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From digital art and virtual sneakers to Taco Bell and Nyan Cat GIFs1, NFTs—non-fungible tokens—are captivating the tech world while generating million-dollar cryptocurrency payouts. What are NFTs, do they live up to the hype and what are the implications for healthcare? Here we unpack NFTs and the blockchain to help healthcare brands stay ahead of the curve to understand, and possibly one day leverage, these new tech tools.
NFTs & Blockchain 101
NFTs are unique, non-interchangeable assets that can be bought, sold and traded. They are recorded on the blockchain, a decentralized database that stores encrypted blocks of data and chains them together so that they can’t be altered. Since blockchain data can’t be changed without detection, it offers security and transparency into the asset’s authenticity. NFTs can be minted (newly created) from digital files like photos, videos and audio, or representations of real-world objects like clothing. An NFT allows the buyer to own the original item and contains built-in authentication as proof of ownership.
Turning a digital asset into an NFT is the attachment of a smart contract on a blockchain platform. To buy an NFT, you’d typically need fungible tokens (usually a cryptocurrency) and a “crypto wallet,” which serves as a digital passport to access connected platforms and marketplaces. NFT purchases differ from other digital transactions because they are all recorded through blockchain technology which permanently records every time an NFT changes hands, therefore discouraging theft or fraud.
Could Blockchain & NFTs Upend Healthcare?
NFTs and blockchain present a new approach to data storage that could profoundly impact the healthcare sector. Since the blockchain is decentralized, it offers a pathway for patients to own their medical records, giving them control over who can view their data and how it is shared, opening the door for them to profit from it.
Individual patients generate hundreds of megabytes of data each year2 from imaging, medical records, health apps, fitness trackers and beyond. Yet patients usually aren’t involved or consulted when their information is used. The most striking example comes through the story of Henrietta Lacks and her amazing HeLa cells3. Neither Ms. Lacks nor her descendants knew that her cells, retrieved during a biopsy in 1951, were being used for decades to advance scientific research. Although patient data can inform search engine results, targeted advertising and personalized medicine, patients are trusting third parties with their sensitive information. NFTs and blockchain could potentially close the doors on these practices, putting ownership back into the hands of the individual.
Jim Nasr, CEO of blockchain-enabled software developer Acoer says, “NFTs give transparency and accountability to the exchange of personal data and could improve public trust in the drug industry4.” Suppose healthcare data could be stored in one place, controlled by the patient and integrated with electronic medical records as needed. In that case, patients could be partners with healthcare industry researchers, drug developers and providers. There is still work to be done before this shift can go mainstream, and the legal and regulatory environment is hazy, particularly when it comes to immutability. Data on the blockchain cannot be deleted or changed, which conflicts with the EU’s right to erasure.
Interoperability is a much talked about issue in the conversation about current electronic medical and health record platforms (EMR/EHR). “Interoperability is meant to streamline care, promote patient-centered care and is also an opportunity to reduce healthcare costs by an estimated $30 billion5.” Patient-owned health records would create a new data-sharing infrastructure that improves the quality of care and reduces patient stress, positively impacting the healthcare experience.
As the healthcare data infrastructure evolves, the industry also has an important responsibility to consider diversity, equity and inclusion. The current digital divide6 in the U.S. threatens to leave behind 20% of Americans, predominantly low-income black, indigenous, other people of color (BIPOC), and people in rural communities, through online interactions that require expensive equipment and internet access. The federal government has prioritized reducing costs for high-speed internet for millions of Americans to close this divide7. The tech and healthcare industries can help by expanding education around healthcare data options and blockchain technology, with an eye toward one day making patient owned data a reality.
Beyond data storage, the process through which NFTs are minted also presents opportunities for verifying digital health services; authenticating credentials and data; protecting IP; tracking prescriptions and purchases from order to completion; verifying HCP credentials; tracking clinical trial consent and blood donation. In addition, NFTs minted in the blockchain could help secure the pharma supply chain to prevent counterfeit drugs.
Healthcare brands have been cautious about NFTs, but they have helped drive awareness and fundraising. Some examples include the men’s health awareness campaign, Movember8, which used an NFT to prompt men to self-screen for testicular cancer, and the Keep a Breast Foundation, whose NFT bracelets9 helped raise funds for breast cancer research. NFTs also have the power to connect patient or provider communities (e.g., in token-gated digital worlds or through associated interest groups on channels like Discord), verify offers and services (e.g., offering badges to HCPs for completing training), drive donations and offer access to events that facilitate brand experiences.
As NFTs continue to intrigue brands and consumers, it’s essential to be aware of several important challenges, including:
Environmental impact: The current process for minting NFTs on the blockchain requires enormous energy, resulting in a staggering amount of greenhouse gas emissions. Thankfully, new blockchain solutions are emerging with increased efficiency and carbon-neutral processes.
Barriers to entry: Tech literacy is a significant barrier and is likely why NFT scams are prevalent. In addition to tech literacy, attention needs to be focused on eliminating barriers like internet availability and equipment costs.
User Experience: The tech driving NFTs is not user-friendly yet. It is still very tech-forward and complicated, which may deter most people. As technology advances, the experience will become more approachable for the everyday user.
Profit transparency: NFTs are tied to the crypto economy. Creators need to be clear about who owns the rights and retains royalties and who benefits from sales and re-sales.
What Can Healthcare Brands Do Now?
Since NFTs are an emerging, evolving technology, it’s important to track new developments and monitor how different industry sectors use them. Companies can determine the short and long-term feasibility and interest in NFTs among key targets. Resist the urge to grab for the shiny new thing by offering an NFT as a gimmick. Doing so can jeopardize credibility by giving customers a permanent reminder of a valueless item linked to your brand.
For companies that can’t wait to dive into NFTs, remember that technology is most effective when grounded in authenticity and humanity. Think about what makes sense for your customer and brand and how the technology can elevate engagement and offer utility.
As interest in NFTs grows, so will the opportunities. It may be a while before NFTs make sense for many brands, but understanding this new technology is the first step in preparing for a future where NFTs and the blockchain offer meaning and value to the healthcare sector.
Kristin Ryan is Executive Vice President, US Head of Digital Innovation and Liana Huber is Vice President, Digital at GCI Health.