Practical+Uses+of+Blockchain+Based+Databases

=**Introduction**=

toc The blockchain is a recently popularized way of storing information, specifically a growing list of records where all individual records are linked together and encrypted. A blockchain database consists of “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way” [1]. Blockchains are designed to be managed by a network that insures new blocks are validated by procedural rules and once added to the record a new ‘block’ cannot be retroactively altered without altering all other subsequent records in the system. A blockchain is considered “decentralized” because the data is managed by a network and there is no third party with absolute control of the system and it is considered to exhibit high Byzantine fault tolerance.

The first popular use of the blockchain was Bitcoin and currently, most widely used examples of the technology are cryptocurrencies. Blockchain based technology is considered to have a broad application even now in its infancy. In theory it could be a more effective alternative for storing a wide variety of information such as medical records, education records and even general event recording given that all these examples, and others unnamed, could be greatly improved by decentralization. Current uses of blockchain are much smaller in scale than these example and because the technology is as well as the growing public interest.

=**Improvements Over Centralized Alternatives**=

Bitcoin became the world’s first decentralized digital currency. Instead of a bank acting as single administrator, Bitcoin transactions are managed by an encrypted peer-to-peer network. The transactions are validated and recorded on a public distributed leger known as a blockchain. [2] The basis of blockchain technology is to “put trust in the network instead of in a central institution.” [6]

When researching the possibility of using blockchain technology to store Electronic Medical Records, PHD students at MIT concluded that “the lack of any single entity that everyone trusts to run a centralized system indicates that a decentralized one might be favorable, and the minimization of required trust relationships seems like a good fit” [3] Currently these medical records are fragmented heavily across the large number of institutions requiring them; for examples private practices, pharmacies, medical research groups and even companies collecting data from smart devices. [3] This fragmentation will only increase over time and more and more healthcare related companies will be responsible for a greater number of diverse health care records.



The proposition of storing electronic medical records on a blockchain would solve the issue of fragmentation by creating a single trusted decentralized network where all medical records could be stored. Solving the issue of fragmentation has been debated since the early 1990’s with the assertion that the healthcare industry would by solving it, but very little has been done to address the problem. [8]

Fragmentation and as well as other issues associated with centralized data storage are not exclusive to electronic medical records and blockchaining is potentially a viable alternative to a data storage in a variety of industries including but not limited to education, entertainment, media and government.

=**Security**=

Blockchains like Bitcoin can be built so that they are pseudonymous meaning that although transactions are public, they and the owners Bitcoin currency are not associated with an actual identity. Researchers have proven that they can show proof of Bitcoin assets, and solvency through zero knowledge proofs without having to provide concrete bitcoin addresses. [4]

This is important because allows Bitcoin exchanges release proofs of solvency so that their costumers know that their assets are properly ensured. This also makes if much more difficult to use Bitcoin fraudulently. A properly implemented blockchain has three key features relating to the integrity of the software system, “Data Integrity, Behavioral Integrity and Security.” [5] These three features are why the blockchain has an optimal structure for the storing of sensitive information.

=**Issues with Scalability**=

Because the technology is in such early stages it is difficult to determine how a blockchain will perform and what problems are needed to be solved when it is used to storage larger amounts of different data. Bitcoin, as the most used cryptocurrency and blockchain, already experiences a variety of scalability issues that must be considered when developing blockchain based databases for other applications.

The scalability issue is a product of the amount of bitcoin transitions the network can process being limited to approximately 7 transitions a second. In comparison, Visa is capable of handling 47,000 transactions a second. This will make it difficult for bitcoin to compete with standard forms of currency and could keep it from every being widely accepted. [7]



There have been various debates over how bitcoins scalability issue should be handled. Most involve some form of increasing the block size of bitcoin from 1 megabyte to some higher value which would result in a higher quantity of transactions per second. On August 1st, 2017 bitcoin “hard forked” to Bitcoin Cash where all Bitcoin holder’s wallets were converted to be equal part Bitcoin and Bitcoin Cash. Bitcoin Cash has an increased block size of 8 megabytes to help combat the scalability issues.

=**Conclusion**=

The blockchain is a viable technology that can and should be used for a variety of applications but its limitations in regard to modern blockchains, specifically cryptocurrencies, must be properly addressed before development.

The future of cryptocurrencies is uncertain and dependent on a number of factors such as how government regulation of cryptocurrencies progresses, how the companies in charge of these currencies address problems currently effecting their long term viability and whether or not it becomes accepted by the public as a standard form of payment. The future of blockchain as a whole however is not dependent on these factors, although the implementation of coming technology should be developed with careful consideration to how modern cryptocurrencies were made and how they continue to perform.

Developing a blockchain and refactoring current storage systems to be built on blockchain is incredibly difficult and time intensive. More research on the viability of this technology in specific field before implementation to ensure it improves that storage sytem that it replaces.

The World Economic Forum predicts that by 2027, 10% of all Gross Domestic Product (GDP) will be stored on blockchain technology and that its positive impacts will include “Increased financial inclusion [and] Better property records in emerging markets,” and that blockchain will be “essentially a global ledger storing all transactions.” [9]

=**References:**=

[1] "The Truth About Blockchain", Harvard Business Review, 2017. [Online]. Available: https://hbr.org/2017/01/the-truth-about-blockchain. [Accessed: 12- Nov- 2017].

[2] J. BRITO and A. CASTILLO, "Bitcoin A Primer for Policymakers", Mercatus.org, 2017. [Online]. Available: https://www.mercatus.org/system/files/Brito_BitcoinPrimer.pdf. [Accessed: 06- Dec- 2017].

[3] C. McDonnell, B. Yuan and W. Lin, "Blockchains and electronic health records", Mcdonnell.mit.edu, 2017. [Online]. Available: http://mcdonnell.mit.edu/blockchain_ehr.pdf. [Accessed: 06- Dec- 2017].

[4] G. Dagher, D. Boneh, J. Clark, J. Bonneau and B. Bunz, "Provisions: Privacy-preserving proofs of solvency for Bitcoin exchanges", Eprint.iacr.org, 2017. [Online]. Available: https://eprint.iacr.org/2015/1008.pdf. [Accessed: 06- Dec- 2017].

[5] D. Drescher, “Blockchain Basics: A Non-Technical Introduction in 25 Steps”. (1st ed.) 2017. DOI: 10.1007/978-1-4842-2604-9.

[6] W. Mougayar, “The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology”. 2016

[7] J. Poon and T. Dryja, " The Bitcoin Lightning Network: Scalable Off-Chain Instant Payments ", Lightning.network, 2017. [Online]. Available: https://lightning.network/lightning-network-paper.pdf. [Accessed: 10- Dec- 2017].

[8] Vest, J. R., and L. D. Gamm. "Health Information Exchange: Persistent Challenges and New Strategies." Journal of the American Medical Informatics Association 17.3 (2010): 288­94. Web.

[9] "Technology Tipping Points and Societal Impact", www3.weforum.org, 2017. [Online]. Available:http://www3.weforum.org/docs/WEF_GAC15_Technological_Tipping_Points_report_2015.pdf. [Accessed: 11- Dec- 2017].