A Multi Criteria Evaluation of Blockchain Technologies Applied to the Healthcare System

Master's Thesis, 2019

100 Pages, Grade: 8,5



Problem Definition
Aims and Objectives
Research Questions
Subject Relevance
The importance of emerging technologies
Relevance in Healthcare System
Thesis Structure

Blockchain Evolution
The Anatomy of a Block
Blockchain Types
Consensus Algorithms

Literature Review
Problem Statement
Proposed Solutions
Page 7 Contribution to the existing knowledge

Design & Implementation
Theoretical Framework
Research Layers
Research Design
Quality of the Research
Conducting Interviews

Research results
Step One: “Finding the healthcare system’s problems”
Step Two: “Blockchain effects on healthcare problems”
List of 15 white papers
Step Three: “Root causes of blockchain effects”
Step Four: “Evaluation of root causes”
Step Five: ”Results”
Answering the Research Questions

Discussion and Conclusion
Blockchain Solution
Solution Architecture
Solution’s Stakeholders & Hurdles
Future Steps to adopt a Blockchain Solution
Future Work

Glossary of Terms and Abbreviations



I would like to thank, first of all, my Supervisors Prof.dr. S. Jong Kon Chin and, Dr M.T.M. Emmerich, for supporting and believing in my research. Thanks for always finding time out of your busy schedules to answer my questions whenever I run into troubles and to provide wise advice. Your guidance helped me during all the research. It would not have been possible without you.

A very special gratitude also goes to the experts that have been interviewed for this research project: Edward Magrin, Sin Kuang Lo, Giorgio Fedon, Mirko De Maldè, Massimiliano Faudarole, Gabriele Sabbatini, and Guy Newing. Thanks for your precious time, your insight and your expertise. You played a central role in this research.

A special mention to Chiara. Thanks for providing me with continuous encouragement and support in this important period of my life.

Finally, thanks to my life-coaches, mum and dad. Thanks for having supported me along the way. This accomplishment would not have been possible without you. Thank you.


“People have been innovating throughout human history. Innovations allow us to do things better. However, sometimes, these innovations turn into something more. Sometimes they allow us to do better things. That is when they become disruptions.”1

Blockchain is the disruptive innovation that will change the way we exchange value. While this innovation is being considered for multiple businesses, its potential to revolutionise the healthcare system is also gaining attention. How useful would it be to access, every time we want, and we need, our full history of health records?

Moreover, what if patients could own their medical data? Healthcare system will become patient-centred. On the one hand, the overall quality of healthcare would undoubtedly rise and, on the other hand, costs, risks, and deaths will be likely to decrease. Patients will be able to see a complete picture of their medical history maturing a broader responsibility on their daily routine. They could be the CEO of their health. Doctors will be able to access real-time life-saving data, update records for their patients and so on, avoiding in this way data silos, extra costs and information blocking. However, ‘we do not own our data; we just visit them from time to time’ and, interoperability between health providers is still a hurdle to overcome. What is the solution then?

This research focuses on how blockchain can optimally adapt and improve the healthcare system. It proposes an analysis of the multiple blockchain solutions, proposed until the time of this research, and their technical features. Different blockchain types, as well as different consensus algorithms, result in different benefits, advantages and limitations regarding their application to the healthcare system. This research aims to find out, through a multicriteria evaluation, how these benefits change with different blockchain technologies.

Keywords: Health Data, Data Ownership, Blockchain, Healthcare.

List Of Figures

1.1 Image source: Gartner hype cycle for Emerging Technologies 2017

1.2. Image source: Andy Coravos. Healthcare-related blockchains projects

2.1 Analogy between the Blockchain and the Pages of a Book. Image Source: E. L. Magrin, Integrating new Technologies within the Business IT Landscape: A case for Blockchain

