In an interview with SmartTRAK, Hashed Health CEO John Bass discusses the Company and the use case of blockchain and distributed ledger technology in the medical device industry. Hashed Health is a venture product studio that partners with healthcare and life science enterprises to introduce new blockchain-based healthcare solutions to market.
https://hashedhealth.com/wp-content/uploads/2022/01/Solving-Healthcare-Issues-with-Blockchain-Technology.png7041406Alex Poston/wp-content/uploads/2017/01/HH_logo_web_crop.pngAlex Poston2022-01-20 12:45:292022-01-20 12:45:30Solving Healthcare Issues w/ Blockchain Technology: An Interview with John Bass
Host Jeff Lin is joined by John Bass, CEO and Founder of Hashed Health, a venture studio focused on driving collaboration and innovation in healthcare. Jeff and John discuss blockchain and the innovative ways companies are leveraging the technology to impact healthcare.
Listen to the Podcast:
https://hashedhealth.com/wp-content/uploads/2022/01/PaymentMatters.png680680Alex Poston/wp-content/uploads/2017/01/HH_logo_web_crop.pngAlex Poston2022-01-19 13:46:432022-01-20 09:46:57Payment Matters: John Bass, CEO and Founder, Hashed Health
John Bass, Founder & CEO of Hashed Health, joins the AMA for a discussion on the use of technology as a foundation for improving the physician and patient experience.
https://hashedhealth.com/wp-content/uploads/2021/09/AMA-Podcast.webp549978Hashed Health/wp-content/uploads/2017/01/HH_logo_web_crop.pngHashed Health2021-09-15 09:20:402021-09-15 09:43:05American Medical Association Podcast “Making the Rounds”: Making the Rounds with John Bass, Founder & CEO of Hashed Health
Join Alex Manders and his co-hosts from the ISG Blockchain Now™ team as they explore the application of blockchain technology in the healthcare industry. Their guest is John Bass, a principal voice in the development of the global blockchain healthcare market and founder and Chief Executive of Hashed Health, a leading platform for blockchain innovation in healthcare. Hashed Health partners with healthcare enterprises to build software and network solutions, including ProCredEx (a new business model for credentialing), Signal Stream (a shared business process automation technology) and Bramble (a rational marketplace for buying and selling healthcare products and services.
Listen in as they discuss how blockchain could transform the healthcare industry, from promoting new levels of trust and transparency and better alignment with the customer to making available valuable healthcare data to the market.
https://hashedhealth.com/wp-content/uploads/2020/05/Blockchain-in-the-Healthcare-Industry-1.jpg549978Hashed Health/wp-content/uploads/2017/01/HH_logo_web_crop.pngHashed Health2020-05-19 09:19:422020-07-22 09:22:46Blockchain in the Healthcare Industry
At the August Nashville Blockchain Meetup, we caught up with Dr. Phil Baker, Co-Founder of RemediChain and the Good Shepherd Pharmacy. In this episode, Dr. Baker discusses how he is developing a blockchain solution to address the financial and environmental problems of prescription waste. Across the nation, over $100 billion worth of medication is destroyed each year. REMEDICHAIN accepts donated prescription medication and puts it in the hands of patients who would not otherwise afford it. Blockchain’s transparent, secure and immutable ledger allows for a safe and confidential distribution of medical information.
About Good Shepherd Pharmacy Good Shepherd is a nonprofit pharmacy designed to meet the needs of people who can’t afford their medications. The GoodShepRx membership program provides access to at-cost or donated medication to over 1,000 vulnerable patients with chronic conditions. In 4 years Good Shepherd Pharmacy has dispensed over $15 Million worth of donated prescription medication to vulnerable patients in Tennessee. In 2017, Good Shepherd Pharmacy gained national recognition for the creation of a prescription repository which accepts prescription donations from any individual in the United States. In 2018 the team launched RemediChain, a blockchain platform that connects people who wish to donate unopened chemotherapy drugs to those who would not otherwise be able to afford their life-saving medication.
About RemediChain RemediChain is a consortium of prescription donation programs and colleges of pharmacy dedicated to tracking prescription drug waste and resolving the financial and environmental problems associated with it. RemediChain members post donated prescriptions to a decentralized ledger to create a virtual inventory of donated prescriptions across the country. The RemediChain ledger matches medication donations with vulnerable patients while ensuring the highest levels of traceability. The virtual inventory is made available to a national network of facilities dedicated to serving vulnerable patients. RemediChain is a member of Tokenize Tennessee, a trade organization focused on realizing the full potential of emerging technologies to drive a new era in the state. For more information, visit https://www.remedichain.com.
Three ways to consume the presentation – Audio Podcast, Slides, and Audio with transcription.
Hello, I'm Philip Clothiaux. And you're listening to the Hashed Health Podcast. This show is dedicated to everything health care and blockchain related.
Here at Hashed Health, we have begun this incredible journey of developing blockchain solutions for healthcare. And we have the privilege of being able to talk with amazing people about this subject every single day. The goal of this show is to include you in these conversations. Join us as we host meetups, attend conferences and conduct interviews with our friends and other industry thought leaders. You can find more content like this at Hashed Health.com. That's w w w . h a s h e d h e a l t h . com or connect with us on Twitter @hashedhealth. Here we go.
Welcome, everybody. This is the August meeting of the Nashville Blockchain Meetup. I think we gained a few people from thirty six eighty six, so thanks for coming across the river. Thanks to our speaker Phil for coming all the way up from Memphis to tell us about his project. This wouldn't happen without some of our sponsors. So thank you to hashed health, to BTC media, to Frost Brown Todd and to LBMC. And our last sponsor and the one that is responsible for our venue tonight is WeWork and I handed over. We've got some cool stuff going on at WeWork. Yeah. Hey, guys.
Well, first off, welcome. Thanks so much for donating your Thursday night to come out and engage in this conversation. My name is Emily Bruce and I am the community manager for our downtown location, actually. So really excited to be a part of this. this evening. Um, with we work, you know, our whole mission is to help create the future of work. So we're a global community of creators. We have over eight hundred locations spread out across one hundred and twenty four cities. Now, don't quote me on that because next month it'll probably be double. So I was lucky enough to be a part of the original team that activated this Nashville market. And it's so cool to see from 2017 how we've grown in size to now two thousand members in just Nashville. And really, our mission is to disrupt the traditional office space, disrupt that definition. We want people to be excited and look forward to coming into work. It takes up so much of our time. We want you to be engaged and productive while you're here. So that's the idea behind all of the events and the beer on tap and the Kombucha. And at the end of the day, we want also free to look back and be able to say that you really did what you love. The other exciting thing that's going on with us is that if you haven't heard, we are opening up our third Nashville location on October 1st. We'll be adding another 500 members to our growing community. That's gonna be in music row in a class A brand new construction building. And right at the corner of 18th and Chet. And because we love Giles and Hashed Health so much, we actually worked with our team to create a valued partners discount code. So if you're interested, we have two free months. So October-November of our 24/7 coffee shop style membership. Love to give you more details. Get you the hook up. It's just for everybody in the room tonight. So one time exclusive.
Come and chat with me after the event if you have any questions or if you want to get the hook up. And I'm again, really excited to welcome all here. So I'll hand it back over to Giles.
Thank you so much.
Very cool. And that is gonna be an awesome building. I think it's the tallest thing on Music Row and it'll have a view that takes every advantage of that. So I'm going to turn it over to John Bass, our CEO at hashed health. He spent a lot of time recently thinking about consortia and health care and how companies are coming together around specific use cases. Well, you'll see it's going to play right into our presentation for tonight. But I think this is a great way to kick it off. So, John, thanks.
Hey, everybody. Thank you for coming out. Thank you. Thank you. It's been a while since I've talked at the meetup. Well, this is thank you for coming all. This is a meetup that's been going on for since, I think 2015. And we were used to do these in bars. And then we kind of this thing exploded during the crazy crypto days over a thousand members and we've kind of floated along since then. Over the last three years, Hashed has been very focused on mostly B2B blockchain initiatives and distribute ledger initiatives with large enterprises. Our customers are mostly U.S. and European pharma companies, health care insurers, payers health systems and federal state organizations and large I.T. companies through those projects. You know, the work we do in blockchain, it really kind of has to hit this little sweet spot between a use for the technology and why do you need a blockchain to solve that problem? And then an innovative business model that's attached to the use of that technology. What new and innovative business model is made available through the use of a digital asset or a distributed ledger or blockchain? And then is there a network of organizations or people, entities that are psyched to say, you know, to join that network and to do that, use that business model to solve that problem. That is really hard work. A lot of people the hype cycle is kind of like wavy a little bit because there's lots that can go wrong. Technically a non-technical reasons why those things don't come to life. There's a lot of use cases that we've tried that have kind of failed over time and there's lot of use cases that all the clients we work with have tried and failed.
And a lot of times they're failing for non-technical reasons. The business model doesn't have enough ROI, you can't get through legal, you can't get through procurement. It's hard enough to get a health care application through procurement at one company. It's much harder to get it through procurement at five or six companies that are looking to join a consortium. So there's a lot of reasons why that can be difficult. And so as we've seen those spaces emerge over the last three years, we've really started to think we've found some of the low hanging fruit that checks all the technical and non-technical boxes related to bring meaningful work in this space. And now we're seeing consortia that we're a part of and consortia that are, other people are convening out there in the community coming to life. And over the last couple, about the last month or so, we've been releasing some of this research that we've been doing. And I've had help from the team at Hashed Health to start to dive into some of these details. And so the write up is out there on our Web site. It's on our blog, we've done two to these blogs so far. Actually, we've done one. And the second one is going to be released on Tuesday. Nick, we tried to get it out this week, but didn't do it. It's coming out Tuesday and it's designed to kind of look at this activity over the last year and start to look at kind of what we can learn from from what's been happening in the enterprise healthcare blockchain space in twenty eighteen.
