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Blockchain technology has expanded beyond cryptocurrencies and is now used in…

Blockchain technology has expanded beyond cryptocurrencies, and is now used in a number of applications, including decentralized databases, which can prevent counterfeiting through transparency and security.

This ability to secure data is particularly valuable to the healthcare sector, as blockchain technology can secure data, enhance data integrity, and enable patients to control their data more effectively.

It can also improve transparency in supply chains and drug validation. Additionally, blockchain technology helps define healthcare and has the potential to advance biomedical research by simplifying data storage and exchange.

Blockchain in the healthcare sector: Germany’s untapped potential?

Although blockchain technology offers many benefits, its applications are rarely found in the German healthcare sector.

The German Federal Ministry of Health recognized the potential of blockchain and organized a workshop on the topic in 2019.

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From 142 project outlines, 20 finalists were selected, and awards were given to projects such as secure electronic prescriptions, decentralized patient consent service models, and blockchain-based work incapacity certificate.

But so far none of these projects have been implemented.

Since then, new initiatives have emerged, but many have remained isolated and rarely implemented.

What’s stopping Germany from adopting blockchain technology?

Why are there so few blockchain projects in the German healthcare market when the technology is so promising?

Volker Nurnberg, professor of healthcare management at the Technical University of Munich, told Cointelegraph that the German healthcare sector is highly regulated and not always seen as an engine of innovation, which presents a particular challenge for startups:

“From a global perspective, the healthcare sector is not always the driver of innovation. It is also very regulated (in Germany). Startups, in particular, don’t always want to fight their way through the legal jungle.

Nurnberg also addressed the technical, ethical, and privacy hurdles that make implementing blockchain technology difficult. Protecting sensitive data and ensuring interoperability are key factors: “Without policy and regulators – due to strong regulation in the healthcare sector – the introduction of blockchain technology is not possible.”

“Particularly stringent data protection regulations to protect sensitive patient data place high demands on the security and confidentiality of blockchain systems,” Lukas Weidner, MD and investor in several decentralized autonomous medical organizations, told Cointelegraph.

The General Data Protection Regulation (GDPR) poses unique challenges to blockchains

The General Data Protection Regulation (GDPR) ensures that sensitive patient data is processed in accordance with strict security and confidentiality requirements.

This is especially important in the healthcare sector, where misuse or unauthorized disclosure of data can have serious consequences.

Therefore, GDPR compliance can be seen as a sign of quality and a basis for patients’ and users’ trust, ensuring that their data is secure and handled with care.

However, according to Weidner, these data protection and security requirements can pose a challenge for blockchain applications. This technology relies on data transparency and immutability, which may conflict with the right to be forgotten or the principle of data minimization.

These regulations could lead to companies in other countries overtaking German companies, limiting German industry’s control and influence in the global development of these technologies, Weidner said.

On the other hand, GDPR also provides the opportunity to promote the development of blockchain applications designed to comply with high standards from the beginning.

“This could make Germany a leader in developing secure, transparent and patient-oriented blockchain solutions in the healthcare sector,” Weidner said.

According to the expert, close cooperation between technology developers, data protection officials and regulatory authorities is required to fully exploit the benefits of blockchain technology and meet the requirements of the GDPR. “The goal should be to develop innovative solutions that ensure technical progress and the protection and security of patient data.”

Blockchain’s bad reputation

Another factor in the way of adoption is the association of blockchain technology with cryptocurrencies.

Associating blockchain technology with the volatility and security concerns of cryptocurrencies has a negative impact on public perception, Weidner said, adding that “the perceived energy consumption of some blockchain protocols can also lead to concerns about environmental sustainability.”

“This may lead to reservations among decision-makers and users in the healthcare sector who view the technology with suspicion, especially if sustainability and environmental protection play an important role in their organizations.”

In addition to these obstacles, “strict licensing and certification processes for medical devices mean that any technological innovation must undergo extensive testing and approval procedures, which slows the innovation cycle.”

Investing in research and necessary funding

Adopting blockchain technology in healthcare also requires significant investment in technology and expertise, which poses a particular challenge for smaller clinics and practices. According to Weidner, the need to modernize or even completely replace existing IT infrastructures and the lack of standardized solutions make implementation more difficult.

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Weidner stressed the importance of targeted investment in research and funding, especially for new technologies that comply with data protection regulations. Without this investment, Germany risks falling behind technologically and patients losing access to advanced technologies.

Interoperability and integration with existing IT infrastructures, as well as user-centric application development that allows easy interaction with blockchain-based healthcare applications, are also important, Weidner said.

“This is the only way Germany can play a leading role in developing and implementing blockchain applications in the healthcare sector.”

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