2.2 Network Types. Image Source: Author

2.3 Block Information Example. Image Source: Bitcoin Block #

2.4 Block Header. Image Source: Author

2.5 Hexadecimal System. Image Source: Author

2.6 Summary Blockchain Matrix. Image Source: Author

2.7 Hashing Process. Image Source: Author

3.1 Literature Review process. Source: Author

3.2 Onion Diagram. Source: Saunders,M., Lewis,P., and Thornhill, A. Research Methods for Business Students

5.1 Aspects of a more patient centred system

5.2 Research’s results summary. Source: Author

6.1 Blockchain Solution Infrastructure Data Upload. Source: Author

6.2 Blockchain Solution Infrastructure Data Retrieve. Source: Author

6.3 Blockchain technology adoption and maturity chart. Image Source: Author

List Of Tables

2.1 Summary Blockchain Types. Image Source: Author

2.2 Consensus Algorithms. Image Source: Author

2.3 Blockchain Features. Image Source: Author

3.1 Research Methodology: Input-Process-Output. Source: Author

4.1 Conducted interviews list’

5.1 Healthcare system’s problems. Source: Author

5.2 Effect of a blockchain solution on healthcare system’

5.3 Technical properties and not of a blockchain solution. Source: Author

5.4 Clustered properties of a blockchain solution. Source: Author

5.5a Blockchain properties definition. Source: Author

5.5b Blockchain properties definition. Source: Author

5.6 Summarisation of meaning Blockchain network type. Source: Author

5.7 Summarisation of meaning Consensus algorithm type. Source: Author

5.8 Final comparison of PoA, D-PoS and PoS. Source: Author



Being a doctor has always been one of the oldest vocations in the world with crucial importance throughout human history. Medicine, as well as doctors, needs to evolve. It always needed to change, throughout human history, as society, technology and people progressed. Nowadays, industry expanded enormously, cities at the same pace as the population continue to proliferate. Modern medicine is keeping the pace with this exponential growth. It has to. Enormous developments have been made in the medical field to identify and prevent illness.

It is, nowadays, an exciting time for the present and future of medicine. In this new age of smart devices, the digital revolution, self-driving cars, artificial intelligence and so on, technology, initially used as a support to healthcare service has now crucial importance. Blockchain and interconnected IT systems are leading the way.

The choice of this topic was brought up by a deep interest in innovative technologies together with their application to the healthcare system and their consequent adoption and use.

Problem Definition

Health records are particularly significant in the healthcare field. However, patients have little or no control over their medical records and data; they can not control how they are stored, where, with whom they are shared, and for which purpose. “To obtain paper copies, individuals often have to face the inconvenience of going to a medical department on person, signing forms, paying a fee and, waiting 30 to 60 days to obtain their health information”2.

Aims and Objectives

The main aim of this research is to evaluate the applicability of different blockchain technologies in the healthcare system. A multicriteria evaluation is performed, with the help of blockchain and healthcare experts, to determine which type of blockchain network and consensus algorithm suits more the healthcare system properties.

Research Questions

The following research question attempt to direct the research towards a clarification of the aims and objectives mentioned above.

(1) Which type of blockchain and consensus algorithm meets and fulfils the essential criteria for a blockchain solution to be applied to the healthcare system?
(2) Should a blockchain solution for the healthcare system be implemented on a public or private, and permissioned or permissionless network? Which are the different benefits and limitations of these types of networks when applied to the healthcare system?
(3) Which consensus mechanism fit best in such a blockchain solution in the healthcare system, Proof of Work (PoW), Proof of Stake (PoS), Delegated Proof of Stake (D-PoS), or Proof of Authority (PoA)? Which are the different benefits and limitations of PoW, PoS, D-Pos and PoA when applied to the healthcare system?


The successive list of objectives has been identified to address the above research question and the related subquestions.

- Find the main current problems for the healthcare system related to the inadequate use of IT systems in the medical field; and figure out which problem can be solved, or softened, by the adoption of a blockchain based solution in the healthcare system.
- Find the critical properties and benefits that distinguish private/public, permissioned/permissionless blockchain and consensus algorithms; Figure out which properties have the most positive impact on the healthcare system.
- Collect experts’ insights, observations and knowledge to perform a multicriteria evaluation of the different blockchain technologies applied to the healthcare system.

The importance of emerging technologies

What does ‘emerging technology’ mean? They can be defined as “new technologies that are currently developing or will be developed over the next five to ten years, and which will substantially alter the business and social environment”3. It is an innovative technology that is currently undergoing extensive experimentation. Some of them come to light from theoretical research, others due to commercial research. Where does blockchain come from?