Last year there were two kind of large consortia that came together, one. The first was called the Synaptic Alliance, called Gulliver and Mike Jacobs at Kyle's at Humana and Mike's at Optum met up and decided to create a utility across the industry for provider directories. So this is how insurance companies handle their provider directory data. And it's a real big problem. And it's an example of two, you know, two. And now it's kind of become more it's Quest and Multi-planet and Aetna competitors saying, hey, look, we can't solve this problem by ourselves. Let's try to work on it together. And so they're coming together in a group to solve a common problem through a data synchronization effort. And so basically, they're all basically using a blockchain to synchronize each other's data sets and look for how those data sets are different and then solve those discrepancies. The second 2018 initiative that was that became that went live was professional credentials exchange, and it was aiming at solving the credentialing problem for practitioners in health care. So physician credentialing is a problem that has been around for forever and it hadn't gotten any better. It takes on average, six or eight months to credential a physician. They're losing about seventy five hundred nine thousand dollars per day during that process. It's a huge revenue cycle problem and it's one that each individual hospital really struggles to solve on their own. Yet they're still they're kind of doing this work and they're verifying these credentials and they're storing all the credentialing data in a database.
And so this kind of data market concept allows those facilities to open up that data set to others in the community who need to access it. Solving the revenue cycle problem and creating value from what exists exists today as an idle kind of cost center in their organizations. You're creating value from something that traditionally has been a cost and which is which is a secondary kind of value proposition. So that's a really interesting consortium that's coming around this data market concept. WellCare Anthem NGS Spectrum Health Center Health Link. Dimensions Texas Hospital. Jackson Health. A bunch of basically health systems and payers coming together. And then in 2019 you've seen kind of a flurry of consortia announcements across a number of different pharma, mostly pharma insurance companies.
And at this point in time there's very few large insurance companies and large pharma companies who are not involved in one of one or more of these projects. The health utility network is the IBMs network and really kind of kind of evolves around fabric, the fabric SDK it includes IBM,Aetna, Anthem HCSC, Cigna, PNC Bank and Sentara. So again, competitive organizations coming together to kind of collaborate and solve issues.
You Got US, which is focused on the Blue Cross Blue Shield Network, your own data in clinical data, interoperability. You've got metal edger and a couple other pharma focused initiatives. And we're going to talk about remedy change tonight. But Metal Edger is solving the track and trace problem or aimed at solving the Track and Trace problem. And then Melody is really interesting. It's a federated learning solution where a bunch of pharma companies are sharing. They're they're they're doing AI on their chemical libraries and then they're sharing that AI across the network so that if you're a part of this network, you have access to information which helps you improve your drug discovery process. So, again, large competitive organizations coming together to work together on solving a drug discovery problem that they all struggle with today. So these are things where, you know, you have trouble solving yourself so you come team up with a community of others and solve it as a community. Most of these are in the US, Melody is primarily out of the EU and they're on a variety of different protocols. It's kind of a mix between a ethereum forks of ethereum and enterprize ethereum and then some DLT protocols as well. So this is a lead in to to Phil's talk because Phil's project is one of the most interesting, I think on this whole list of really exciting projects. And I won't try to explain it 'cause Phil will do much better job than I would have that. If you're interested in some of this work, I encourage you to go look at the stuff we've been writing about on the hashtags blog and then you can learn more about these projects. And at this point, I'd like to introduce Phil Baker, who's come up from Memphis to talk about Good Shepherd and the Remedy Chain project. Thank you. Thank you, John.
Thank you. I want to just say thank you all for coming out tonight. And thank you very much for having me here to speak. It's really an honor to be included in your host group. Guys, I'm Phil Baker. I'm a pharmacist, lives in Memphis, Tennessee. Graduated pharmacy school from the University of Tennessee of Memphis in 2005. Went to work for a pharmacy chain called Kroger, was a pharmacy manager there for about six years until I just took, quite frankly, got burned out with quotas and just doing more and more and more on your feet, 14 hour days and seeing people getting turned away at the register for an ability to afford their medicines. I left there to go be director of pharmacy for a small hospital in Memphis and did that for a few years. And while I was at the hospital on the weekends on my personal time, I would meet with primarily old people in their homes, empty out their medicine cabinet, and go through all their medicine with them and make sure they were on the fewest, safest, cheapest medicines available. So we're talking grandmas that never throw anything away. We would empty the medicine cabinet, throw half that stuff away, make sure I mean, without fail, I would find that they'd be on to the same medicine or a double dose or the kidney doctor had them on the same blood pressure medicine as the heart doctor, get all that straightened out and then communicate back to the doctors.
The final list of what they should all be on, what needed to be discontinued and what not. That process is called medication management. And so in 2013, the Lord called me to start a non-profit dedicated to doing just that service and which I did. And very shortly thereafter, an organization contacted me and said, If you would be interested in opening a charity pharmacy in Memphis, we can provide you with about 80 percent of the medications you're going to need for virtually no charge. And so initially, I didn't want to open a pharmacy. What I was doing was cognitive. It was a way different. But in praying over that, the Lord made it clear, of course, wanted me to give medicine would of poor people for free. And so we fund raise for a couple of years. And in September of 2015, we opened Good Shepherd Pharmacy in the Hickory Ridge Mall in Memphis, which is a dilapidated old mall in South Memphis. We opened the pharmacy and a former bath and body works, which was really convenient because everybody worked. So so they have lots of shelves which you need a lot of shelving and a pharmacy. We had like eight thousand square feet and we probably needed eight hundred, but it worked out really well for the first three years.
We let me get this forward. I can do that. So. Good Shepherd Pharmacy, what's different about our pharmacy is we opened up with about 250 drugs that were that we've got through manufacturer donations that were free for low wage, low income uninsured patients, which was great, 250 drugs is wonderful, but it wasn't nearly enough. So we really quickly realized that if we ordered the stuff that we couldn't get for free and we just sold it, it cost, then people could afford their medicine. It was really that simple. We our first patient. We literally took her from six hundred dollars a month down to 60. And so we realized, hey, if we charge a monthly membership fee, she's going to save 500 bucks a month. We can charge her 40 bucks a month as a membership fee. We can keep a roof open over our heads and she saves tons of money. So we're the first that I know of membership model pharmacy in the country. Our members pay a monthly membership fee of $50 a month if they can afford it. If they can afford it. We sliding scale that down to zero as necessary. And then they get all of their prescriptions either for free or at cost. And it costs means the costs that the pharmacy pays for the medicine. I always use the example of Plavix, which is one of the most commonly prescribed drugs in the country right now.
30 generic Plavix at a regular pharmacy will run you anywhere from 50 to $250. Our cost on that is about eighty five cents. So people always go, Oh, I bet that's cheaper, but they really don't realize how bad the markup is on prescription drugs. Where we focus is on chronic medications. So there's two kinds of meds. This is my mozo box with simplest way to explain it. Two kinds of meds. There are chronic meds and acute meds, acute meds or the stuff that you take for less than six months. That would be pain medicine, antibiotics. You're just gonna do a short course and you're gonna be done with it. Chronic meds, you're gonna be on for six months, usually for the rest of your life. Diabetes medicine, blood pressure medicine, cholesterol medicine, all those things. We're really good at lowering the cost on this. Chronic meds, the stuff we know you're gonna be on that we can order in bulk kind of our secret sauce is we sync up all of our patient's medications so that they're all do at the same time so that we're filling prescriptions four times a year for each patient. Only that way everything's in one package. Remailer, reformasi, everything gets shipped out together and all of their medicine is kept on the same schedule all the time.
We just this year added We we are a mail order pharmacy. We added same-day delivery through a project called Scrip Ride that I'll talk about later on in this presentation.
So no insurance, no 30 day fills. All the current pharmacies in the country are built around 30 day fills. The way pharmacies make money is in three ways transaction fees, the markup on the drugs and dispensing fees. And so those are a lot better when you do twelve films a year versus four. And so we don't do any. If a patient needs a medication between our Sept ship dates, then they get just enough pills to last until the next ship date and then everything goes out back up together and everything's kept on the same schedule 50 bucks a month and on all medications at cost.
We opened in September of 2015. Since that time, we've served about thirty five hundred patients. I need to update this slide. We've got a thousand patients on the books right now. At any given time that we're serving fill in refills for our membership. Fees have generated about closer to 2 million dollars in revenue and we've read dispensed about $18 million worth of donated medicine that would have otherwise been flushed down the toilet for these 1000 patients in terms of what we can't get for free.
We saw order about one hundred thousand dollars a year for a thousand patients of drugs that we actually have to sell it costs. So just kind of give you an idea that looks like most of the medications that we get come through three nonprofit wholesalers.
The Dispensary of Hope is the biggest one there right here in Memphis. AmeriCares and direct relief are becoming bigger.
What that looks like is Pfizer doesn't want to donate a single bottle of pills to Phil Baker in Memphis, Tennessee. They want to donate a pallet of pills to one place. So these guys accept big donations and then they distribute it to charity pharmacies all around the country. And so this is where we primarily this is where we've gotten everything up till now. This is really good for the cheap stuff. The manufacturers are quick to donate that. It started with stuff that was short dated, but the tax benefits have gotten so good that they pretty much keep us in stock with everything that they're willing to donate. The really expensive stuff and these are all oral chemotherapies are in the hands of patients. And so until we started the remedy chain program, there was no legal way for people to donate those medications. Pharmacies can't accept prescriptions back into the pharmacy once they've been dispensed. There are a few programs around the country that allow hospitals and nursing homes and health care facilities to donate unused meds. But there were none that allowed individual patients or. Family members to make a donation.
And so we politic-ed for two and a half years and worked with the state of Tennessee to get a law passed so that we could start a reclamation program that allows us to accept donated meds from individual patients. Good Shepherd Pharmacy is five people in Memphis, Tennessee, a small nonprofit. I knew we couldn't just open up the flood gates and accept anything anybody wanted to donate. So we had to be specific. We chose oral chemotherapies because they're the most expensive medicines and they're also some of the most wasted. 40 percent of cancer patients pass away every year and they're on these meds when they pass away. And so that was the genesis of the Remedy Chain program. Really early on, people started coming into the pharmacy with bags full of medicine and they'd say, hey, my grandpa was on hospice with cancer. I've got all this medicine. It's unopened. There's nothing wrong with it. And I want you to give it away to poor people. And that was illegal. So we changed, got the law changed that we could start this to make that happen.
That the Web site. So two and a half years to get the law changed.
We finally could start legally accepting donations in October of last year. What that looks like is we threw up this Web site is kind of an MVP to see what would happen if you go to remedy change dot com. You can do two things. You can either donate an unused medicine or you can sign up to get on a waiting list for a medicine that you may need. Since October, we have brought in two point two million dollars worth of oral chemotherapies, about one hundred and fifty individual donations. These medications are a thousand dollars a pill and we've gotten about one hundred and about one hundred and fifty individual donations that have come in, about half of them from family members.
