opportunities. This type of analysis is possible only with access to vast amounts of patient medical history. The main problem for researchers is that a patient’s electronic health record (EHR) is likely stored as fragments across multiple practices and databases. Although ongoing efforts to combine these records exist, privacy is a growing concern (we’re back to the trust problem) and progress is slow.
EHR management is a good fit for a blockchain app. Storing a patient’s EHR in an Ethereum blockchain can remove the silos of fragmented data without having to trust each entity that provides or modified parts of the EHR. Storing the EHR in this way also helps clarify the billing and payment for medical services. With comprehensive medical procedure history all in one place, medical service providers and insurance companies can see the same view of a patient’s treatment. Full history makes it easier to figure out what should be billed.
Another advantage that blockchain apps can provide in the healthcare domain is in managing pharmaceuticals. Blockchain EHRs provide the information for medical practitioners to see a full history and current snapshot of a patient’s prescription medications. It also allows researchers, auditors, and even pharmaceutical manufacturers to examine the effect and possible real side effects of their products. Having EHRs available, yet protected, can provide valuable information to increase the quality of healthcare services.
Conducting financial transactions
Financial services are interactions that involve some exchange of currency. The currency can be legal tender, also called fiat currency, or it can be cryptocurrency, such as Bitcoin or Ethereum’s default currency, ether (ETH). Blockchain apps do a great job of handling pure currency exchanges, or exchanging some currency for a product or service. Financial services may center on handling payments, but there are more nuances to the many transactions that involve money.
Another rich field for blockchain in the financial services domain is real estate transactions. As with banking transactions, Ethereum makes it possible to conduct transactions without a broker. Buyers and sellers can exchange currency for legal title directly. Smart contracts can validate all aspects of the transaction as it occurs. The steps that normally require an attorney or a loan processor can happen automatically. A buyer can transfer funds to purchase a property after legal requirements are met, such as validating the title’s availability, and filing required government documents. The seller receives payment for the property at the same time the title transfers to the buyer.
Chapter 3
Identifying Blockchain Data with Value
IN THIS CHAPTER
Many descriptions of blockchain technology relate it to well-known data storage techniques. One of the more popular descriptions states that a blockchain is essentially a distributed ledger of transactions. This description is somewhat true but overly simplified. A blockchain does store transactions like a ledger and is distributed, but it contains far more interesting information. If a blockchain only stored transactions it wouldn’t be very interesting because it would be little more than a distributed spreadsheet.
A blockchain is far more than just a distributed spreadsheet — it contains an indelible record of the data’s current state (current values) and a complete historical record of how the data came to the current state. Traditional data repositories generally store only the final state of data. As you make changes, those changes overwrite any previous values. More sophisticated data repositories maintain audit records, which are generally external notes that record changes to data values.
Additionally, blockchain apps can create logging entries that document events that occur as smart contracts execute. The ability to record activities can provide a view of how data changes, not just the fact that it did change. And finally, each block in a blockchain stores information about the functions — and input parameters — in a smart contract that an application calls.
In this chapter, you learn about the different types of data available to you in a blockchain environment and how you can identify data that might be useful for analysis.
Exploring Blockchain Data
In this section, you discover what data gets stored in blocks on a blockchain. Although each blockchain implementation differs in its low-level details, the concepts are generally consistent across blockchain types.
Because the purpose of this book is to introduce you to the most important concepts of blockchain analytics, I won’t cover the specific technical details of every blockchain. Instead, you learn about the specific features of the most popular public blockchain implementation, Ethereum. If you don't use Ethereum, don’t worry — the concepts you learn here will apply easily to any other blockchain implementation.
Understanding what's stored in blockchain blocks
As mentioned in Chapter 2, blockchain is just a specially constructed group of blocks that are linked, or chained, to one another. Each block header contains the hash of the previous block, forming the link that creates the chain. From many descriptions, it sounds like the blocks in a blockchain are pretty much the same as the data in a database or other data repository. However, that view isn’t accurate. Blockchain stores a lot more than just values of data items, which is why blockchain analytics is so interesting. A lot of information is in a blockchain, but you need to know how to get to it.
Each block consists of some header information and a collection of transactions. In most blockchain implementations, miners select the transactions they want to include in blocks. In Ethereum, if a miner is the first to mine that block, he or she selects transactions based on the potential payoff. Other blockchain implementations use different methods to create blocks. Hyperledger Fabric, for example, uses order nodes instead of miners. Because Hyperledger Fabric uses a different consensus mechanism, it doesn’t rely on competing miners to create valid blocks. Hyperledger Fabric is built on a modular design that makes replacing components, including the consensus mechanism, easy. Hyperledger Fabric