Cryptocurrencies like Bitcoin and Ethereum have grabbed mainstream attention due to the skyrocketing values they reached during the past two years. The secret behind these digital currencies is the technology of the blockchain. Blockchain phenomena started in 2008 when, a white paper “Bitcoin, a peer to peer electronic cash system (Nakamoto) “ was published to introduce, indeed, Bitcoin.

Interest in blockchain technology is, nowadays, exponentially growing since this new technology has the potential to impact multiple industries in two major ways. First by providing a digital platform of distributed trust that reduces intermediaries and frauds. Second, it is enhancing industries’ efficiency by improving existing structures data flow and transparency. For these reasons, governments, private companies, universities, and research institutes are investing time, money and resources to explore its future potential uses.

According to the Gartner Hype Cycle for emerging technologies, blockchain still has five to ten years for mainstream adoption. The accuracy of this cycle is also due to the consideration of an additional dimension: human attitudes. “Hype Cycles also reflect human attitudes toward technology. Most technologies conform to the Hype Cycle because the invariant in the equation is people, not the technology”4.

Blockchain technology has just passed the peak of inflated expectations in its cycle as shown in Fig 1.1. Gartner hype cycle points out the level of maturity of blockchain in 2017, and it is sliding into the “Trough of Disillusionment”. In this phase, tests are ongoing, and industries are improving blockchain services based on feedbacks regarding significant problems in its implementation.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1.1 Image source: Gartner hype cycle for Emerging Technologies 2017

Relevance in Healthcare System

This disruptive technology is founding his way to many different industries, one of them, the healthcare industry. It is a fascinating time for healthcare and information technologies; innovation in IT systems is leading to the production of vast amounts of health data scattered across multiple diverse databases. Due to the increasing adoption of Electronic Health Records, health data are now stored online. However, health data ownership, data sharing, interoperability and transparency between health stakeholders are still a problem that has not yet been tackled.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1.2. Image source: Andy Coravos. Healthcare-related blockchains projects.

The many risks, challenges, limitations and, in a nutshell, problems that the healthcare industry faces every day is motivating healthcare organisations and governments to boost the system efficiency and effectiveness across its multiple functions. The healthcare system is not suffering from a lack of vertical innovation, meaning specific innovative machinery and technologies to cure health disorders; It is suffering from a lack in horizontal innovation, “ the effective transfer of knowledge and technology from one sector to another ” 5 . Interoperable IT systems are an example of horizontal innovation; These IT systems can connect the many islands of information in the healthcare system improving in this way quality and lowering costs. “As health care businesses continue to make strategic acquisitions and vertical integrations, there is a greater need for smooth transitions of IT operations across those integrations while maintaining reliable and transparent services to those on the front lines of care delivery”6.

Blockchain is an example of horizontal innovation with the capacity to boost vertical innovation in different sectors. It is an enabling technology with the potential to remodel industries’ paradigms and enable new business models. For these reasons, governments and private companies are trying to understand how this innovation can enhance the entire healthcare system. Research about the applicability of blockchain has been conducted by US government, Europe, Estonia and many private companies like IBM, Deloitte, and McKinsey. Multiple projects have been started to explore this technology applicability to the healthcare system; on the one hand, to solve problems like IT systems interoperability, health data management and ownership, healthcare analytics; on the other hand, to enhance and improve population health management, pharma supply chain, IoT integration and virtual medical consultants. Figure 1.2 summarises healthcare related blockchain projects.

Nevertheless, some professionals from the industry are still very critical about the potential impact and success of emerging technologies in healthcare. The criticism and concerns are supported by other researchers like Maarten van Limburg which states: “current frameworks for eHealth development suffer from a lack of fitting infrastructures, inability to find funding, complications with scalability, and uncertainties regarding effectiveness and sustainability”7 ; Alternatively, Ton Spil: “Although end users are satisfied and initial objectives are reached in terms of product quality and testing results, most of the innovations never reach the real world”8. Is not yet clear which type of impact blockchain will have on the healthcare system, but so far it is evident that it is having one. Besides, it is a new phenomenon that demands further research and understanding of complicated technological notions. This research also takes into account the maturity level in the Gartner Hype Cycle which positions blockchain at the peak of inflated expectations. This makes the technology a challenging object to research due to limited information availability.

