Anyone would be hard pressed to have missed the incredible growth in value of Bitcoin in the past year. Starting at less than $1,000 in early January 2017, it crested at nearly $20,000 before the end of the year—and just like that, the cryptocurrency craze had captured the attention of the world. Certainly, it has been an exciting ride, but what has been just as interesting but capturing much less attention is the technological plumbing that makes Bitcoin work—blockchain.

For companies that are paying attention, blockchain represents a far greater potential to disrupt every industry than Bitcoin and cryptocurrencies. Imaginations are running wild with ideas of how blockchain technology can change the process flow of data and transactions, and even how entire value chains will be turned on their heads. But while most of the early excitement for blockchain has been in financial services, it has an enormous potential to change healthcare and the medical device landscape. And while healthcare is historically slow to adopt new technologies, now is the time for medical device companies to begin giving the technology a serious look.

Understanding Blockchain

At a very basic level, blockchain is a technology that allows computers—or nodes as they are in technology parlance—to share information and exchange assets without the need of a centralized gatekeeper. What makes blockchain unique over other approaches is that it allows for this sharing and exchange to occur nearly simultaneously across the entire network of nodes in a nearly unbackable way. There are three basic features of blockchain that make it unique.

First, blockchains are essentially a sequential chain of small packets (blocks) of code that includes cryptographically protected data. Each block on the chain includes a reference to the block that was added to the chain before it and each block contains specific information such as a financial transaction or other information based on the purpose of the chain. Once a block is added to the chain through the consensus of the majority of nodes, it is nearly impossible to change it.

A second feature is smart contracts that establish “how” the blockchain nodes work with each other. Smart contracts are essentially a small amount of code that establish rules that the network of nodes follow and enforce through consensus-based majority before any transaction can be accepted onto the blockchain network.

Finally, blockchains can be public—as in Bitcoin—where all of the nodes see all of the data and information, and where access is tightly controlled, and data can be disclosed only to nodes that have the right permissions.

It’s still early days and blockchain technology has constraints that need to be overcome, but the potential to change intercompany interactions and transactions is already being recognized and piloted in nearly every industry.

What Blockchain Means for Medical Devices

With that basic understanding we can now turn to thinking about how it can be used for medical devices. Let’s walk through a few use cases:

Protecting Patient Data

Most medical devices today collect, store and transmit patient-specific data. And like nearly every situation where data is centrally stored and transmitted to another central data store, there is a risk that the data may be hacked from the device or captured during transmission by those with less-than-honorable intentions. Blockchain provides an alternative whereby the data is cryptographically protected, immutable and private that is not possible with traditional data storage and transmission processes.

Medical Devices Preventive Maintenance

Through blockchain applications it’s possible for machines to share their operating data with those responsible for maintaining it without violating compliance and privacy issues. Sensitive information, such as patients who have been treated with the device, types of procedures, and the images or other information can be shared with the maintainers but can be used for auditing, reporting and compliance. Blockchain can also keep service records that may be required depending on the device and its purpose.

Product Supply Chain

Blockchain can be leveraged to keep permanent records of the development, design, production and distribution of medical devices as well as all of the parts from suppliers. Once the information is submitted to a blockchain it cannot be changed, resulting in permanent traceability for every device.

Getting Started

As with every new technology there are a few common questions that arise, but one of the most pervasive is, “Where do we start?” Simply developing an understanding of blockchain can prove challenging, so this is always the best place to start. The public knowledge base is growing at an exponential rate and there are very good sources of public information that explain blockchains.

The second step is typically in identifying where to start using it. The best approach is to think big but to start small. Pick a use case that is a natural process where the adoption of a blockchain solution can bring quick value. An example might be the monitoring of medical device maintenance records where blockchain can make the records available to all of the right parties, stored securely and allow for a permanent and auditable trail.

Once the organization has gained some confidence and familiarity with a narrow use case, the next step is to develop an enterprise roadmap where blockchain becomes one of several elements for digital transformation. Blockchain, along with other technologies such as machine learning and mobile, can become strategic differentiators for companies competing in a highly regulated industry such as healthcare.

But regardless of how you get started, the most important step is to get started. Blockchain is becoming a topic of discussion for every boardroom in nearly every industry. Those who delay may find themselves quickly falling behind the rest of their industry.