And the other half from cancer centers. A handful of cancer centers around the country where the patients have taken the meds back to the cancer center. That's the kind of the front end of what we're doing. You guys are a blockchain group, so I won't try to explain that to you.
What the blockchain piece looks like, you know, all this work was happening well before I learned about blockchain. The truth is, in February of 2018, I read a little book called Blockchain for Dummies or something like that. And I'm not a technical person at all, but it just kind of clicked in my head. That blockchain like this would be a great use case for blockchain. These are really high dollar valuable physical assets that can be tracked in the U.S. We track medications from the manufacturer to the wholesaler or distributor to the pharmacy and then we don't track them any further. So when we reclaim a medicine, it's off the grid, so to speak. Blockchain is the way that we reestablish chain of custody. And with all the systems that are being built out there with metal, ledger was mentioned as a really good one. We can reestablish chain of custody. We can backtrack that chain of custody on the medication and create a recreate the chain of custody from a blockchain perspective and then follow that to either it getting dispensed to a patient or being destroyed. The the remedy chain consortium is a blockchain network where the nodes on the network are universities and repositories like Good Shepherd. So the universities are the the nodes in the sense that each one will hold a copy of the ledger. You know, through consensus though, add delete drugs where we're basically maintaining a virtual inventory.
The repository sites are where the meds are coming in and where they're going out. So they're adding data to the ledgers and the universities are backing those up. It's kind of the database. The while it's great to read dispense medicine. It's equally important to just not flush it down the toilet. And there is no organization in the US that tracks prescription waste. So the Remedy Chain Consortium is dedicated to re-dispensing as much as we can possibly read dispense. And the goal is to re dispense everything ultimately. But the umbrella mission is about prescription drug waste and tracking that and seeing where the big wastes are and how we can affect that and how we can change that. And that's why the universities are really interested. They're interested in capturing this data that doesn't exist anywhere else so that it can be studied so that we can possibly influence manufacturing principles. Ideally, if everything were manufactured in blister packaging, single unit dosing, then everything could theoretically be re dispensed. If we can assign a dollar value to say, hey, Pfizer, this forty five thousand dollar drug, if you'll invest a million dollars in blister packaging, it'll turn around and allow us to recycle 16 million dollars worth of meds that we can make that case. You can't manage what you don't measure.
And so we want to start by measuring and tracking medication waste and actually what is now not just in the US but around the globe. So a couple days ago, we did a press release to announce we just signed the Lebanese American University in Beirut, Lebanon. We're in talks with the University of Zimbabwe to come on as well. And what's interesting is. While prescription waste is the overall umbrella mission of the organization, each country represents a different use case for blockchain. So in Nigeria, for example, counterfeiting is a real problem in the US. Its waste just stuff being flush. But in Nigeria, it's counterfeiting. And in Beirut and in the Middle East, where the governments tend to pay for the medications, then the black market is a big problem. You know, drugs making out of the supply chain, being stolen, black market. And so we're putting together this consortium that is prepared to apply blockchain in different ways for different use cases. We've currently got four or five universities and we have repositories in Texas, Iowa, Tennessee and Georgia.
So the goal is to have one repository university payer, at least one in every state and to build a national network so that we can distribute these medications to patients who need them before they expire.
We were recently chosen to participate in the FDA pilot with the Remedy blockchain team. And the pilot we proposed to the FDA was to look at donated meds and redistributing them to repositories all over the country like I just described. After they accepted us into the program, they said we'd love your idea, but you can't use donated meds. So we kind of had to rethink everything. And what the pilot project is now and the reason there's a a drone up there is we're looking at a lot of like mental ledger and different systems are looking at blockchain from manufacturer to wholesaler or distributor. Nobody is really looking at inter or intra hospital system transfers. So what we're gonna do is we're going to transfer some temperature controlled medications between two hospitals using a drone in North Carolina to zap us both in building the blockchain system. That's going to keep track of all that at the same time. So that's actually kicks off within a couple of weeks. And there'll be they're going to publish the results from all of that. I think in January of next year. Another blockchain project that we're working on that's kind of interesting is scrip ride, and that's can be you can check that out at scrip ride dot org where mail order pharmacy. We serve low income people that don't have a lot of money. Postage went up this year like 17 percent in January. We had to raise our shipping fee from $5 to $10. And then in June, it went up again and we were like, man, we can't charge fifteen bucks a package.
What are we going to do? So our folks are low income. They're paying ideally they're paying 50 bucks a month for their membership fee. We thought, man, it'd be great to leverage our members to make pharmacy deliveries and let them earn credit, potentially crypto where they can pay down their membership fee, 10 bucks per delivery. Pay down your membership fee. Five deliveries, your memberships free that month. And so we built out scrip ride to do just that. And in February of this year, we did a beta test with it where we use six volunteer drivers to deliver 200 packages. We charge $10 per package. So that allowed us to put two thousand dollars right back in our pocket, which for our little nonprofit. That's a that's that's like a two thousand dollar donation. That's a lot of money. And when that happened, it kind of clicked in my head. Well, this isn't just about prescription deliveries. This is a platform that any nonprofit can use to leverage volunteer drivers in the same way any nonprofit that does any sort of deliveries, whether it's prescriptions or teddy bears or meals. They can leverage this to have people volunteer their time to make these deliveries and save that expense. What kind of push this over the top was when I found out that you can actually write off your mileage as a charitable donation. Right now, that's 14 cents a mile, but it's there's legislation in place to hopefully push that up to 58 cents a mile next year.
That the same rate that you would write off for business. And at 58 cents a mile, that that's pretty significant. You can make a, you know, a few hundred miles of deliveries in the course of a year. That's that's worth writing off your taxes. And so scrip. Right. Has been something that we've incorporated into Remedy Chain and into Good Shepherd Pharmacy and that we're using it to make these deliveries. But we're also tracking the medication all the way from donation to pharmacy to patients hand from a blockchain perspective. And so script. Right. Again, it's and it creates a new mechanism for community members to support the charities they love by doing delivery services, kind of how all three of these projects come together is here. Good Shepherd Pharmacy. We recently partnered with Eli Lilly to get what's supposed to be an unlimited supply of free insulin to provide to low income folks. We've got delivery of five hundred vials of insulin and the folks that we're serving with this insulin haven't been able to afford it. So they haven't been getting insulin for quite some time. That means they need a glucose meter. They we get the insulin and vials, which means you need to use a syringe to drop your dose, which a lot of people don't know how to do. There's an education component to this. So the way that all three of these come together is we use Good Shepherd Pharmacy. These kids you see over here, these are all fourth year pharmacy interns who are delivering the insulin, using the scrip right application to the patient's home where they sit down with them.
They show them how to use the glucose meter. They show them how to use their syringes, and they ensure that they put it in the fridge and get it all in, tracking it all on blockchain, all in one nice little package, if you will. So I show that to say that while we're talking about three separate projects, Good Shepherd, Remedy Chain and scrip. Right. They really all do play together in this unique way. We partnered with all these organizations. We've really just kicked this off. We started accepting donated medications in October of last year, but everything really happened this year. And it's just incredible how far we've gotten so fast. And so a lot of partners, FedEx Institute of Technology, University of Memphis, Lipscomb was the first university to get on board with the program. They're the founding node in our blockchain network. And then most recently, the Lebanese American University in Beirut. And this is the founding team. You see myself up there. And I I've made this this morning on anybody's names on there. That's Kevin KLOSSON from Lipscomb University. He's one of the co-founders, i.e., they are net. Robert Miller works for Consensus Health. And Jason Fisher has a software development company out of Romania. He lives in Memphis as well. He's our CTO and then myself. And and that's it. That's Good Shepherd.
I loved your presentation, and I think what you're doing is really important. I don't know what politician it was. I've got a bad memory. I think it may have been Bernie Sanders who recently took a group of people up to Canada in reference to the cost of insulin and found out that you can get it up there for a lot cheaper to get us here. Right. And we know that's true around the world. So we have a pretty significant problem here. I have two parents who are both. They're both living 82 years old. They're separate in different parts of the country. But, you know, they rely on pharmaceuticals, of course. And I would say that, of course, pharmaceuticals are very important for keeping people alive. Probably both of my parents would not be alive were it not for pharmaceuticals. So I'm not anti pharmaceutical. And yet we see so many problems with pharmaceuticals. I'm from Indianapolis. Eli Lilly is in Indianapolis. I grew up with everybody talking about how Eli Lilly is just the most wonderful organization company in the world. And yet they were the first ones to produce methadone, which, if you read deeply into it, has not helped the heroin opioid epidemic, but rather as it continues to harm it. There's a lot of literature on that. I don't consider it controversial anymore. I consider it factual.
So, you know, there are states now suing pharmaceutical companies for gross negligence in talking to people about opioids and saying, you know, this is going back a few decades saying opioids don't really pose a threat. You don't have to worry that much about it. And again, states are suing these companies for gross negligence. And I believe it is gross negligence. I believe it's putting profit before people profit before planet. And that disturbs me greatly. So, again, I love what you're doing. I cannot say anything negative about it at all. But I can say a lot about than I can say a lot of negative things about pharmaceutical companies and about the direction that we started out into the turn of the century with the Carnegies and the emphasis in universities, medical schools on pharmaceuticals, as opposed to an emphasis on preventive medicine and nutrition. One more thing. Charles, thanks for that. Because, you know, I can talk forever. But one more thing is that I talked to two years ago. I met a young lady at the dog park when I was there with my dog. She was a third year medical student at Vanderbilt. And she said two dates at that time. They had she had had not a single class on preventive medicine or nutrition, that everything was memorizing pharmaceuticals, memorizing pharmaceuticals. So, again, while I love what you're doing. My question to you, I know it's shocking that I would actually have a question. My question to you is, where do you see. Let's just talk about this country, because it's my country. The rest of the world tends to follow sadly sometimes. But where do you see America? 50 years or 100 years from now? Do you see us having a pharmacology based a chemical based health care system or do you see us possibly being wiser and moving over towards natural remedies, preventive medicine and end nutrition? Thanks.