Thesis Structure

The thesis is divided into three main sections, each of them is subdivided into two chapters:

1. Section one consist of “Blockchain” and “Background Theory”; The first examines blockchain technology advancement, applications and properties. The second discusses the main theoretical findings that have been found with the examination of the literature.
2. Section two consists of “Research Methodology” and “Research Design & Implementation”; The first describes the theoretical approach used to attain the aim of the study. The second put the theory into practice by providing a framework to find answers to the aforementioned research questions.
3. Section three consists of “Research Results” and “Discussion & Conclusion”; The first displays the results obtained from experts interviews and surveys. The second elaborates on the results, and analyse them to concisely provide answers to the research questions and indicate possible future works.

This chapter pointed out the importance of technology innovation, and the disruptive impact that an innovation like blockchain may have on multiple sectors. With the “problem definition” section, is clearly explained which problems is the healthcare system facing; Its significant problems have been listed and is provided with a blueprint of how blockchain could solve or soften them. All these elements highlight the relevance of further studies in blockchain technology applied to the healthcare system even though the topic is being studied by multiple governments and private companies as shown in Fig 1.2. Finally, in the thesis structure section, was given an overview of how the research is structured.



This chapter provides a detailed description of blockchain technology and a basic understanding of how this technology works, its benefits, applications, but also costs, challenges and limitations. The purpose is to prepare the readers by providing them with all the necessary elements to understand it.


What is blockchain? Blockchain is a global online database that anyone, anywhere, with an internet connection, can use. It differs from traditional databases since a central figure does not own it, it belongs to anyone.

“ The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value ” 9.

“ A blockchain is a distributed, shared, encrypted, chronological, irreversible and incorruptible database and computing system (public/private) with a consensus mechanism (permissioned/permissionless), that adds value by enabling direct interactions between users.10

“ The blockchain is considered to be a General Purpose Technology by a number of researchers. The rise of a GPT can affect the entire economy and examples include the rise of the automobile, the computer and the Internet ” 11.

In his article “A gentle introduction to blockchain technology”, Lewis provides an adequate analogy by comparing blockchain to a book. We can think of blockchain as a data structure that regards how data is logically put together and stored. This data are stored in blocks, which belong to a chain. We can say blockchain is a chain of blocks as, in the same way, a book is a chain of pages. Each page in a book contains the text, and, at the top, information about itself like the page and chapter number and name, and the title of the book.

In the same way, each block contains multiple transactions and a header. The header shows the block number and contains technical information about previous blocks and a fingerprint or hash of the data within itself. Like a book is ordered by page number, in blockchain, each block reference to the previous one by the “block’s fingerprint” as you can see in Fig 2.1.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.1 Analogy between the Blockchain and the Pages of a Book. Image Source: Author


It all started in 2008 when a white paper “Bitcoin a peer-to-peer electronic cash system” was published under the pseudonym Satoshi Nakamoto. The white paper introduced a fully distributed digital currency system in which data are contained in blocks chained together. Nakamoto introduces it as “A purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution”, but it can also be defined as a transactional distributed database shared between all the nodes participating in the peer to peer network open to anyone with an internet connection. Every node has a copy of the ledger containing specific transactions which are accessible only to users that hold the permission to access them. Each node can send a transaction to every node participating in the network without the need for a central authority in the transaction.

The lack of a central authority is one of the distinguishing characteristics of blockchain that makes it a distributed network in which no central authority or person owns the system, yet everyone can use it and help run it.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.2 Network Types. Image Source: Author

The following bullet points recap blockchains’ essential features:

- Decentralised: Blockchain core idea is to place trust, not in a single entity rather in the peer to peer network. Indeed, in a decentralised system, decisions are taken in multiple points and, the system behaviour results from the aggregate responses of the nodes participating in the decisions. “Blockchains are politically decentralized, no one controls them. Architecturally decentralized, no infrastructural central point of failure. However, they are logically centralized since there is one commonly agreed state, and the system behaves like a single computer”12.
- Distributed: In a distributed system, once decisions are taken by multiple nodes, information are distributed among all the nodes of the network and, any change will be reflected to all of them. This process cuts out single points of failure. Nodes work in coordination to process a common result (or consensus) in such a way that they look like a single entity. “Distribution reduces risk in data-tampering and frauds due to the number of nodes participating in the network”13. In such a way, blockchain provides data authenticity, consistency, timely, accuracy, and availability.
- Trustless: Blockchain allows online payments to happen between two parties without the need to trust a central authority to record transactions. Central authorities, like banks, will be replaced by a peer to peer network in which transactions have to be publicly announced and added on the blockchain. “The only way to confirm the absence of a transaction is to be aware of all transactions”.14
- Immutable: Transactions that have been added to the blockchain and so, that are shared across the nodes participating in the network, are almost impossible to be modified or reversed. Unauthorised changes or malicious tampering risks are reduced to the minimum through the use of cryptographic hash like SHA-256 used in Bitcoin Blockchain.

