[ 1] “How to time-stamp a digital document”; Journal of Cryptology; January 1991.
[ 2] “Hidden surprises in the Bitcoin blockchain and how they are stored: Nelson Mandela, Wikileaks, photos, and Python software”;
Ken Shirriff’s blog; accessed at www.righto.com/2014/02/ascii-bernanke-wikileaks-photographs.html on Sept. 26, 2017.
[ 3] “Hash Rate”; Blockchain official website, 7-day running average; Accessed at blockchain.info/charts/hash-rate?days
AverageString= 7 on Sept. 26, 2017.
[ 4] “Mining Bitcoins Is A Surprisingly Energy-Intensive Endeavor”; Forbes website; Accessed at www.forbes.com/sites/peterdet
wiler/2016/07/21/mining-bitcoins-is-a-surprisingly-energy-intensive-endeavor/ on Sept. 26, 2017.
[ 5] “Blockchain”; Estonia government operated e-Estonia website; Accessed at e-estonia.com on Sept. 26, 2017.
[ 6] “Estonia to open the world’s first data embassy in Luxembourg”; Estonia government operated e-Estonia website; Accessed at
e-estonia.com/estonia-to-open-the-worlds-first-data-embassy-in-luxembourg/ on Sept. 26, 2017.
[ 7] “What is Factom?”; Factom website; Accessed at www.factom.com/about/faqs on Sept. 26, 2017.
[ 8] “Insurance Fraud”; FBI Reports and Publications website; Accessed at www.fbi.gov/stats-services/publications/insurance-fraud on
Sept. 26, 2017.
[ 9] “Government Efficiency and Effectiveness: Opportunities to Reduce Fragmentation, Overlap, Duplication, and Improper Payments and
Achieve Other Financial benefits”; GAO-15-440T; U.S. Government Accountability Office; Mar. 4, 2015.
[ 10] “West Virginia doctor investigated for deaths in opioid epidemic”; CBS News report; Accessed at www.cbsnews.com/news/west-virginia-doctor-michael-kostenko-investigated-for-deaths-in-opioid-painkiller-epidemic/ on Sept. 26, 2017.
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Smart contracts may also be applied here to automate
payments to the underwriter, making it impossible to
perform this type of fraud. Selling insurance without a
license also becomes more difficult if licensing can be
publicly and instantly verified with a near-instant check
to a service like Factom to confirm the status of the
The promise of blockchain may see the biggest return
on investment in combating fraud and improper payments in government benefits programs. According to a
2015 report from the Government Accountability Office,[ 9]
Medicare loses over $60 billion annually to fraudulent
activity and improper payments. Now let’s imagine that
the Centers for Medicare and Medicaid Services (CMS)
were to adopt a blockchain-based distributed ledger for
recording all physician and pharmacy payment requests
and fulfilments, along with metadata containing details on
the reasons for those requests. Analytics engines operat-
ing on this data could then readily identify cases like the
doctor in West Virginia who wrote 325 prescriptions in
one month for a total of over 19,000 oxycodone pills.[ 10]
Each of those prescriptions must be filled at a pharmacy
with attendant claims for payment, and a significant per-
centage of such prescriptions are filled through Medicare
Part D and Medicaid coverage.[ 11, 12, 13] Analytics can also
uncover other patterns of fraud, including stolen doctor
identities, double-billing, and claims for durable medical
■ ■ ■
While blockchain by itself is not a disruptive technology, the applications it allows certainly hold promise
for disrupting existing business models. Organizations
effectively taking advantage of blockchain can see significant efficiency improvements and reductions in payment
of processing fees. Blockchain holds great promise for
creating immutable records of events, which can aid in
detecting fraud and proving creation and ownership of
digital assets of all types.
In a very short amount of time, blockchain has fundamentally changed how we approach digital record-keep-ing by providing a secure and immutable transaction
ledger. Blockchain is still in an early adopter phase but
look for companies and governments to make increasing
moves toward implementing these protocols in the com-ing years.
R. GREG SZRAMA III is a software engineering manager
at Accenture, where he focuses on high-throughput data