by Peter B. Nichol

State channels linked to blockchains will solve the scalability problem for healthcare

Sep 30, 2016
Emerging TechnologyEnterprise ApplicationsHealthcare Industry

State channels, ring signatures or confidential signatures and zero-knowledge proofs will quickly be common watercooler talk as their impact on healthcare is made more apparent.

Innovative CIOs will be among the first to link state channels to better health outcomes — running blockchain technologies within their operations. Blockchain technology scalability challenges are mentioned in virtually every article, video and podcast on the topic created within the past twelve months. The reality is the problem of scalability of blockchain technologies has already been technically solved.

In my recent article “Interactive and Zero-Knowledge Proofs for Better Patient Interactions With Blockchain Technology,” I discussed zero-knowledge proofs and the impact to healthcare. In today’s discussion, I’ll be covering state channels and ring signatures or confidential signatures and the potential for healthcare when leveraging blockchain technologies. As you read the article, start to think about the decentralized application (dapp) for mobile and the tremendous use cases for healthcare.

Quick definitions

Before we begin, it will be helpful to get some simple definitions out of the way, necessary to frame our discussion.

  1. Zero-knowledge proofs: a protocol between two parties in which one party, called the prover, tries to prove an absolute fact to the other party, called the verifier. This concept is used for identification and authentication.
  2. State-channels: Similar to a lightning network payment channel, the state or condition is updated between participants but is not published on the blockchain.
  3. Ring signatures or confidential signatures: a crypto method to preserve the privacy of the attributes of a person relying on a smart contract. (Additional explanations can be found here. Be advised it’s a bit technical.)

The sparkle of state channels

State channels go back to the days of wireless communication. Recently, state channels on Bitcoin were pure payment channels, for two parties to send fee-less micropayments. However, lately, they have been used to rethink interactions on the blockchain, and more specifically off the blockchain.

Why keep information (meaning their hashes) off the blockchain? Two primary reasons: cost and speed. In general, states are simply interactions between two parties that can apply to any smart contract.

State channels update business processes or transactions states. There often is confusion between state and status; I’ll attempt to clarify these terms. While they are similar terms, they are distinctly different and are not interchangeable. The state is a condition, e.g. no implicit ordering or position about one another. Status is a rank, e.g. within a process list.

State channels are comprised of three basic properties:

1. Locking: the on chain transaction is locked with a smart contract and participants must agree to smart contract terms using one of various authentication methods.

2. Interacting off-chain: transactions off-chain are linear just like on the chain. The latest interaction overlays previous transactions. However, only the last state or activity makes its way to the blockchain.

3. Publishing: once the operation is complete, the state channel closes and unlocks the smart contract using the most recent update as the primary transaction (this becomes important if internet connection is lost; at least one node must be online with the latest transaction copy).

This process works well with micropayments and also can apply to healthcare transactions.

Healthcare’s need for state channels

Blockchain technologies can solve one the biggest challenges in healthcare: trust.

Have you been to the doctor recently? Did you know if the doctor was looking at your most recent medical information or an old copy? Did you bother to ask, or verify the he or she was making medical decisions based on the best information — information you validated as the most accurate and up to date? This is where blockchain technologies come up.

They’re not going to solve problems related to poor data quality or clumsy data entry, but blockchain technologies, when applied to healthcare, can give us back the trust we have lost in the system of care. As health events are written to the blockchain, and the volume of events increases, scalability becomes a challenge. The lightning network inspired much of the discussion of state channels forming off-chain networks: a network of channels. For our purposes, the exact implementation is less important.

The principle presented in a paper titled “The BitCoin Lightning Network: Scalable Off-Chain Instant Payments” achieves Bitcoin scalability using an extensive network of micropayment channels. The paper states that, “If we presume a large network of channels on the Bitcoin blockchain, and all Bitcoin users are participating on this graph by having at least one channel open on the Bitcoin blockchain, it is possible to create a near-infinite amount of transactions inside this network.”

What if we apply this to a healthcare ecosystem, a network of payers and providers working in collaboration for patients. The healthcare ecosystem becomes a global network that could support near-infinite health events. Picture that for a minute: A global network for healthcare impacting virtually every life in the world. Every life. Now we narrow focus into practical solutions for state channels whether leveraging state channels, sidechains or the like. Let’s ideate on two potential applications for healthcare.

  1. Post-EHR data validation updates: many providers are frustrated with the frequent significant software updates required for secure and functional electronic health records (EHR) technology. How is the state of the medical data verified post-upgrade? It’s not. State channels offer a method to ensure cryptographic proof of data while not bogging down the blockchain.
  2. Patient admittance and discharge: many patients spend their entire episode of care at a single facility. Not over their lifetime, but per health event. Then why would we update the blockchain at every activity performed for that patient, during their stay? We could use a state channel to capture that episode of care, opening the smart contract on admission, update the state (and health events) within the state channel, off the blockchain. Once the patient is discharged, the state channel closes and the smart contract publishes what the patient has conditionally authorized to hit the blockchain (the hash of the collective health events). This process avoids the scalability problem and ensures iterations of the states are not posted in excess to the blockchain.

Adoption is a decision

Make your decision early; your customers will thank you.

The term cloud was first used to represent computing networks in Arpanet in 1977 — pre-internet, almost 40 years ago. It wasn’t until 2009 that the low cost of storage, high-capacity networks, cheap computing power, and the adoption of hardware virtualization, service-oriented architecture, and autonomic and utility computing led to growth in cloud computing. When did your company truly buy in to cloud computing? Do you wish you had adopted earlier?

The achieving of scale takes time. Make the decision today to start experimenting with blockchain technologies — blockchain’s potential to improve healthcare may surprise you.