps into data

The fragmented, inaccessible nature of current electronic medical record systems alone millions. John Halamka, the chief information officer at Beth Israel Deaconess Medical Center in Boston, developed a secure-data exchange, MedRed, and advises another blockchain company, Simply Vital Health, as it builds a platform to streamline healthcare data management and reduce the costs of bundled payments. In the Harvard Business Review, Halamka wrote that blockchain protocol can “standardize secure data exchange in a less burdensome way than previous approaches.”

The rest of the healthcare industry is following Halamka’s lead. 16% of healthcare executives surveyed by IBM have “solid plans” to implement a commercial blockchain solution this year, with 56% planning to do so by 2020.

Supply chain

IBM, one of the corporate behemoths investing in blockchain technology, sees supply chain management as one of the key areas where blockchain can make an immediate improvement. The technology will enable “more secure and transparent monitoring of transactions” which will reduce time, cost, and human error.

Gem, one of the early companies to watch in this space, has a supply chain management software platform that “boosts the ‘collective intelligence,’ or Data IQ, from previously siloed data” allowing organizations to increase efficiency, accuracy, and speed of supply chain transactions. ShipChain, too, backed by DHL’s former CEO, launched its platform to tidy up the fractured transportation and shipping industry including medical freight and hazardous materials.

Tackling fraud

A favorite target among the federal enforcement crowd–myself included–Blockchain technology could also tackle the massive amount of fraud in the healthcare market. A 2012 study by the Centres for Medicare and Medicaid Services and the RAND Corporation estimated that fraud accounted for $98 billion of total Medicare and Medicaid spending and up to $272 billion across the entire U.S. healthcare system. Through secure, immutable records, blockchain ledgers could be one of the best tools to cut down of fraud, from false reimbursements to theft of patient records to gain access to prescription drugs.

What’s in store for 2018

The story of 2017 was the meteoric rise of cryptocurrencies with plenty of bearishness coming from marquee investors. That said even after a big correction, the biggest cryptocurrencies are up thousands of percentage points over the last twelve months. The bigger story is unfolding away from volatility, as blockchain companies look to solve big problems in healthcare. Rest assured that from an investment perspective the likes of Buffett and Bezos will take notice.

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Jordan French is a top journalist covering the intersection of technology and culture. On the Editorial Staff at TheStreet, French covers all things crypto including regulation, markets, ICOs, STOs, smart contracts, blockchain, funding, and the latest moves by top names in the asset class. A biomedical engineer and intellectual property attorney, French has cofounded five companies to earn Inc. 500 and Fast 50 rankings. You can read his work at TechCrunch, tech.co, Influencive, Today Show, Huffington Post, Entrepreneur and The Next Web, among others.

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Freelance Terrorist Carried Out Hundreds of Bomb Threats in Exchange For Bitcoin 34 258

An American-Israeli teen is sentenced to a decade in prison after a Tel Aviv court convicted him for a series of fake bomb threats he carried out in exchange for Bitcoin.

The 19 year old began making threats professionally at the age of 16. He is convicted only for crimes committed while over the age of 18. These include making false threats and reports, extortion, money laundering, and conspiracy to commit a crime.

While the Israeli courts withheld the defendant’s identity because some of his alleged crimes occurred while he was a minor, the Guardian identified him as Michael Kadar at the time of his arrest. He was originally indicted for over 2,000 bomb threats, carried out between 2015 and 2017.

Kadar Targeted Children and Jewish Community Centers

The targets of Kadar’s threats included Jewish community centers, the Israeli Embassy in Washington DC, elementary schools, shopping centers, hospitals, law enforcement agencies, airports and airlines.

A threat to an El-Al flight resulted in the deployment of fighter jets for an escorted emergency landing; another threat to a Canadian airport left six people injured during emergency disembarkment; a Virgin flight dumped eight tons of fuel before landing because of a threat; and another threat went to a plane carrying the Boston Celtics.

Kadar also targeted Republican Delaware state senator Ernesto Lopez, who he threatened with blackmail and the murder of his daughter. After Lopez ignored the demands, Kadar ordered drugs to have sent to Lopez’s residence.

Dealing Terror From Mom and Dad’s Apartment

His reign of terror operated from his parent’s fifth floor apartment near the beach in a posh neighborhood in Ashkelon, about 30 miles south of Tel Aviv. But his threats landed in over a dozen countries, including Ireland, New Zealand, Germany, Denmark, Great Britain, Belgium, Australia, Norway, Argentina, Israel, the United States, and Canada.

“One can easily imagine the terror, the fear and the horror that gripped the airplane passengers who were forced to make an emergency landing, some of whom were injured while evacuating the plane,” read the verdict by judge Zvi Gurfinkel, “and the terrified panic caused when there was a need to evacuate pupils from schools because of fake bomb threats.”

The Judge also divulged Kadar’s fees for his services: $40 for a threatening phone call to a private residence, $80 for a bomb threat to a school, and $500 for an airplane scare. Kadar operated on the dark net and disguised his IP address, using a powerful self-installed antenna to tap into remote networks, and software to mask his voice. According to an indictment filed against him in Florida, he spent some of his calls going into graphic detail threatening the deaths of children in American Jewish centers.