Yeah. Great question. So I'll get on my soapbox, but I'll tell you briefly that I think that health care is the biggest threat to our national security. I think it's my generation's World War 3, and it's a problem we've got to figure out. I think the solutions are going to evolve trite. Price transparency and blockchain could play a big piece of that. I am optimistic. So I do think we're going to figure this out. I think we're gonna get past this opioid epidemic. Contrarily, I don't see a huge piece for blockchain and fixing the opioid epidemic there. Already the most controlled substances in the world. Blockchain doesn't add a whole lot there. I hope I'm wrong, but yeah, that's kind of that's my take on it.
My two cents.
I'm serious. Thanks for your presentation.
I wonder how do you assess the patient's need and the fact that they can't afford or they can only afford a certain amount, and especially for patients who maybe they can afford their medicine right now, but then their car breaks down. They have a five hundred dollar bill and then all of a sudden can't. So they had to, you know, prove that.
I'm so glad you asked that question, because our policy is we take everybody's word for the first 90 days, wherever you're at. Like I I've known doctors that make 150 grand a year. Some of these meds like. These chemo meds, if it's forty five thousand dollars a month and it's a 80:20 insurance plan, then you've got a $9000 co-pay. Wealthy. I couldn't do that. I couldn't do that to him for the first fill. You know, so I say that to say that we don't have a strict policy in terms of what income limits are hard to determine how we scale down that membership fee. We meet them where they're at. We do after we get them going. We walk through. We always meet people in crisis. So they've usually just had their first heart attack and now they're going to be on these four meds for the rest of their life. And or they found that they've got cancer. It's never like good news when they come to us. You meet them where they're at. We walk them through the first 90 days. And then at the second 90, we're like, okay. Can you do 10 bucks a month? Can you do. You know, we just start having a conversation with them as long as they're talking to us and they don't just cut out then. We keep having the conversation. If you can't pay this month, you can't pay. But you need to at least let us know what's going on.
We want to be praying. We're a Christian organization. We pray for our members. We have a prayer list that we pray for every single morning. And we walk through that crisis with them to get them to a place where they can they can contribute and help us keep a roof over our head and continue to serve them on the cancer side. And this is kind of the blockchain piece that didn't get into there. Every state is its own island in the sense that each state determines who can have these meds. In Tennessee, they have to be low income and uninsured in Texas. It's first come, first serve. Where you got insurance or not, it doesn't matter. So from a blockchain perspective, when we match up a donation that came from Tennessee that goes with a patient who lives in Texas, we got to smart contract our way to say, okay, this patient is insured, but they're low income, so they qualify in this state for this matter or whatever, so that we're making sure when the donation is made, if the patients on the waiting list and they made all the certain criteria. Up, up, up, up, we know that the shipping label is going to print off on the donation is made is going to be to the Iowa reclamation program. So it go straight. There's they can dispense it to the patient.
So that's a little different. And that's why there's two answers to that question. Yes, sir.
Thanks. You may have mentioned it, but when you were trying to figure out this problem, how did you land on blockchain? Was the right solution, the right tech solution to help you solve this problem efficiently?
It was it was literally I read a book that was Blockchain for Dummies. It wasn't titled then I forget what it was now, but it was a little pamphlet about because I'm not technical, I'm not a coder. I couldn't hook a printer up. I'm really I'm not exaggerating. Say, I'm not at all technical, but I read how the cryptography work.
The hashing, how digital assets work. And it just just clicked for me that this is a great use case is a great use case. Every drug has an NDC number, which is a stroke code has a lot number. It has an NDC. It's like it's coded hash that you've got your you know, perfect, perfect works out, presumably. So that was I'm a Christian, I would say just inspired. And I wasn't certain, though. Hey, I have this great idea. What happened was I looked on LinkedIn to find anybody blockchain in pharmacy. And that's how I found Kevin KLOSSON at Lipscomb University Cinema blind email that said, hey, I'm this nonprofit guy in Memphis and I have this idea. What do you think? And from there, he made introductions. And a year later, you know, here we are. This really happened quickly.
But hi, this is I feel really moved by this business model. I think it's really cool what you're working on. It strikes me you mentioned price transparency and it strikes me as you explaining how Good Shepherd handles. I'm kind of taking them at their word for what they can afford, that you're proving you're proving a totally new business model that isn't focused. Doesn't have to be focused on vulnerable populations at all. And you've already changed laws. So my first question is, is there a broader vision for attacking things like EMS and like the price transparency issues? And what is that? And my second question is, how do partners like Eli Lilly think about that? Like, how are you pitching that to your stakeholders?
Well, your second question answer first is I don't know how they're thinking about it. Like right now, we're small, we're under the radar. They Eli Lilly connection with the insulin came through those three wholesalers that I mentioned earlier. Wasn't me on the phone with them working a deal by any means? The insulin thing was a pilot program they piloted for two years that once the pilot ended. Then we got looped into the next wave.
So that was that one price transparency and PBS. Ms. Good Shepherd. I talk about low income uninsured patients, but only 60 percent of our thousand members are low income and uninsured. A lot of them are have insurance. It's just cheaper to get their meds from us. So if you have insurance and you have a $10 co-pay and you're on 10 drugs, it's 100 bucks a month. You can probably get those same drugs from us for your $50 membership fee plus $4 and 50 cents for the drugs that we can't get. You know, it just makes financial sense to use us. So the business model like you can. We've proven that you can. You can be an honest pharmacy without marking up drugs. We've extended that this year to working with self-insured employers where we're doing the same thing. We. Are completely transparent about what we're charging the employer for the prescription. We make our money on a fixed per employee fee, per employee per month fee, and whether that employee's on one prescription or 10 at the fees the same. And then where we can be honest and then work by seeking them up, we could drive prices down crazy because once every 90 days we order in bulk can get better deals and pass that onto the the the employer. And so like that said, that has spun off this whole other business that we're doing. That's completely true. It's called ERA our X. If you wanna check that out. But yeah, that's that's.
How do you select the universities or people who organizations that can run the nodes. Is it available to any university would be interested or do you get them some way.
Yeah, we we blamed it on universities because there are six colleges of pharmacy in the state of Tennessee and I thought if I can get just a couple of those and we could do a cool program in Tennessee, we got Lipscombe and then the phone started ringing. The University of Memphis does not have a college of pharmacy, but they wanted blockchains, a hot topic. They wanted to be on board. And then specifically, prescription waste data is a bigger deal than I realized. Any area. So the universities, their currency. I would say in my opinion, their currency is studies like anything that they can recruit funding for to do a study on. Is a good thing. Blockchain is a good in that area. And then prescription waste data where there's no data is another one. So they're interested in it specifically for those. So originally it was colleges of pharmacy and then it's since then it's just it's open to whomever. It doesn't necessarily have to be a college of pharmacy. The data is being added by the repositories. Good Shepherd is a repository. USDAW is the legal entity that can touch a prescription.
Say this is safe to reuse and a lot of states don't have them, but a few do. And so the they're the ones that are actually adding data to and taking and dispensing data. You know, removing drugs off of the ledger. The universities are just holding that, keeping it secure. And then ultimately studying it. And in any and it doesn't have to be university either very large health care or organization, a big hospital system. It could. It's wide open within Lebanon. We're with the Lebanese American University. But we're having lots of talks with the Ministry of Health. The Lebanon was strategic in that it's a first step. I have a heart for. There's two million Syrian refugees in the north of Lebanon. And I want to give meds over there some kind of way. Those refugees don't need thirty thousand Arkema Ms. As they need like blood pressure. They need the regular stuff. So it's a first step. The system that allows chemo meds is going to allow everything else. But that was the intention behind that. And I say that to say Ministry of Health, we've been in conversations with them. We could partner with the government in order to get meds into the country. We have to go through the government anyway. So we're looking to see what that will look like in Zimbabwe and in most of the African countries, like counterfeiting is the big thing. And so Zimbabwe, we're talking to the University ISM's of Zimbabwe. At the same time we're talking to the government. It's just like maybe they'll fund the university to do it or or maybe they won't. But that's where it's at.
Thanks for talking to us. Really impressive implementation in a short amount of time. I was wondering if you could just speak a little bit about the way your blockchain works, nuts and bolts wise. Is there like a data validation amongst these disparate parties or what are you doing on the actual under the hood?
I don't know how much I can get into that. So like I said before, like every drug is pretty identifiable in that it has an NDC, a lot number and expiration date. These drugs are getting QR codes in serialised. That's another kind of big things happening in pharmacy right now. Where does the manufacturers are tracking to the package level? Previously, they only ever track to the Latin the lot, which may be a thousand packages or maybe a hundred. It's completely variable, but now they're tracking it to the package. And so that's helpful for what we're doing in terms of validating we that's really simple because the the buck stops with the repository. So legally, once the pharmacies at the repository says this is good to go, then it's good to go. And it's been validated. There's no highly technical process to that.
Are you tying it from, say, you said the tracking really flows downstream from manufacturer to wholesaler to pharmacy and from there you lose track. And so when this gets back into the data stream, are you tying it all the way back upstream?
We are now ideally in a couple of years from now when d-s.c assays in place, there'll be systems where we can just do it like that. And metal ledger would be one of those systems. There are several others. They don't exist today. But the drugs we're looking at these the specialty meds, they go through a handful of pharmacies around the country. They're not being dispensed at Walgreens. They go through specialty pharmacies that are contracted. I say that to say that it's pretty easy to backtrack and we get them. We know what pharmacy they came from. We know from the NDC number of the lot number, especially who manufactured them. So it's usually two data points between that and we're backfilling that data.
Now, if they are serialised, then it's even it's that much easier, less tangential question is this do you do as a repository? Are you verify? How are you verifying that drugs have been stored safely or safe for reconstruction?
Yeah. OK. So we can only read dispense tablets and capsules. It's like only the safest stuff. It's tablets and capsules in pristine condition.
Nothing injectable, no patches, no inhalers, no creams, tablets and capsules that are in the original manufacturing packaging, which means the box unopened or they've been blister packaged. A lot of times hospitals and nursing homes all poured out of the bottle in blister package. It were allowed to use those. Lucky for us, these chemo meds, I had that picture of those totes, they come in pretty fancy packaging, which is blister packaging already. So that makes it really simple. But we're what we're not doing is the Amber Vial you get from Walgreens. You know, that's been open where I'm accepting those to dispose of them and to track them. But we're only re dispensing the safest meds. The only proper way to dispose of it, incinerate them. And so we want a grant from the Assisi Foundation in Memphis in January of this year to pay for our own incinerator. And we haven't bought it yet, because I'm going to have to believe it or not, a commercial grade incinerator that burns its own smoke and is DEA compliant is fifty thousand dollars. It's not that expensive, but where you can put it is very, very tricky. So I'm going to have to run to locations whenever we finally do buy it.
