The healthcare industry has been exploring the blockchain technology for a while. In 2017, IBM reported that 90% of healthcare companies in 16 countries it reviewed had plans to launch a pilot blockchain project. So far, many health startups have been using technology for audits and payments.
Despite this, the blockchain can be applied in a wide range of areas in the health sector. Not only can the digitized, decentralized ledger help secure patients’ data, but it can help bring patients closer to providers.
This is in part what Healthereum, a startup in the health blockchain niche, is trying to do. By incentivizing doctor appointments with reward tokens, providers will see more patients adhering to appointments. They can then use the opportunities to collect crucial health data or monitor their patients better. The reward token (utility) runs their platform creating a reward loyalty program in healthcare, and their security token gives investors added liquidity and rights to distributions of any profits.
Healthereum isn’t the only health tech company using security offerings to improve service delivery. Guardtime, which launched in 2014, opened with the goal of helping organize keep patient’s health records safely by tapping on the blockchain’s immutable nature.
Security Tokens in Blockchain’s Health Sector: A New Beginning?
It’s becoming increasingly popular for blockchain health startups to issue out securities for their investors. Compliance for securities is strict and investors must complete KYC verification but many new startups are replacing utility tokens for securities.
Why Securities? Crypto regulation keeps intensifying around the world. In the US, it’s not up for debate. Blockchain startups are judged based on a test to decide whether they are securities or utilities. The US Securities and Exchange Commission does this to reduce cases of fraud in the ICO business.
With a good company, security tokens offer a potentially lucrative way to invest. Because securities are like stocks, investors are assured of rights and privileges just like owning stock in the company should it fold up. Of course, not many ICOs are happy about regulators forcing them to provide securities instead of utilities. However, it may be the best solution for the blockchain health industry.
Biggest Benefit? Everyone Benefits
Both providers and investors benefit from their interactions. With security offerings, investors earn dividends or other forms of profit from their tokens. In exchange, they are able to distinguish their security token from their utility token. The utility token will help providers get to engage with their patients and access to crucial health records or patients’ involvement in certain programs.
As more blockchain health companies launch, incentives in this niche are moving toward securities as opposed to utilities for their investors. Of course, this couldn’t have happened without government regulations. But as the idea continues to grow, it’s looking more like the future of the industry.
Blockchain health startups, like Healthereum, that offer meaningful securities have a better shot of scaling to the moon. If they also have a solid business idea and the talent to expand their startup, there is nothing that can stop them from succeeding.
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