Challenges of NFTs in Healthcare: What Will Future Healthcare NFTs Look Like

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by Leo Petersen-Khmelnitski

Non-fungible tokens arose to digital art, then the concept expanded to represent offline art, then anything unique. Our health data is unique as well. Though there are other people of the same height, with similar health conditions, combination of parameters in our personal health data profiles is unique. As such it may be represented by a blockchain based non-fungible token. In contrast to money and bitcoins, NFTs cannot be divided or exchanged for another NFT, as it represents a unique asset.

For practical means, a non-fungible token is an asset identification code and a link to an online location of the data it points to. In the context of health data, an NFT serves as a de-identified and patient-controlled gateway to health data, including terms and conditions for obtaining and using it.

Though NFTs are already employed by various healthcare stakeholders to develop lifetime medical records, in clinical research and manufacturing of pharmaceuticals, in management of blood donations, in management of fitness and health data, in monetizing ownership of health data, it is a long way to massive adoption of non-fungible tokens in healthcare.

We have presented opportunities of NFTs in healthcare. In this text, I attempt to analyse major concerns and challenges to be addressed on the way to such massive, or rather mainstream, adoption.

The Infancy of NFTs

First about perceptions. Quite a few experts (1, 2, 3) perceive non-fungible tokens to be still in the stage of infancy. They point to NFT landscape still being a very immature space. Their concerns may be grouped between security, privacy, issues with intellectual property, and interoperability.

Blockchain based non-fungible tokens are still a very young technology, where security breaches have occurred. While in art and other areas of more massive adoption, such breaches lead to losses of sometimes considerable amounts of money, in healthcare security breaches may lead to losses and unauthorized uses of sensitive personal information that may be later used to compromise individuals, blackmail them, create fake identities or to stealing digital identities. In this context, data security in healthcare is closely related to privacy issues, online fraud with NFTs unless seriously protected is possible. Hackers have successfully exploited flaws of smart contracts. In other words, there are high chances of damage to NFT based digital assets.

Another important conceptual detail. NFTs are digital certificates to represent health data stored elsewhere. In this sense, NFTs are smart contracts that point to where the information is online, and if this data is stored in an insecure place that’s susceptible to security breaches, blockchain and smart contracts are not going to help

The issues with intellectual property revolve around ownership of the health data, presented by the NFT in question. Ownership of the NFT does not give you right to own the underlying health data, as you don’t have power over the asset due to owning the NFT; NFT is only proof of ownership, a digital certificate. With the lack of unified legal base, numerous cases have been discussed when the underlying asset was claimed by somebody else.

Technical standards behind NFTs are still evolving, the lack of interoperability between major standards create a fractured landscape, that limit possibilities to monetise own health data across various healthcare stakeholders.

Legal, Blockchain and Environmental Issues

There is no legal definition of NFT that is valid globally. Some countries (UK, Japan, and some EU countries) move ahead with different approaches for classifying NFT. It will take time, along the way to functioning regulation of NFTs, we may see reactive policies and such regulatory approaches as high-risking.

Immutability is touted as proof of blockchain’s security, but this feature could pose serious problems for both patients and those who purchase health data. Any errors or inaccuracies in someone’s health information that are stored on the blockchain will not be able to be corrected, which could compromise both medical research and patient care. In addition, the blockchain’s immutability is inconsistent with the General Data Protection Regulation (GDPR) of the European Union, which grants individuals the right to correct or erase their personal data.

Finally, NFTs are called an environmental nightmare for now. A mind-bending amount of energy is consumed with every transaction. Though future blockchains are expected to leave much less carbon footprint, environmental concerns prevent mainstream adoptions.

Few Know and Fewer Use

Several researchers points to the existing wide gap in terms of user education and the overall understanding of NFTs. NFT awareness is spread among those interested in cryptocurrencies, this level of public awareness is far from adequate for this technology to enjoy universal deployment.

Further, there are still a lot, if not a majority, of patients who are unaware that they own their health data. Neither they are aware of the ability to share their data with healthcare stakeholders and providers, family member, and to apps. Significant communication efforts are required to ensure use of NFTS by wide populations.

How Healthcare NFTs Should Be

To be applied widely in healthcare, non-fungible tokens shall be easy to operate, and more importantly, easy to understand.

Second, with all the hype around decentralised governance, it is of outmost importance that NFTs in healthcare can be regulated or governed by a mechanism that will satisfy all major healthcare stakeholders, including government agencies.

Lastly, adoption of NFTs is healthcare will most likely be two-step: 1) by vendors of electronic health records and by manufacturers of electronic device in healthcare, including wearables 2) by patients