Blockchain Evolution

This innovative technology has been evolving throughout the last ten years. The first implementation of a distributed ledger technology DLT, blockchain 1.0, led to the creation of Bitcoin and other cryptocurrencies. However, Blockchain represents only the backbone of Bitcoin. After more or less five years the advent of Bitcoin, blockchain began to advance independently from the idea of cryptocurrency. The second generation of blockchain, Ethereum, conceived by Vitalik Buterin was born, and a new concept had been introduced: the smart contract. A smart contract is a small computer program implemented on the blockchain; it allows the nodes of the network to conduct transactions, deals and execute multiple conditions without the need for intermediaries. The third generation, blockchain 3.0, differs from the previous two due to its higher scalability, interoperability, and adaptability. Different protocols and consensus algorithms solved the problems, such as transaction speed and energy consumption, that limited the diffusion of the technology. Moreover, it introduces decentralised applications (DApps). Dapps run on a peer to peer network, a decentralised environment free from the control of a single entity.

Finally, blockchain 4.0 aims to make blockchain technology usable for business purposes and bring it closer to mass adoption by exploiting the strong foundations set by the previous versions.

The Anatomy of a Block

The block is the heart of blockchain where all the transactions are kept. New transactions are validated continuously and added to a new block by miners; This is what orders the blocks in a linear sequence over time and forms a block-chain. A block structure generally consists of two main parts:

- Header: A block header is an 80-byte long string composed by “4-byte long Bitcoin version number, 32-byte previous block hash, 32-byte long Merkle root, a 4-byte long timestamp of the block, 4-byte long difficulty target for the block (target hash), and 4-byte long nonce used by miners”15. Each block is univocally identified by this cryptographic hash, similar to a digital signature, created by hashing the block header (the 80-byte long string) twice with the SHA256 algorithm. This is a unique identifier which means that two blocks will never have the same hash. A second way to distinguish blocks is by referring to their height as shown in Fig 2.3; The ‘height’ indicates the position of the block in the blockchain.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.3 Block Information Example. Image Source: Bitcoin Block #500312

As mentioned before, in each block, a header 80-byte long string contains the previous block hash, the hash of the Merkle Root, the nonce, and the target hash. The previous block hash is used to create the current block’s hash, so, for every block ‘X’ we will need the hash of the block ‘X-1’. The Merkle Root is the final value obtained by hashing a Merkle tree. A Merkle tree is a binary tree in which transactions are coupled and hashed together recursively; Merkle trees usually have a branching factor of 2, meaning that each node has up to 2 children. By concatenating together two values at the same height of the tree, hashes are created to encode files, this process is iterated until the final ‘Root Hash’ of the tree is reached, and the Merkle root hash is obtained, Figure 2.4.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.4 Block Header. Image Source: Author

The Nonce is a number that is used only once. For Bitcoin, the nonce is an integer between 0 and 4.294.967.296.

Finally, the ‘Target Hash’ is a 64-digit hexadecimal number which we will define as ’T’. A hash is an algorithm that converts any sequence of characters and digits into a hexadecimal number of 64 digits. Hexadecimal numbers are more suitable for representing information stored in bytes since 1byte of information corresponds to a two-digit hexadecimal number. In a hexadecimal system, numbers are composed by the ten digits from 0 to 9 (decimal), plus six letters a, b, c, d, e, and f the values of each digit can be seen in Fig 2.5:

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.5 Hexadecimal system. Image Source: Author

