Blockchain Part II
A few articles ago, we wrote about blockchain. In this Blockchain Part II article, we continue our series to understand what types of use cases are most well suited to blockchain. More specifically, we discuss use cases for private blockchains.
Public versus Private
Before we look at use cases, it is important to understand the difference between public and private blockchains. A public blockchain is one in which anyone can create a node that is part of the peer to peer network. All nodes are fully functioning in that they can read all transaction data as well as, following the protocol rules, add new transactions to the blockchain. A private blockchain is one in which there is a single owner or operator. This owner determines who can participate in the blockchain and has the authority to edit blockchain transactions created by others. Participants must authenticate in order to interact with a private blockchain.
Using a Private Blockchain
For many use cases, a private blockchain is the best way to go. Any business process can be migrated to a private blockchain and benefit from the fact that all transactions are stored in an immutable manner.
For example, expense tracking for a business could be a good use case for a private blockchain. All employees can be authorized to read and create transactions for their expenses. Members of the finance team can be authorized to read, create and edit existing transactions. The company can use the expense blockchain to handle reimbursements.
Another example could be as a replacement for your CRM. For the CRM use case, the blockchain could allow all members of your sales and relationship management teams to read and create transactions and all members of your marketing team to read transactions. All interactions with prospects and customers could be recorded on the blockchain.
An example of a “permissioned” blockchain could be used for technical support. All of your technical support staff could be authorized to read and create transactions for all customers. Your customers could be authorized to read and create transactions related specifically to them. In this case, the blockchain allows for access only to your company and your customers.
An example use case in healthcare could be a private blockchain that is shared across a consortium of hospital systems. Each hospital system could be authorized to read and create transactions for hospital admissions – but they would only be authorized to read their own transactions. The operator of the private blockchain could monitor the blockchain to detect hospital readmissions in near real time and could communicate this information to the hospital which discharged the patient, so would be subject to readmission penalties.
An example use case in pharma could be for drug consumption tracking. When pharma agrees on pricing for a drug with a payer, if the pricing includes discounts or rebates based on volume, drug consumption tracking is essential. A payer could use a private blockchain to track consumption across all the drugs for which they reimburse. Specific payer users could be authorized to read and create transactions across all drugs. Each pharma company could be authorized to read transactions related to their drugs. A private blockchain can provide an immutable, auditable, secure database shared by a payer and all pharma companies.
The most common way to build private blockchains is by leveraging a blockchain framework. Two of the most popular frameworks are Hyperledger Fabric and R3 Corda. Both of these frameworks focus on business to business use cases. R3 Corda is primarily focused on financial services workflows while Hyperledger has a broader focus.