Just to follow up on the blockchain elements, specifically, the universities are running nodes. Can you talk about what it is they're running, in other words? Is it? You also reference metal ledger. Is metal ledger the blockchain layer or is that a separate.
So metallurgy. What's the blockchain? OK. Wasn't what what platform are we. Yeah. That's the question. Right now we're we're building on Enterprise. Theorem. However, we got a really sweet offer from a company and it's done some cool stuff on Hyper Lecher just last week, and so we're about three weeks into the build and we've gone, oh man, we need to hear these guys out. So I don't know that we won't end up on hyper ledger before it's all said and done. But that's what we're at right now. As of today, we're building on theoryand. But you're clearly not using the public at theory. I'm not on yet. The goal is to use the public theoryand. Oh okay.
You know, I'm wearing an Oregon shirt. So for all you Auburn fans, good luck this weekend. And I see the Lipscombe connection up there. So. I also went to Lipscomb's So You Make Me Proud. I'm here because some Mr. Christie at FedEx said that you see interesting things in missing live on the green. So I can be here to hear you. And this is really fascinating. What's the lesson in in sort of blockchain resilience? What would be the lesson that you've learned that you would want us all to take away?
The first thing that comes to mind is that it's so early on every like there's nobody's got nothing. Don't know a nicer way to say that. There's a lot of people talking about projects and talking a whole lot. And when you get down to what you would have, you actually believe you actually done. There's very little actually going. It's very early on. Like I read Blockchain for Dummies 18 months ago and I'm considered an expert in the field. It's that early and that's encouraging. That's a good thing. But that that's the first thing that comes to mind. Second thing is it's wide open. It's the Wild West. And a guy who doesn't know who guy who read Blockchain for Dummies 18 months ago can get a national campaign going pretty quickly and actually affect lives by using blockchain. You know, it's really it's simple to understand why at least I shouldn't say that so many people get confused. What is fundamentally really simple to understand, which is about data transparency, data integrity, people working together for the right reasons. Blockchain is one thing, but decentralization is another. The whole concept is just really it's exciting and so that they'll be the thing I'd say. Quick question here.
Who's funding you guys and moving forward? How do you expect or anticipate or hope to grow?
The the long term answer is that the universities will pay an annual membership fee in order to be members of the consortium to have access to this data that allows them to recruit funding to do studies on the data. So a win win in that regard. There's a bunch of different ways that we could monetize it. To date, we have gotten we've gotten $5000 from Lipscomb University and it's all the money we've gotten. That way, it's not a whole lot. Everybody that's involved in this project's doing it on their own dime. We're looking at. We've got a really good opportunity. We're running a small business innovation research grant with the National Institutes of Health and Néstor Cancer Institute. That looks like a home run for us. But those things are never guaranteed. I'm proud to say that, like, we're just I honestly believe if you take care of people, the money will take care of itself. And so we're just pressing forward. I've got 2 million dollars worth the drugs that show that and and having faith that it'll work itself out.
Quite frankly, we're not I'm not I mean, I didn't ask for a donation. Like we're not kind of doing that thing. We're just looking for new partners. And as we sign up more universities as potentially more revenue. And if we get this big grant, then that will definitely help.
Well, thank you so much, John. Thank you.
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https://hashedhealth.com/wp-content/uploads/2019/10/Screen-Shot-2019-10-16-at-3.23.19-PM.png549978Hashed Health/wp-content/uploads/2017/01/HH_logo_web_crop.pngHashed Health2019-10-17 11:00:382019-10-16 17:27:50Nashville Blockchain Meetup – August Meetup with Dr. Phil Baker on Prescription Waste
At the June Nashville Blockchain Meetup, we looked at Enterprise Blockchain and the proliferation of Distributed Ledger software, services, and offerings available to enterprises and corporate applications. In his presentation titled “Ledger Wars”, Corey Todaro from Hashed Heath examines the emerging commoditization of distributed ledger and blockchain protocols, and their impact on enterprise adoption. This is a topic of increasing significance as we move towards broader enterprise adoption of DLT and blockchain applications.
Three ways to consume the presentation – Audio Podcast, Video with slides, and Audio with transcription.
But anyway thank you all for being here. As always thanks to our sponsors we have Hashed Health,
LBMC, Frost Brown Todd, BTC media and then of course we work for the venue and the beer.
I’m going to turn it over to Cory. I’m excited to hear this presentation.
I think a lot of blockchain world is bumping up against these problems but haven’t spent enough time with them to be able to articulate them or know of the problems that they’re hitting. So.
I don’t think anyone spent more time with it Corey. So, I am going to hande itover.
Thank you Giles.
All I really get as I see people here have to remember not a lot.
So good evening everyone I’m Corey Todaro. I haven’t been up here for over a year now. I’ve been hard at work upstairs for Hashed Health, I am the CTO of Hashed Health. If you don’t know Hashed Health we’re at local watching company has been around for three years now. We work primarily with health care health care industry and enterprise blockchain and distributed ledger technology. If you don’t know what Enterprise blockchain is that’s what we’re going to talk about exclusively today.
There is no crypto in talk at all.
So look let’s sort of get things head on. The title of tonight’s talk is Ledger Wars which is somewhat provocative and I hope it brought you here. But what we’re really talking about is the explosive or proliferation of distributed ledger software services and offerings for use by various enterprises in various industries to implement solutions utilizing block chain type architectures or distributed ledger technology. There are more logos in this presentation than I’ve ever used before and they’ll probably be companies and protocols that you’ve never heard of. They’re just all over the place now and so it’s really becoming a competition between a lot of different protocols and services and how enterprises choose. And while there are some time seismic shifts taking place in the enterprise Blockchain Market that I think a very interesting direction that you don’t see on the open source crypto side of the world that all that will have very distinct impact on the ability of the desire for enterprises to come to this technology and to start articulating solutions and building get into work around that. And so provocative title but the real topic is the comodification of block chain a DLT software and services that exploded across the market and how that fundamentally impacts adoption.
See you here. Giles. USB.
I was talking to.
Just like ever it happened.
But you saw the laser. Well that’s only part of half the battle.
Though for many people and I still hear today I’ve been hearing it for three and a half years now. Why on earth. We went walking using the Enterprise when the entire spirit of blockchain going back to its mythological founder is about decentralization and freedom and the ability to do the things that we want. For many people the notion of enterprise blockchain is literally heresy. I’ve written about this recently and I know what I what I see. I’m a religious historian by education and training. There are very deep theological debates going on about logic that have almost nothing to do with the interests of enterprise and business and the use of this technology. And so why an enterprise want to use logic and their use in moments to change the nature of the technology itself. It’s about the distribution of complex business workflows whether it’s financial services whether it’s health care insurance business logistics companies etc. and on and on and on. There are multi party workflows which are very difficult and inefficient to process which has a very distinct impact on the bottom lines of these companies. Tremendous amount of effort and treasure is being spent simply keeping records synchronized between partners. And so it’s a fundamentally a reconciliation problem. If you know anything about block chain the automatic synchronization distributed databases of the distributor record of actions that parties take is the core value that we can bring to launching a course in its original form and bitcoin that wasn’t much used because no one changed the rules of Bitcoin. It has one set of rules about utilization and the spending of a crypto currency but it’s another issue synchronization and the ability to compose workflows or enterprise to be used for what’s properly called smart contracts on on these machines.
Most these workflows we can build business rules that match the workflows that we’re engaged in and achieve higher levels of synchronization to avoid costly reconciliation things like chargeback. So all that great phrase very common business. I paid you but it was a mistake. I like some of that money back. right. Crazy kinds of workflows that take place but ultimately if we can bring a new transactional infrastructure to many different business verticals it’s about new value creation is about achieving new ways of doing business that are possible today with either are siloed with database structures and or our communication standards that we use to send data back and forth. One of the problems I think across businesses is that we often have standard communication protocols ECI norms or standards. So an idea for simply saying OK if you’re going to communicate about this business process here’s how you need to structure that communication and then we being that message off to the other party what they do with it though is completely out of your vision. Whether they’re using it correctly whether they’re applying the rules correctly all you know is that you successfully put together a sentence with a right Graham. But you don’t know if your counterparty understood it or understood it well enough to communicate back to something that you wouldn’t. So often we’ll send out messages and we get something back from our counterparty and it makes no sense whatsoever. They’re referring to each stage of the process that doesn’t match my own view of the world. And so the opportunity for blog changes to open up those black boxes and now we have a standard form of communication but a standard form of transparent processing of those business processes so that we can achieve more.
But what we’re not going to talk about today which is an enterprise which is a blog Jane but not here. That’s like. And you might think I’m crazy to talk about enterprise watching in the week that crypto explodes and Facebook rocks the world. You’re not going to talk about the past is prologue. How did enterprises come to biology. And we have to go all the way back to 2013 2014 to really get up the of it. And it’s really two primary factors that we need to look at. The first is the development and emergence of the theory and launching which is apparently the one with a very important characteristic. Here he was the very first blog Jane that allowed allowed us to compose smart contracts. The very inspiration for all of it is the frustration around the creators of theory and working in bitcoin and saying I’m really tired of trying to make this blog change do different things colored coins smart contracts. It wasn’t built to do those things and so rather than trying to shoehorn in new functions and features that top a coin let’s just start from scratch and build a composer while launching that allows the developer and the community to write business rules that govern transactions on the ledger. And so the ability to come home with smart contracts really open the door and as they can not only build contracts about the movement of crypto but I can build contracts that can model.
