How Will Blockchain Tech Impact Healthcare Investors? 0 149

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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Baking Bread in a Refugee Camp Just Got Easier 0 53

When Zulfiqar Deo and Ondrej Dusilek first visited Jordan in 2016 to conduct interviews in the Zaatari UN refugee camp, they found a paradox. Nearly a hundred thousand refugees, displaced by the war in Syria, were living in a ‘camp’ that’s looking more and more like a permanent settlement every year. Many of these refugees were educated professionals or business people in Syria. But in Zaatari they’re not allowed to work. Though the Jordanian government provides $870 million in annual support, they have restrictions on refugee work permits in order to protect their own economy.

Nevertheless, businesses naturally pop up in a community of this size. Deo, who was detained at the airport, communicated with Dusilek and their support team in the camp, including advisors from PriceWaterhouse Cooper and SIX Group, a coach and mentor from the F10 fintech incubator, and a handful of volunteers. They estimated that three thousand microbusinesses helped circulate $11 million per month in the Zaatari community.

Invisible Businesses

Without access to capital, though, the refugee’s businesses were struggling. A wedding dress rental company couldn’t grow to meet the demands of the community. A baker wanted to scale up his shop but couldn’t afford the machine that would make it possible. “Refugee entrepreneurs are a significant global population not being served,” Deo told The Block Talk earlier this week. “They cannot access a business bank account. They have no formal record that their business even exists,” says Deo. “Even as successful entrepreneurs, they’re financially excluded.”

This ‘significant global population’ is growing fast. Over 68 million people worldwide have been displaced by violence, and that number is growing by 300 thousand people each year. If this unprecedented upsurge continues, we’re looking at a near future in which one out of every 100 people on earth is a refugee.

Part of the refugee experience is disconnection. But we have the technology to connect people. Can we introduce it to regions like Zaatari to engage refugees more directly with the global community? Can we use the blockchain to finance refugee entrepreneurs and stimulate micro-economies in camps and settlements?

Boosting the World’s Underserved Through Technology

That’s the thinking behind BizGees, the company Deo and Dusilek launched to bring microfinancing to refugees. They want to support refugee-owned small businesses with interest-free loans, inventory, six months of ongoing support, and access to amenities from partner companies, like WSV’s ‘business in a box’ toolkit. By Deo’s calculation, a support package like this lowers the risk of business failure from 90 percent (which is close to normal for first time entrepreneurs, although these numbers are tricky to nail down) to a mere 10 percent.

“Refugees naturally nurture the same skills entrepreneurs have just out of necessity,” Deo observes. He notes that the creativity, initiative and ownership necessary for their survival are also traits commonly associated with entrepreneurs. “So why not support them?”

With the support packages Deo designed, 3-5 refugees who typically live on $5 per day could launch a startup or expand an existing microbusiness. Within a year, the microbusiness could become a small business employing 10 more people, who circulate their pay in the local markets and stimulate the whole community. When the loan is repaid after a year and a half, it’s reinvested, providing loans to another business.

Eventually, because of the transparent, chronological way the blockchain stores data, refugee entrepreneurs will build a credit history acceptable to most local banks, better positioning them for traditional finance like they may have had access to back home.

Finding The Right Environment

But there was a problem. Although their model is tested, BizGees couldn’t launch it in Zaatari because of the government’s work restrictions. “We had to move away from Jordan,” Deo said a bit ruefully, “and look for a different environment that allows refugees to work.” That led his team to Uganda, where tens of thousands of refugees have been displaced over the past decade by violence from a Christian terrorist group called the The Lord’s Resistance Army (LRA), operating in northern Uganda, South Sudan, the Central African Republic, and the Democratic Republic of the Congo.

According to Deo, some of the people in Uganda’s camps “didn’t take kindly to the service we were offering at first, asking ‘why is that person getting support and not us?’”

They had to work to re-educate the community on how the model brings long-term returns to everyone, by the money getting re-loaned and by financially stimulating local marketplaces. Now, Deo says, they’ve identified the refugees they can fund and the first microbusinesses should be up and running by the end of this month.

Working in Stressed Communities

Working in refugee camps isn’t easy. “It’s a very complex environment,” Deo says. “In addition to the financial issues they’re facing, there are social issues, psychological issues, most of them have post traumatic stress.” He notes that displacement alone causes mental health concerns, let alone the trauma of losing or being separated from loved ones. “You have to take into account the impact those traumas have as far as how they engage with the public and how they take control of their own lives.”

Consequently, the goal of BizGees isn’t just financial or technological. Their website asserts the importance of entrepreneurship as a way for people to take back ownership of their lives by building confidence and self-worth. Instead of just trying to make a buck, Deo, who has a background in international politics and NGOs as well as business, wants to meet a need.

How Crowdfunding Meets These Needs

BizGees is able to offer loans without interest or collateral because of the way they crowdfund them. Ninety percent of everything they raise goes to the refugees, while the other 10 percent supports BizGees’ operations, which are partially volunteer run.

The public participates through crowdfunding campaigns including art auctions, presales of products from post conflict zones, and cryptomining.

“The reason we’re using crowdfunding is to engage the global community more directly with the refugee experience,” says Deo. “The idea is to personalize it and help individuals to make a real social impact.”

Through blockchain’s ability to connect people directly without a third party, Deo sees a future where a group of individual financiers could get together to sponsor one refugee microbusiness and communicate with them directly. “They’re no longer reliant on third parties to know what’s going on in rural Uganda,” he says. “They have direct access.”

