Blockchain Basics: Overview of Distributed Ledger Technology Application in Health Care and Legal Considerations 

November, 2017 -

In August 2016, the Office of the National Coordinator for Health Information Technology (ONC) and the National Institute of Standards and Technology (NIST) co-sponsored the Use of Blockchain in Health IT and Health-related Research Ideation Challenge, soliciting whitepapers on how blockchain technology can be used in health care.1 They received over 70 submissions from academia, consultants, enterprises, and individuals, which makes apparent the enormous potential of this technology in health care. While adoption in health care is still early, attorneys must soon begin advising on blockchain. This article is designed to introduce health care attorneys to blockchain and decentralized ledger technology, explaining key concepts, identifying applications in health care, and providing legal considerations in the areas of business law and governance.

 

Distributed Ledger Technology Overview and Process. Blockchain is a colloquial term for distributed ledger technology, where all transactions are stored on a “ledger” in a decentralized manner. This means that no one entity has exclusive ownership or control of the record of information or a transaction. Blockchain technology is so-named because as a record or collection of records of transactions are captured in a block, each block references a preceding block, and as the batches of transactions are recorded, it forms a chain. Hence, the name, blockchain technology. Once added to the ledger as part of the chain, the block, and the associated transactions, become a permanent feature on the ledger

 

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