- List of transactions Besides the header, a block contains a list of transactions which have been validated with Proof of Work by a node and added to the blockchain. However, some transactions have been transmitted to the network and are waiting to be verified and reckoned on the blockchain; These transactions form the mempool. The mempool is a pool of unconfirmed transactions that characterises each node in the network. “As blocks are mined and received by nodes, the nodes will remove any unconfirmed transactions in their mempool that are included in the block. So a mempool gets reduced in size every time a block is received”16. Transactions in the mempool are selected by mining nodes sorting them also based on transactions fees; In fact, miners have two types of compensations, the block reward, and the transaction fees. The first reward is given every time a block is mined and, it is halved every 210000 blocks are created. It was 50BTC in 2009 and now is 12.5BTC. As of today, this reward provides the greater incentive for miners. The second bounty, “Bitcoin mining fee”, is a fee that users have to pay when sending Bitcoins to incentivise miners to mine certain transactions before others. As the “Block Reward” decreases over time, transaction fees will keep miners incentivised.

Blockchain Types

It is extremely easy to get confused about different blockchains, and their application due to the similarity and complexity of these networks. This chapter aims to clarify the confusion surrounding the different types of blockchain networks by defining and delineating the major types of blockchain and their differences. “In general, four major blockchain types can be distinguished: public permissionless blockchains, public permissioned blockchains, private permissioned blockchains and private permissionless blockchains”17.

The research takes into account four types of blockchain: Public, Private, Consortium, and Semi-Private. These types are introduced and explained in the following chapter also by addressing their limitation and weaknesses. More in-depth explanations will follow in Chapter 3.

Public - Permissionless

In a public blockchain, like Bitcoin, anyone in the world with an internet connection can join and participate in the network, reading, and sending a transaction to all the nodes of the network. No single entity has the power to validate transactions, but all of them, the system is truly democratic. These transactions are transparent and anonymous; for this reason, public blockchains are considered fully decentralised meaning that, any node can participate into the consensus process to determine which blocks containing transactions get added to the chain, red nodes in Table 2.1.

Public blockchains are secured by crypto economics. Cryptoeconomics is “A formal discipline that studies protocols that govern the production, distribution, and consumption of goods and services in a decentralised digital economy. Cryptoeconomics is a practical science that focuses on the design and characterisation of these protocols”18 By combining economic incentives and cryptographic verification with mechanisms such as PoW for Bitcoin and PoS for Ethereum, nodes are incentivised to join the network. Examples of public blockchains are Bitcoin, Ethereum, Dodgecoin, Monero, Litecoin, etc.

However, this network comes alone also with some drawbacks; First, the massive amount of computational power needed to maintain the distributed ledger at a large scale. Secondly, the low speed of transaction accomplishment, together with the long transaction approval frequency. Also, lastly, the inability to change or revert a general transaction since these networks are designed to be irreversible and nodes have no control over them, they will be permanently recorded.


A Public-permissioned blockchain differs from a permissionless one since not all the nodes that participate in the network can take part in the consensus algorithm and validate transactions. The network is still open to everyone; every node can participate. The consensus mechanisms used in these types of blockchain are PoW of PoS in which  a simple majority of selected nodes validates the transaction. Green nodes participate in the network but do not take part in the validation of transactions, Table 2.1.


A private blockchain is a blockchain where nodes to join the network, which is restricted to certain participants, have to be invited, blue circle Table 2.1. They are designed for enterprise applications, built to accomplish more specific enterprises’ tasks. With this type of blockchain, the company running the private blockchain, or the network operator, has the capacity to control the nodes that participate in the network, to change the rules of the last, and to revert or modify transactions. Nevertheless, every node participating in the network has the right to participate in the consensus algorithm, red nodes Table 2.1.

The main advantages over a public blockchain are that they have already overcome the hurdle of the significant amount of power necessary to run a public blockchain; Efficiency is enhanced along with privacy since these networks are restricted, permissioned, and can be joined only through an invitation.


In this type of blockchain, the owners of the network, besides choosing who can join the network, are able to restrict who can mine blocks and participate in the specific consensus mechanism of the blockchain's network. This category provides lots of customisation options. These options include selecting nodes participating in the network after verification of their identity, designating different permissions, for each node, to perform only specific tasks, and managing multiple levels of access for nodes. Some nodes, for example, will be able to read, some to write, and some to access information stored on the blockchain depending on their permissions. These properties lead to cheaper and faster transactions because these only need to be validated by the limited number of nodes participating in the network.