Various numbers of business process. The second important function is about permission launchings permission block changes to be the phrase back in 2015 2016. The very first one of permission block change is actually a very small company headquartered in China. OK. And actually there instance was called paper ledger. They were building the world’s first permission block chain using the DFT that’s designed to be fault tolerant consensus mechanism and their goal was to build an enterprise blocking. Another small company out in the world. Bits of proof out of Germany. Also had a protocol model. Both of those companies hyper ledger and gets approved for. Swept up into what became digital assets. You turned around and donated the name hydro ledger and a code base to the Linux Foundation. He said We’re convening a new organization a new project to study and to build enterprise grade watching protocols and applications. And so through that donation of the name and an original code base hydro ledger Project was born. I’m all over hyped liquor out of the Linux Foundation It now boasts multiple log chain protocols all of which are open source and which are designed for business use primarily. So we don’t have tokens but we do have composed of all smart contracts and we have the ability to commission the network. So unlike the public lodgings where anyone in the world can choose to run.
We have to do is download the software and connect to the network and I too can be a minor but I want you I can and anyone in the world can see the transactions on every public lodging. But the notion that we can make the network permission can say I can. No. Those other notes are. Are they my business counterparts. Company a company B company C etc.. In addition Karen. Hi. What’s on the ledger from people outside our business context. That is the origin of enterprise blocking because I don’t want the world to see my business transaction. I don’t want them to know the pricing terms I’ve negotiated. That’s confidential proprietary business information that’s fundamentally unsuited to public transparent lodgings. And so about four or five years ago this movement kicked off with a couple of different protocols permission to appearing on permission. These type of literal protocols. and where have we gotten that. So the real explosive youth of enterprise block chain comes to the top in which we have an explosion of protocols that have become available. The protocol is simply a software set that we can utilize to build a distributed ledger network to run applications a whole family of a theory and related enterprise protocols. We have a forum which is JP Morgan version of the theory essentially with some important differences and changes. One of the co-founders of the theory the Gavin Wood started his own company called Perry which just this year has released something called substrate which is a plausible theory and style protocol.
That blocks a company spun out of consensus which is built something called strata getting inspired and significantly built upon the Syrian code base. And we can see new styles of organizations consensus. Joseph Rubin’s organization is dedicated to expanding the theory of ecosystem as well as unfortunately my legs are overlapping here the enterprise theory of light is a standards body dedicated to specifying and developing specifications for enterprise grade versions of the theory. So this is Niger over the theory and these are commissioned at theory and networks but in theory it was not the only game in town of course you have the explosion on the hydroelectric side as well. Primarily what was most well known is hydroelectric power. Primary contributor to that open source project is IBM. Fabric is a global emissions ledger system with the ability to write smart contracts in a variety of different general purpose program which is go way C++. No. Yes. Java. Etc. They think that suited for the. But the enterprise also importantly hydroelectric solitude is made. Code contributor is on that is Intel. very well suited for supply chain text of use cases with some very interesting features around currency of transactions. But of course there are others as well. Triangle logo up top there is something called Tinder which plays in the crypto world as well as in the enterprise block chain space.
The really interesting architecture called application launching. and the C in the bottom there is Porta which has been developed by a banking consortium called are three really interesting letter model and that there is no global letter in Portland you don’t share the ledger. All transactions are peer to peer between counterparts and if you’re not a party to the transaction your notes sees nothing holds nothing retains. Nothing about that transaction you don’t even know it’s happening. in the script that you just don’t see it fundamentally. So it’s a very different paradigm that’s that that’s built upon although it is inspired ultimately by the cryptocurrency change. There are innumerable others that I do not have space to put up here. Things like hydro or. Hi etc.. Well we have a diversity of leisure architectures approaches to writing applications or smart contract generally for the term smart contracts. It creates magical thinking. The smart trap. Well what does that look like. It’s really just an application that we write and it operates on a budget smart contract languages as well as what we call consensus protocols so mining and good governance is a consensus protocol. There’s a method by which we know which note has a canonical version of the ledger in the next block of transactions that are connected to it. And so we need mechanisms in distributed databases to figure out how are all the replicants all the copies of the database come into agreement with each other and with enterprise watching.
We’ve had an explosion of different consensus protocols because we don’t want mining. It’s expensive and it’s costly. It’s still more open and transparent networks but for business networks we need something that is radically. faster and we need something that is radically cheaper and passion contests between clusters of computers which is what crypto currencies. And so you can achieve with some of these protocols transactional throughput at the scale suitable for financial and other kinds of business. You can see transactional volumes on the order of 10 to 20000 transactions per second. Whereas the average transaction perception of does it out. Well. Transactions again. Very different environments one is open and transparent. So we need very weighty consensus protocols. Make sure you in a business environment you’ve got the legal system. I’m going to know would cheat and I’ve got I’ve got lots of resources to make that right. And so we can use lighter weight protocols that allow us to achieve speed of business unlike the open ones. And so this has been going on since about 2015. This explosion was so enterprises were choosing to experiment and to work on blocking solutions have a wide variety of choices at their disposal and their criteria for choosing is all over the map. Some enterprises might say hey I like the safety of it.
Yeah something like that old that old adage about no one got fired for choosing IBM. So I don’t know anything about this space. I’m going to go with something that makes my bosses. Other people say hey I don’t want to feel trapped. I’m going to go to something like a theory of type protocol because at least I can carry my my application to other regions of Europe. Some people are actually philosophical about it so I really believe in the vision of some of these protocol things. And I believe this is the future. And so enterprises are now faced with lots of choices and lots of different decision criteria that expand not only to the characteristics of the protocols but even the young. And so as we move from the youthful stage of enterprise block Cheney we’ve now come to a level of maturity. I call it a.. Of course as business is looking at new technology who’s come into play. But the large providers and a whole host of other people. And so instead we categorize them as a service offerings for a long chain long chain. And so the cloud providers they go to you and I said Microsoft Azure I do of course Google cloud our offering theory is the service fabric service. And these are really just provisions. Managed services for you. Officials in nodes in containers or other types of orchestration arrangements quickly deploy test networks or other types of networks.
There is lots of application development tooling that’s also being brought to bear to them on the market as well as the rise of the consulting and design services not least of which has to help us with healthcare companies with the likes of deploying Accenture Of course why organizations are playing with enterprises working with them on developing an application and really learning what works what doesn’t work. What can we do with this protocol versus that protocol. There’s lots of benchmark testing going on but these as the services offerings are really becoming too dominating the market and in fact everywhere is has announced this year that they’re launching their own launching unique to them which will be a completely managed service on their platform. All in terms of node infrastructure storage compute costs and network for one price per year. It’s a really compelling package offering that speech to the enterprise. The Enterprise is like any other kind of user. They’re your early adopters your people who like to tinker. But as we reach the main the main part of that program of adoption users enterprise is want something called for. They don’t want a protocol or a software development kit they want tooling they want demo support they want support they want high availability architecture fallback disaster recovery they need these kinds of services in order to dedicate business to this new technology and it is still very new technology for the enterprise to trust and commit to.
And so the rise of these kinds of services dramatically lower the barriers to experimentation and to entry into the market a real production level law change a distributed ledger technological solutions. And so we have as a service we have consulting and design services. We have a management orchestration each ETP over there or they’re a really good example they are a product called sextant geological Orchestra a cougar. Any clusters of block chain nodes. And so you can orchestrate a network with a single interface on it on multiple different operators at once it’s that kind of tooling that the enterprise is going to need if they’re going to actually rely on this infrastructure for for their daily business. And they’re really kind of business drivers. And so this is what you’ve seen over the last years these very big players coming into space. It’s not so much about which protocol is going to win. It’s about which protocol is best for a business case and what kinds of service options are available. This protocol versus that. And so we we deal with double softcore and ideological fights between crypto currency protocols and my bitcoin maximalist or my theory my view of this. We’re really talking about practical applications here and the range of services that can be brought to bear. This is not the end of the story.
We lost our.
Ok. But we aren’t even the biggest is the cutting edge of cutting edge developments that are taking place in the last month. That’s the wheels coming full circle. with some very surprising new pattern that we’re seeing in enterprise of launching.
And the primary exam I want to talk about something called Daniel.
Damona stands for Digital last week. It is a smart contract developed by a company called Digital asshole who actually sold the story in the collection of hypothetical donation that made co-pays to clinics. They did a lot of smart programming language it’s not a part of all. I can go spin no woods and Daniel rather it’s a it’s a better language for writing a smart contract it is more reliable it’s built on functional programming and Haskell so it has very few side effects. It’s also human readable by subject matter expert and it’s a domain specific language for business relationships in models counterparty its rights and obligations and how those rights and obligations evolve as we interact with each other. Top ADL to eat watching protocol and most impressively they’ve open source the language and achieve integration partners to make damn all of the language work on a variety of different watching calls. So they’ve announced just in the last month integrations with hyperlinks Sawtooth and VM. New forthcoming. We’ll take our calls or they announced just last week. Hydrologic fabric.
Are three quarter and very surprising one. Amazon or Medicare Advantage longer.
I was on a roaring is a cloudy version of the sequel. This is a database. It is not a deal to me it’s not even a block chain. It’s a single database and so we now see the return to the origins of block changes which are simply relational.
But we now have the ability to write smart contracts for single databases and networks of distributed databases in the form of large chains. Why is that important.
Well for the enterprise he wants to experiment with logic.
Their first goal in the past has every needs every protocol. Was it a really poor way to begin a design process.
I need to lock myself into a certain style of smart contract a certain style of network architecture is a global ledger or is it not a global variable obviously you can choose from it or not. I’m gonna make these choices first before I can do any kind of application design. This flips the paradigm on its head and allows enterprises to build an application first. Damn let us model the business process run up through test net. and see how it works then I think about who are my counterpart is Can I bring them to the table. Maybe I can be the operator of the entire solution or my counterpart. We choose the networks second. And so I don’t have a walk in anymore. I’ve now got the ability to carry my application logic to a wide variety of different offerings whether they’re full service offerings like the VM where or some of the traditional local watching letters. I typed letters all two from hydroelectric power or even the peer to peer model of an art a three quarter or something like an Amazon or four which is the first of a number of different databases that not only will be on the market is coming down the pike now to very interesting game database offerings from eight of us and the other from Google cloud. enabled us to something called the Q LTV quantum ledger database. It is a single database which has cryptographic probability that what gets written to it in all future changes to.