A Small Fortune in Bitcoins

At the time of his arrest, Kadar had amassed around 184 Bitcoins for such services—about half a million dollars at the time, and closer to $680,000 today. He also dealt in bomb making manuals, drugs, and child pornography.

Kadar is the son of an American mother, and his father is an Israeli engineer, and has dual citizenship. The US Department of Justice has also indicted Kadar for 32 crimes, including hate crimes, cyberstalking, giving false information to the police, and making threatening phone calls to around 200 institutions. A separate indictment also accuses Kadar of threatening the children of a former CIA and Pentagon official with kidnapping and murder, and links him to over 245 threatening calls.

When Kadar was arrested, he tried to escape by grabbing a pistol from a police officer, but was wrestled to the ground. Thursday’s conviction follows a cooperative investigation by the FBI and Israeli authorities, who have not been able to recover Kadar’s Bitcoins.

Teen’s Mother Calls Conviction ‘Cruel’

Kadar’s mother spoke outside the courtroom after her son’s sentencing, saying “This is the most cruel, cruel thing in the world. I’m very sorry, but I am ashamed that the country acts this way.” She insisted that her son needed treatment, not prison.

In an earlier interview she told Israeli TV her sun was suffering from a brain tumor, which made school difficult for him. Because of this and his autism, Kadar was homeschooled.

Defense lawyer Shira Nir said these conditions made Kadar unfit to stand trial, as he could not distinguish right from wrong. A medical panel confirmed the defendant’s autistic condition, but concluded he was capable of understanding the consequences of his actions. Judge Gurfinkel said Kadar’s conditions were taken into account, lessening the sentence from 17 years in prison to 10.

Bitcoin Uses As Much Energy As Austria, Could Add 2°C to Earth’s Atmosphere 2,157 7128

Bitcoin mining, it turns out, damages the earth more than more traditional environmental assaults like actual mineral mining.

According to a paper published Monday in Nature Sustainability, the power-hungry Bitcoin mining process consumes more than triple the amount of energy needed to mine the equivalent amount of gold, more than quadruple what’s needed for copper, and more than double what it takes to mine platinum.

Other coins didn’t fare much better. By their measurements, Ethereum and Litecoin consume 7 megajoules of electricity to produce the equivalent of $1, the same energy expenditure as copper mining but more than that of platinum or gold. Monero eats up 14 megajoules to produce $1.

Naturally, these measurements refer to the notoriously variable dollar valuations of such tokens. “While the market prices of the coins are quite volatile,” write researchers Max J. Krause and Thabet Tolaymat, “the network hashrates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase.”

Bitcoin’s Growing Electricity Bill is Bigger Than Some Countries

We’ve long known that Bitcoin is unsustainable. In a 2015 article for Motherboard, Christopher Malmo pointed out that a single Bitcoin transaction used 5,033 times as much energy as a Visa swipe, and could power 1.5 American homes for a day.

The electricity used to crunch Bitcoin code—and its environmental cost—has been growing with its increasing popularity. Digiconomist’s Bitcoin Energy Consumption Index shows Bitcoin currently consuming 73.12 terawatt hours (or 263.232 billion megajoules) of electricity annually. To put that in context, it’s comparable to the amount of energy it takes to power Austria for a year.

That means there are 175ish countries on earth using less energy than Bitcoin (to say nothing of crypto on the whole), while 66 countries consume less energy per capita than one Bitcoin transaction (it takes 94 thousand kilowatt hours of electricity to mine a single Bitcoin).

Iceland, a major hub of Bitcoin mining farms, spends nearly as much energy on Bitcoin as it does powering its residential homes. In this case, the damage is mitigated because most of Iceland’s power comes from renewable energy.

Canada’s Bitcoin emissions are also on the lower end due to renewable energy sources. They’re using this to court mining companies from China, where mining emissions are about four times that of Canada’s. Montreal International attracts foreign investment by calling Quebec the land of “green bitcoin”. This has caught the eye of some Chinese mining companies looking to go overseas as the Chinese government has discouraged expansion and shut down some mining operations altogether.

Depending on Bitcoin’s growth, some have projected that it could use as much energy as the entire world by 2020.

Digital Currency Has a Real Carbon Footprint

Krause’s and Tolaymat’s research reminds us of the sobering reality that all this invisible wealth has real world costs.

For the 30 months they measured between January 2016 and June 2018, they estimate their four featured tokens collectively belched out at least 3 million tons of CO2 emissions, possibly as much as 15 million tons.

These findings follow another study, published last month, which determined Bitcoin alone could add two degrees Celcius to global warming within the next three decades. That’s enough to raise ocean acidity by 29 percent.

Solving Bitcoin’s Energy Consumption Crisis

So what is the solution? If the world were to switch to 100 percent renewable energy overnight, the problem would be moot. But we can’t hold our breath for that. There could be ways of incentivizing clean energy so greener mines reap more coins, or of implementing clean energy in other ways.

It’s also possible to adopt less computationally intensive mining algorithms so the mining computers don’t guzzle as much juice. This would disappoint a lot of old school Bitcoiners who have invested in hardware, but their feelings don’t really outweigh that 2 degrees celcius that everyone will have to live with (or die by).

Whatever the best solution turns out to be, something needs to change soon. Bitcoin is growing up, and it’s time for it to mature into something more sustainable.

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