This type of network fits perfectly for business and enterprises since these can set the necessary restrictions when configuring the networks and control the activities of the participants. Also, the mining reward, if there is any, is set by the network operators.

Again, in Table 2.1, red for nodes denotes participation in the consensus algorithm, while green nodes only take part in the private blockchain network delineated with a blue circle.


The following images summarise what has been discussed so far by the research. Table 2.1 displays the different blockchain types, while Fig 2.6 compares them based on validators' trust and anonymity.

Blockchain Type Explanation Visualization

Everyone can participate in the network, transact and see the Public Permissionless full transaction log, and take part in the consensus algorithm to validate data. Bitcoin Everyone can participate in the network, transact and see the full transaction log. However, only a restricted number of Public Permissioned nodes can participate in the consensus algorithm. These nodes are selected by the network itself with PoS or D-PoS.

The blockchain owner selects participants in the network Private Permissionless with the ability to transact and see transaction log. All these selected nodes can participate in the consensus algorithm.

The ability to transact and view the transaction log is restricted to the participants in the network. The blockchain Private Permissioned owner selects participants in the network and in the consensus aglorithm.

Abbildung in dieser Leseprobe nicht enthalten

Table 2.1 Summary Blockchain Types. Image Source: Author

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Figure 2.6 Summary Blockchain Matrix. Image Source: Author

Consensus Algorithms

The following section describes the different consensus algorithms through which transactions are validated and added to a general blockchain. Every type of blockchain fits better with a different consensus algorithm. The research takes into account four different types of consensus algorithm:

PoW - Proof of Work:

In a decentralised network such as Bitcoin, running on a public permissionless blockchain, the nodes participating in the network need to find an agreement among the validity, and order of the peer to peer transactions that should be added to the blocks forming the blockchain. In order to do this, miners use Proof of Work consensus algorithm. The last, allows the network to reach consensus and, in the meantime, secures the network. How does it work more technically?

A peer-to-peer electronic cash system paper describes the proof-of-work algorithm as “scanning for a value that when hashed, such as with SHA-256, the hash begins with a number of zero bits. The average work required is exponential in the number of zero bits required and can be verified by executing a single hash”19. As explained before in “The Anatomy of a Block” section, a block header contains the previous block hash, the hash of the Merkle Root, the nonce, and the target hash as you can see in Fig 2.4.

“The block is generated and added to the chain by taking the hash of the block contents, adding a random string of numbers, the nonce, and hashing the block again. If the hash meets the requirement of the target, then the block is added to the blockchain. The lower the target, the smaller the set of valid hashes.”20

Miners have to find a nonce such that:

Abbildung in dieser Leseprobe nicht enthalten

Here the ‘+’ symbol stands for concatenation of strings. The mining exercise is an iterative process of brute force in which a block header is hashed repeatedly by miners by altering the nonce value. “Mining is a competitive process, but it is more of a lottery than a race”21. In fact, due to the low, single probability of success, it is unpredictable which node in the network will generate the new block. Figure 2.7 displays an example of this process:

The string we are going to do work on is ” Hi there! ” . The aim is to find a nonce, a variation of it that SHA256 hashes to a valued beginning with 0:

Abbildung in dieser Leseprobe nicht enthalten

The block content is “ Hi there! ” . The 5 tested nonce values are 1-2-3-11-12; The one that satisfies our difficulty target is the last one “ 12 ” . In general, with a difficulty target ‘ k ’ , the aim is to produce a nonce with ‘ k ’ leading zeros.


Excerpt out of 100 pages


A Multi Criteria Evaluation of Blockchain Technologies Applied to the Healthcare System
Leiden University
Information and Communication Technologies in Business
Catalog Number
ISBN (eBook)
ISBN (Book)
blockchain, medical data, health data, healthcare system, patients data, blockchain application, blockchain track test, network, consensus, algorithm, benefits, medical data ownership
Quote paper
Nicolò De Sandre (Author), 2019, A Multi Criteria Evaluation of Blockchain Technologies Applied to the Healthcare System, Munich, GRIN Verlag, https://www.grin.com/document/585299


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