So you can track and prove that the database has been touched or that additions to it or per contract language written to work on top of it. Google has a similar cryptographic database trillion. They’ve got a very good point growing right now. These old trees marketers one of the corporate primitives of watching. And so we see the return of the data database a single database instead of a distributed network. And so the other reason this is important is as we think about building enterprise solutions utilizing this range of technologies. Now we can now begin to bring cost and rationality back into the equation that I know how much it takes to run a distributed network. On a per party basis I mean we can make those kind of calculations for bitcoin but we get that question all the time with our enterprise customers. This sounds like a really good application. I’m giving my counterpart is on how much we charge here. This is my team going to have to run that. They’ve never seen an error in their life. They really don’t know what this thing works. Can you run it for me. And that’s a really interesting option it sounds exciting you know we can run all the. Except that you realize if I’m running all the nodes the logic is you’re just trusting me. At the end of next year why don’t I just choose them the platform and that has a margin for my operating costs and that might be a database that you may not be fully distributed lecture.
It may not even get launched. And so we now have the ability to choose across that trust spectrum across a service spectrum and across a half a cost in margin spectrum for the best technology to bring to bear for these kinds of you multi-party workflow solutions that block changes originate. And so we really have come full circle. And so the notion legend awards is really about competition. Competition and of course competition over network architecture competition over affordability at HP which really did a very quick evolution for blocking I think fitting where we are today with our network society wide availability of power architecture out there. It’s kind of like the evolution of the Internet and fast forward. It’s only taken about five years to reach this level of diversity and this level of completeness in terms of a full product offered for enterprise to employ for watching the fealty. So we’re going to use the war metaphor then go Did the soldiers to shoot because it is on now it is on with the likes of Amazon Google Microsoft et cetera. It is on a wide variety of companies who are developing cryptographic techniques for distributed databases that it is on for application developers to find the best and most reliable and was flexible tooling to bring this kind of solution architecture to the writing business. Thank you very much.
Because one more button here that I’m not going to have because it comes with questions.
Beep beep beep.
Right. So that’s what the question is between the smart contract language like a dam on basic services. So is. What’s what’s the what’s the connection. There was the integration on there. Yes. So the SA contract operates under client level. Different clients could be provided to different counterparts and then we’ll go to the smart contract code dictates what they’re able to write to that database or to change about that database. And so in Daniel terminology you might have the right. to make an update to that ledger or to take the next step in the business process and my client would enable me to make that change to the database right to it. Now I don’t have the right app for the smart contract. I simply can’t write to the database in that regard. The cryptographic underpinnings of the database. This is not a war. This would be like in a queue LTV or a trillion. I can then turn around as the operator of a database and provide proof to those client users that it’s not just me making those decisions on your behalf. It’s actually your code and it’s actually cryptographic imports from the database that it’s impossible to make those kinds of changes to the database without the authorization of the application code. And so it is a single database and you are trusting the operator of the database that it gives you additional guarantees that the operator can’t be right against all search.
Eat you up and eat.
Yeah absolutely. In the case of a regular sequel database like Aurora it is about the trust of the operator it’s about the service level of rationality of all players. But we still have the ability to write multi-party workflows in a very programmatic way so all the parties understand exactly what’s possible and what’s impossible that given the current state one of the benefits of law change in general but specifically the smart contracts is that all the counter parties share the real time State of the business process. I can’t overstate how valuable that is because we were always operating in the dark as businesses in healthcare specifically as a relatively new contract in its files called value based contracts. I worked for a large hospital company we operated for a year without really knowing how we would perform because the KPI is not measured by us. They were measuring.
So we had our own internal calculations right. We were making good bets if you will. Well we really didn’t know and we wouldn’t know for 18 months. And so a lot of these arrangements are I want you to take financial risk now and I want you to perform in a vacuum of information. And if you do well you get a bonus. And if you don’t you get penalized but you’re not gonna learn your fate for 18 months.
Right it sounds insane but businesses are doing across all kinds of industries and so the ability for counter parties to share. I know exactly where we are in this business process. I know what’s next. I know best to do it and when it’s done is incredibly empowering in the reduction of cost and the ability for us to do value creation styles of businesses that simply aren’t possible because we don’t have the infrastructure for it and so cost efficiency is kind of the first hurdle that we get to deal to in watching the enterprise. But beyond that I think there’s a really rich area of exploration. We’ve got better more responsive infrastructure for businesses so we can do fundamentally kinds of things to each other.
This four year period for.
How is this standing over your shoulder on the slopes. The government. Directly I could see you I everything from what we’re seeing happened 18 months down the road. Your performance relate to their payments. That’s more I think it looks excited to kids get deep interaction with the government. Are you sure secondary is yours.
That was more subtle. We’re enterprise clients. I’m in selected the operational basis. When we get go down the other. banks that way to do more selection. is their best student. The the failures in setting that up wasted and what is it worth you’re actually going to be when they see new folks another day more than a year now this month that will be pretty frustrating if I just spent a ton of money shot sure a very specific program.
Well two great sets of questions. The first of which is the health healthcare example but the fundamental question is the attention of your counterparty or your ability for your counterpart to move faster than can today. And this is the interesting overlap in all DLC kind of design. Some of it is technical and some of it as well all political or the intentions of your counterpart is and the abilities of your network concerns. And technology can’t solve for now. I don’t want to pay you all the time I’m not no matter what the technology enables or if I’m not able to pay you on time. It’s just not going to happen faster if I can. And so in some cases we can’t solve it. And healthcare is a particularly thorny area because unlike some other industries it is a what I’ll call a morass of misaligned incentives. Everybody’s got their own incentive.
And they usually don’t align with yours. I’d like to give you a knife fight in the dark closet. A lot of people would start stabbing at each other. Here is the pharmaceutical manufacturing organization. Hospital local level at the network level. Everybody wants something different in the middle is the patient who’s kind of lost wandering around wondering how much this is. What’s going to happen to me I don’t know.
And so that’s a that’s an extreme example but here’s what the long chain can do. Even if people don’t pay. This is a great example I have to turn to a colleague of mine. He said well you know what I mean. What we’re talking about claims you know whether or not the insurance company wants to pay faster.
They say on average 30 to 45 days to.
And you know they make good money off of that 30 day wait. Was a nice float there and certainly you would think well they’re going to have to want to pay faster than you lots of lodging. Maybe the value is not getting paid faster. But it known the true value of the client. I’m a doctor. That plane is a moving target until it gets a good the 100 percent. It could be eighty five percent of what I asked for it would be unlikely to the.
You know it’s.
And I can say the insurance company keep your foot. Right. That’s valuable to you. That’s fine. But tell me on day one how much I’m going to be getting. And then I could do a variety of other things with that information. I can securitize it. I can use it as collateral or a variety of business situations. And so even if I can’t move incentives into the perfect alignment there’s a lot of room for getting creative on how we design DLC and interactions between counties. Your second question is what’s what’s what’s the reaction when you learned that sometimes our work is experimental best and may not lead to further development. Now this just before from my own experience a lot of our clients were burned by the air highway which preceded launching. Gone off and set up the labs and centers of excellence for A.I. and she learned to. Maybe dropped a couple million dollars that it went nowhere. And so we find generally maybe it’s specific to health care. Sure I don’t work in other industries is that enterprises are extraordinarily cautious when it comes to technical innovation. They’re not going to go off and do two things. They’re not going to spend a ton of money. I’m trying to build the solution first star clients want to learn first they want to expand they want to fail. They want to learn where’s this thing break. What can I reveal Is it true or not. And I want to experiment failed she failed experiment with. And so in some context it’s OK that we do this on purpose.
That it’s not going to go well. There was a great article I got to find the link was shared overheated. Someone’s estimating that the additional lodging our kitchens and our prize our shelf life two years. before they’ll have to be fundamentally redesigned a new architecture. That’s a pretty good life cycle for any kind of software. So I think that’s already baked into some of the attitudes but something like that and I don’t think it’s going to be either. You’ve only protocol agnostic smart contract language fundamentally changes that dynamic and so it really is I’m investing in something that I can carry forward and I can now separate application development from some of this back into infrastructure and really wait in some cases for the best offering available to me to deploy this. The second way that enterprises really hedge their bets. at least in healthcare I know this is true is no one or very few enterprises in the world are going to their core architecture their core pieces of technical infrastructure say that Britain plays with launching that is a huge bet. And so we find that people are more willing to experiment around the edges or the or the adjacencies of their business before they’re willing to go into the core really rip out very well tested and battle hardened infrastructure. Right. I know that insurance companies are still running mainframes. And let me tell you they have optimized those things to have life cycles of 40 years. That is investment that they are very unwilling to part with based upon the promises of a flashy new architecture.
There are some really good examples though of enterprises are going to part or two of them primarily are in our equities markets. The Australian Stock Exchange now the Hong Kong Stock Exchange. Australia’s the ninth largest in the world who is replacing their core settlement engine with a new deal to built. Now it’s not an open launching kind of network. It is an operator ASX is an operator for financial services in that market and they’re building a better engine better service clients. So it’s not a philosophical choice. It really is a pragmatic choice but it is a large one and that’s a project that’s going to take four years. Now that’s on the order of civil engineering if you will. How big and complex that is. But they’ve made that commitment and they’ve got to turn on data. And we’ll see when they have to turn off the old infrastructure that’s going to be a really really compelling to watch. And I commented on in the past that it’s one of the real launching applications that I’ve seen rise. There’s a lot of announcements about experiments and that’s fine. We do that work. Our competitors do that work. Enterprises do it all over the place. That’s one of the real examples of someone standing up and saying we are making this that we’re going forward. So I think we’re going to see more and more about these enterprises and I.T. departments frankly get more comfortable with this new style of architecture and the various to.
Another question. Yeah follow up with us here. Here. With the air. 30 45 days.
Making a smart move 24 years ago you make love him. Period or maybe that’s the person personally became the face of it would point out more. Different opinions on that for sure. Or if you try to see your meaning that you do if you will you remember that selected American person sure discussion how much of that error in interpersonal reaction is actually to be available to have the.
So I mean I think if look at very complex and deeply business processes how much debt time is in there just to make the data available. You’re really talking about Enterprise wargames integration of these ledgers systems and the production of data systems say hey look we know what the minimal data set is to future this determination we’re going to pull that data as fast as possible of this common shared record and let the logic handle it. And if we disagree maybe we can hold it but at least we both share where the data came from what it says and the rule that was applied in germination and let’s just get that out of the way as fast as possible. We have an honest disagreement about something. Let’s have the honest disagreement. Let’s not sit around and wait. Did you set the date. Yes we did. We have to look at it. We have to transform it in some way. I mean there’s a lot of dead time and really wasted action in some of these business processes and those are the ones I think we can speed up fundamentally. But if there isn’t I mean technology of course can solve some. Sometimes the data is not available or it’s not available from this apartment. Some third party grants. How do we get them to give to us faster. So some of these application designs and that’s why watching is really a mix of technical engineering as well as sociology. You have to understand what the counterpart is. What’s important to them what they’re capable of doing to really design a good solution that can bring value to all those parties. So it’s not really one sided that these are all great questions that reveal just how hard this work. In some cases it’s impossible. You can’t solve that problem.