Getting People Socially Engaged

Direct communication is key because it creates the social engagement that is one of Deo’s overarching goals. Most people have no idea what a refugee camp is like, who’s in them, or what they’re facing on a day to day basis, he notes, citing that the average refugee stays on what’s supposed to be a temporary refugee status for 17 years (the U.S. State Department says 26 years on average for protracted refugees). “The support base for refugees is focused on disaster relief, for the first 6 months or so,” Deo says.

“There’s a big gap between the actual experience of refugee populations across the world and how we perceive their experiences,” he says. “We’re looking to use social engagement as a way to narrow that gap as much as possible.”

That’s also why he’s enlisting volunteers to participate in the work, both on the ground in the refugee camps and at BizGee’s headquarters in London. Deo mentioned an American volunteer who came to help with promotional material, website stuff, and office operations. “Her understanding of the refugee experience on day one was very different than it was on week seven,” he says. That in itself he considers a small success.

Goal: A Thousand Refugee Businesses Thriving

As for larger successes and longer term goals, Deo hopes to support 1,000 refugee businesses in the next three years, serving populations indefinitely in Latin America and Asia as well as Africa.

Blockchain technology can work for humanity. Models like Deo’s, which supports at least seven of the UN Sustainable Development Goals, identify something the blockchain can do that world badly needs. This is what we need to see more of from blockchain developers.

The refugee crisis is escalating, but hope can grow within the camps as long as people can live like people. As long as bakers can keep baking, and families can rent their wedding dresses.

The Patent That Wants to Fix Crypto’s Volatility 0 52

The number of blockchain-related jobs posted on LinkedIn more than tripled last year, according to CryptoCoin News. And blockchain patent filings more than doubled. Companies and individuals alike are innovating, exploring the blockchain’s well of possibilities. Major fintech companies, meanwhile, are gobbling up blockchain patents like they’re going out of style. But cryptocurrencies themselves still have yet to see a mainstream embrace.

The main problem with crypto right now is the same problem people have been talking about since Satoshi Nakamoto said Let there be Bitcoin: volatility. And ever since Bitcoin’s dramatic rise and fall around the turn of last year, cryptos have become virtually synonymous with wild fluctuations.

This reputation has given Bitcoin specifically, and cryptos in general, a mixed reputation. By now we’ve all heard the songs of praises from evangelists and the sour sneers of financial titans alike. Crypto is exciting because it’s unstable; crypto is unrealistic for the same reason.

The Primary Criticism of Cryptos

According to Eric Lamison-White, founder of the investor’s crypto intel platform Pareto Network, volatility is the “primary criticism of cryptocurrencies.”

But he doesn’t think it has to be that way. What if you could stabilize your crypto accounts? Lamison-White says the risks of owning cryptos are “easily mitigated by a variety of hedging techniques that are available in all other asset classes.”

He proposes treating crypto accounts like more traditional assets. “Hedging with options, futures and swaps allow for stable value or any risk profile that an owner or even a speculator would desire.”

That’s the idea behind his patent, filed in 2014, for a structure of interconnected accounts. The system “removes volatility from owning cryptocurrencies,” Lamison-White says, transferring its fluctuations into a hedge account. Here’s how it works.

Lamison-White’s System

The system requires at least two accounts: one for your cryptos and one you’ve funded with fiat currency, let’s say $400 US dollars. These accounts connect to a network of decentralized nodes, which measure the amount of cryptocurrency you have from moment to moment. If there’s any drop in the crypto’s value, the system automatically deducts from your $400 in the other account and transfers it to compensate. When the value of your crypto goes back up, the system re-deposits back into your fiat account.

This holds the value of your crypto assets steady, while transferring its volatility to your hedge account.

What makes it unique compared to other trading systems is that crypto assets can be divided into infinitely small portions. “A futures contract on oil costs $80,000 for example, although a trader only needs to put up maybe $4,000 as a minimum,” Lamison-White says. “This is because the contract represents the price of 1,000 barrels of oil or something crazy.” He notes that even hedging stocks are usually offered in units of 100 or 1,000.

Not so with crypto, where the “infinite divisibility of the asset itself” makes hedging much more finely tuned. Because cryptos are pure math instead of physical assets, “arbitrary sized contracts can be traded just as easily with larger contracts.” One future could represent one bitcoin, for example, but you can also trade in .01 increments. With fractional futures and options, people with very small amounts of cryptocurrency can be shielded from price fluctuations in a way that had only been available to the wealthiest and investment banks for most of the last millennia.

The System at Scale

The system gets even more interesting when you make it scalable. According to Lamison-White, you could have multiple people funding and connecting to the same hedge account, each using it to stabilize their own crypto accounts. Alternatively, you could connect multiple hedge accounts to a single crypto account. Suddenly the possibilities extrapolate, like tinkertoys, developing into an interconnected network of crypto- and fiat-funded accounts, with a variety of owners controlling their assets at a variety of access points, everything regulated with the intelligence and transparency of a decentralized ledger.

Patents Like This are Attracting Corporate Giants

There’s a feeding frenzy going on for patents like these. Visa filed a patent for a B2B blockchain payment system, Mastercard developed its own blockchain patent for anonymous transactions, and Wal-Mart has come out with a few as well. But it’s Bank of America that’s gobbling up the most. With claims to at least 43 live blockchain patents, the financial giant holds more than any other person or company.

Whether they’re just trying to get a leg up on the future of tech, or positioning themselves to harangue the little guy with barrages of lawsuits for intellectual property rights, we’ll just have to wait and see.

Whether or not Lamison-White anticipated the blockchain patent arms race, he was ahead of the curve, filing for his patent in 2014. It could be the thing to finally put skeptical minds to rest about the viability of crypto assets. And with big financial institutions like Bank of America placing a premium on innovative blockchain patents, he may have spun ether into gold.

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