The level of innovation over the past century has been unprecedented. As each new discovery or invention gives birth to hundreds of spin-off products or services, the competitive landscape becomes more crowded and cut-throat. What represents opportunity for the entrepreneur is a threat for the incumbent and both need to adapt to remain in the game.
Competition is built into the fabric of society, but then again so is a sense of community. It is through the notion of trust that they are reconciled. According to Dunbar, 150 is the maximum number of stable relationships any single individual can maintain before rules and norms need to be enforced to broker the trust required. Building a global business clearly mandates the use of these rules.
Finding ways to trust, particularly at a distance, is tricky. This is perhaps why the world is so excited about blockchains. Distributed consensus through clever cryptography and economic incentives, orchestrated by an impartial protocol is a tantalising prospect. As much as it is promising, it is conceivably frightening too. Trust in the code is easier said than done. After all, computers are as fallible as the humans that program them. The DAO showed us just how vulnerable immutable code can be, and the various blockchain forks illustrate the fragility of consensus. So how can we build a future where power is distributed, trust assumed, that nurtures individual aspirations and also serves society at large?
A fascinating infographic was making its way around LinkedIn not too long ago. Essentially, it was a summary of the blockchain world as it currently exists. The punch line (perhaps not surprisingly) is that, of the many decentralised solutions being developed, almost all appear to be either funded or owned by the big financial players from the non-blockchain world. Presumably some detective work was required to make these assertions and I have not personally verified the accuracy of the claims, but I can believe it to be true. It makes sense for the occupants in power to protect their dominion. Ethics and ideological differences aside, it would be short-sighted to think that anything else would occur. But it does present a conflict which is yet to be resolved.
Many ardent blockchain fans adopt the anarchist view that banks, multinationals and governments need to relinquish their controls. Purportedly the financial crisis and the distrust of bankers prompted Satoshi Nakamoto (the infamous creator(s) of the Bitcoin network) to launch the Genesis block with The Times headline embedded in the first transaction: ‘Chancellor on brink of second bailout for banks’.
The frenzy that followed brought insane valuations and several thousand new coins into the market with all the crypto-rebels chanting the death of monopolies and centralised authorities.
It would be naïve to think that anyone would take that lying down – especially the grey-haired suits who had built the empires we see still today.
Roll forward a decade and the likes of BBVA, Barclays, Goldman Sacks, JP Morgan Chase, Credit Suisse and many, many others are trialling blockchain and investing in cryptocurrencies. And if the infographic is to be believed, they are also largely in control of the projects whose aims are to disrupt the status quo that they have designed. Trust in blockchain indeed.
However, without throwing the baby out with the bath water, it is worth considering that blockchain and its relatives may actually be of value in building trust, removing business frictions and help level the playing field. Consider the 2 billion unbanked, the unidentified refugees, the charity funds that get misappropriated and the counterfeit pharmaceuticals which damage the health of humans and companies. Somewhere in the centre – between the oligarchy and the dreamy blockchain democracy, is a happy medium.
Humans have been cycling between centralised and decentralised structures for centuries. Just 20 years ago, the internet promised every aspiring shop-keeper to open a website and take back the market from the big stores that dominated the retail arena. It was a great idea – and Jeff Bezos took full advantage of the new technology. Today, Amazon is no longer an online bookstore but an e-tailing behemoth with, what some might consider, way too much influence and power.
FAGA (Facebook, Amazon, Google and Apple) companies are now branching out into healthcare. While many sing the praises of a less expensive, more efficient pharmaceutical delivery service or the ability to share every heartbeat with their family doctor via a watch, others worry about the monopoly, the privacy risk and perhaps the damage done to aspiring entrepreneurs or SMEs. There is little doubt that FAGA-enabled healthcare will be smooth, cheaper and probably save lives. The question is at what cost? Centralising data has its advantages, but it creates an attractive honeypot for hackers and a leverage tool for the oligopolies to command the market as they wish. Do the advantages outweigh the perils? How much do we trust the giants? Recent data breach scandals (and the fact that the business model of some of these giants relies on monetising personal information) only strengthen the need for change.
In steps blockchain and its magical ‘code-is-law’ consensus driven protocol to save the day.
Decentralised, democratised healthcare sounds wonderful: patient-owned and controlled records, granular permissions managed by private keys and a fully transparent audit trail of who did what. Finally, we have a way to get the conflicting stakeholders to work together for the benefit of all. It sounds so attractive in fact, that in 2018 a BIS research report quoted the healthcare blockchain market to be worth $ 176.8 million and predicted growth to reach a value of $ 5.61 billion by the end of 2025. The overall digital healthcare market has been predicted to top $ 379 billion by 2024 and includes Telehealth, the use of AI and other technologies. It is not a big shock, therefore, that FAGA et al. are interested or that droves of aspiring hopefuls present their wares at conferences hoping to get industry leaders to bite.
Who will win? Can blockchain bind organisations together to uproot the almighty incumbents?
It depends on the models of collaboration being offered.
The path to nirvana is inevitably tortuous and long. Technological barriers ignored, the world is yet to settle on whether socialism, capitalism, democracy or benign dictatorships work best for both the individual and the group. So, it is unfair to expect wholesale adoption of a sharing economy because the blockchain code is open-source and distributed.
Some contend that the middle ground lies in the permissioned, semi-trusted private blockchain alternatives such as Hyperledger or Ripple. Others evangelise the censorship-resistant merits of Bitcoin and Ethereum.
While each has its own advantages when we consider scalability, speed, security and privacy, healthcare has its own particular constraints when making these choices.
Fundamentally, though, none of these are mature enough to completely convince all organisations to collaborate without reservation. So how can we progress?
The notion that it all comes out in the crypto-economic wash has not been borne out so far by the health tokens in play. So far, the successes can be measured in single digits and even they are in embryonic stages of development. Perhaps it is simply too early to tell, but the value of tokens being able to create trust is simply not evident.
Extrapolating the value proposition from Bitcoin (borderless, uncensored, peer-to-peer coin ownership transfer) to building widespread business trust is naively optimistic; the number of variables is far too great. And because any form of collaboration usually includes the possibility that business identities and market shares may be jeopardised, Joint Ventures are generally not done on a whim.
Instead, JVs are built on trust which develops over time and with evidence. Parties generally only enter into these agreements after careful due diligence and the presence of the following success factors:
- Each party must have something of value to contribute
- There needs to be interdependence and complementarity
- Trust in one another and a willingness to share are essential
- Both parties require formalised relationships to avoid future disputes
- Effective communication systems must be in place.
Healthcare blockchain ventures may therefore need to bear this in mind when constructing their solutions. Akin to building a playground and then hoping rival gangs will use the slides and swings together, platform entrepreneurs might prudently consider gaining buy-in from stakeholders beforehand, and then building relationships on-chain one variable at a time.
Co-ownership of a blockchain platform that is used, generates value and encourages data sharing is surely better than full ownership of a solution that nobody trusts.
There are many challenges ahead. The perfect business models for blockchain are far from being agreed. One thing if for certain, though – if you want to compete with the incumbents, collaboration is essential. It is, ultimately, what blockchains are all about.