He’s not one of the highest floor demands. He’s hostile to see us very close.
I’m sure I can back up a little bit. Privacy is a an obsession of mine. If I were to write a thesis on my job now about privacy. I’m watching. I’ve spent a stupid amount of time thinking about it. But it’s what always has troubled me about block chain and deal to get to go back a couple of slides. You know that sort of youthful.
We know the original law changed are radically transparent. Everyone can see everything that happens on the watch. I can see everything contract transactions ever happened the past 10 years. Now if there is a privacy model of a sword on Bitcoin from his wallet address. It’s not my name attached to a transaction as a wallet and I can generate those will. And so it can be hard to attach a wallet address to an entity or individual. It is certainly not impossible. Governments are very good at this now on tracking money laundering organized crime terrorist funding etc. and you can start to correlate external events with a large chain transaction. You can start to look behind the law of progress and figure out who is really doing these kinds of transactions. And so it’s not really privacy notices. It’s not at all because all the records are there will always be there. So all you’re doing is giving a lot of information for those algorithms to try to figure out who’s doing what. So when enterprise of launching that started the notion of how we going to handle privacy is a crucial one not only from a business attitude perspective I don’t want to share this data but regulatory concerns are overarching. I can’t share this data that I can’t make it available to anybody who cares to look. And so the very first effort at doing privacy is around architecture. We’ll make it for mission. So instead of a radically transparent ledger that’s visible to anybody who cares to look and open for anybody to run a note. We’re going to restrict that and say you know what in my network you have to be one of my business counterparts to run it and willing to restrict access to who can see the ledger to this group of people. And that begins to make sense to you. Think about what what kind of business are we going to do on his watch.
I could do data sharing.
I can transact data that is fundamentally valuable to my development. But it has to be data that I don’t care who sees it in this network. And so the set of business problems which that applies to this small. What kind of business process do I have here. I don’t care what my competitors see. About me and what I’m doing with other parties in the ecosystem. And so that gets you only so far. But it really limits the kinds of applications you can write. And so now we have an explosion of new kinds of privacy mechanisms that come to bear on these different protocols. They all have their pros and cons. I’ll talk about three very basic. The first is with hydroelectric power. They began something called private channels. So yeah we have a global ledger that we share you know on a commission basis between all these counter parties. But if I want I can transact one on one with another counterparty which sounds cool when you dig down to our you realize two things. First of all that private channel is actually another election but it’s a ledger with two parties. And if you do math you begin to realize the nightmare that this architecture becomes to have private channels where all the constituents on a network is what has to the end minus one.
Which grows very big very fast. And the facts with the banking consortium or the banking communication layer did a trial on fabric private channels. They estimated that at scale. Further proof of concept they would need. Three hundred fifty eight private channels but at scale you would need perhaps tens of thousands of private channels which means that your nose is running 7 8 10 20 different ledgers at once. And it gets very clumsy.
The second downfall of the private channel approach is that assets that you transact across a private channel are not interoperable with other ledgers. So I can transact one on one with my counterparty but I can’t take the example of an asset that assets to another private channel and transaction. See to your stranding assets and your stranding business workflows within these private channels. And so it becomes a development operations and dev ops nightmare. While you’re also reducing some of the utility that have the ability to interact with a wide variety of players. And so it’s an interesting approach. But ultimately I think it’s one that becomes overcomplicated and none of these are production scale yet. So these are estimates on what it will take but it’s certainly a warning about that. It’s pretty scary. The second approach is something like a quarter to quarter one with a radically different budget architecture and said forget the global ledger. There is no global ledger. You no one has a ledger which has a record of what you do. That’s a record of what you do with any other counterpart and all transactions are only on. Now the big difference there is you get the global ledger. You get cryptographic guarantees on blocks of transactions launching blocks of cryptographic links to each other.
And Merkel trees inside it so if any that any one transaction changes you can detect it going on. So you get these cryptographic guarantees with courting and cryptographic guarantees and transactions. There are no blocks of transactions. There is no logic in fact cordite Naderi was the first people to develop the phrase to ledger technology because people said that that’s not fortune. What they really meant was hey you dirty enterprises in Mexico. My my new ideological tool. And they said you’re right it’s not a gotcha. Both ideologically and technically it’s not watching at all. And so this model’s very interesting in that you get the privacy guarantees transaction. But I also get its portability of the assets to be counterparts two floors or two of local drawbacks of this model and there are always possible benefits to every one. It’s no good having to transact on the court a network. You’ve got to be a. I can’t provision access to the ledger to a client. Every transaction entity is a node with a certificate attached to it an IP address etc. and so that means that every counterparty has to run a global network which could get expensive and or costly or complicated devils. The second problem is although I can transact part in a partner and no one else sees anything.
If someone takes that asset a transaction with a third party they’re going to know it came from the original. And so I can’t hide the history of an individual transaction if it goes to a third party or fourth party or third party. And so there is some information leakage in that model that comes to come to bear and in many business contexts I don’t want that to happen. The party shouldn’t know where that asset came from. They should just know that it was legitimately counter parties and now it’s legitimate in the title history of some assets. It’s not should be open fundamental to to to do so counterparts across the network. And so that’s another interesting approach. There is a third approach. and that’s one that’s talked a lot about ideology Belgian press and that’s the zero knowledge. It’s their knowledge. So these are really bleeding edge mathematical or computer science formulas. It is especially impossible to prove something is true without revealing any information about any of details about what it is. So in cryptocurrency land I can prove that I have a sufficient balance to give a certain amount to another counterparty without sharing with the network who those counter parties are or how much was transact. I know that sounds counterintuitive and say the math works.
And so the notion of what we call trusted or problem proves the legitimacy or ability of a transaction of feasible. And so you report that proof to the watch and you don’t report the details of the transaction. Drawback here is that these things are really bleeding edge very computationally expensive. We did some experiments that I hacked on the area watching and estimated that our transaction fees our gas cost in the area we’re running one of these kinds of transactions. That’s six hundred dollars transact. And so all that computational power that you need to generate those kinds of proofs is really not ready for prime time yet nor is it very fast. at all. There are innumerable other kinds of approaches. Maybe we can just encrypt the data and then put it on the block change course then we have to have a provision for exchanging keys and then you’ve got to encrypt the data and give the data on a blocking release. Our contracts can’t do to them because you can’t really apply applications to encrypted data until another bleeding edge former cryptography comes along encryption and there’s tons of different approaches. I like the simple ones the best. This something like that. If you don’t want to share the information.
Don’t share the information.
Sounds simple don’t put it on the ledger or have a ledger that doesn’t share with parties on the issues. If there’s a whole area of game theory that I’ve recently been researching about utility costs for maintaining prices and the effort that parties will go to to hide information on an open or transparent network actually has a very negative cost on the overall efficiency of the system. And so privacy guarantees are not just a nice to have. They actually have a very tangible impact on the ability for value systems that we can actually measure and quantify. And so this is a really important area in enterprise blogging. It’s necessary from a wide variety of regulatory and privacy regulations not least of which my actions about things like GDP are sharing financial information. Why why am I getting my see kinds of functions as well. And so privacy is it is a core demand for enterprise to utilize this technology. And so the different pricing mechanism that come on some of these calls is really important which is why I think the return of the data is a really interesting model because I know who has the data that can have a service level agreement with them going to have a master services agreement with them I can have a business associates agreement with them and I know who to sue if they reach. So that businesses understand they don’t understand is there an. I don’t think any of us really do they understand that other legal so similar is going on usually work least in the near term for a lot of these kinds of situations.
You ask questions.
Yeah. Good to see you older like January calling.
Has gone through where. Someone the someone.
That’s a great question. I don’t know. That brings to mind all kinds of sayings mostly from the theory. The code is law. Our contract is law and there are even some states Tennessee included which is that yes our contracts can be legally enforceable. In my opinion I’m not a lawyer so I said on a front most of that is redundant law because we most legal systems in the states already recognize digital signatures. And possible. And so we really didn’t need this notion that smart contracts are actual contracts. I’m not aware of any court cases where breach of contract term was brought and the evidence was some sort of lettering recording contract. There’s all kinds of interesting functions court has got a really interesting one you can actually attach legal documents to the transaction and say hey this transaction is governed by this legal document. And if you accept the transaction you’re fucking related to that control. And so it’s exactly your vision. It’s not about trust lawlessness it’s about all nobility and enforceability. If you’re going to you can lock the larger than life letter all day long but if you lie on the letter I’m gonna have a nice time stamp on it and a legal docket attachment. That’s usually the best place to start.
All right. All right John. Thank you all.
Thanks everybody. No doubt. Special thanks to even ask for a national watching meetup. Thank you. I’ll be in D.C. thanks to prosper on top media our sponsors things we work we have sponsorship openings coming up soon so if you want to companies that want to sponsor the meetup talks Giles upcoming conversations this year include the emerging consortia and health care. We’re doing some research right now on consortia that are coming out there so you can source the health care consortium announced in twenty eighteen months five so far this year 19. And so we’re starting to do some research and some newsletters that are focused on what we’re learning from these enterprise consortia that are merging the design patterns and those consumers that some of the protocol is being used by the expert source et cetera. And there’s I think a lot of indicators that we can look at in terms of what they can expect in the second half of this year. We’re involved in two of those hashed and we see we’re planning on being involved in a couple of wars and that’s a big trend that we want to share with you guys. We also have some work in the opioids base that we’re planning on focusing on later this year and we plan to meet up around that. We’re going to Good Shepherd and the remedy chain folks come up from Memphis to talk about their project around track and trace for pharma. And I’m not sure what else but those are some of the topics coming up in the second half of the year. So we hope that. Thank you for coming and I hope you’ll come back again. And thanks to all who joined us on the livestream. And until next time we appreciate you guys departing National Lunch. Thank you.
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