Pharma and Biotech - What can we learn from Bitcoin and the Bitcoin Technologies

Learning from Bitcoin Technologies

Bitcoin, the internet money founded by Satoshi Nakamoto back in 2009 is rapidly gaining in popularity. The electronic currency also known as cryptocurrency gained a further endorsement when in April 2017 Japan announced that Bitcoin could be used as legal tender. Cryptocurrencies around the world were legitimized by that single action and the popularity and reputation of cryptocurrencies is likely to increase as more countries adopt them. However, there is more to Bitcoin, it is the basis for many technologies favored by business media companies and corporate board rooms everywhere.

Although these technologies are related to currency and finance, you may be asking yourself, how are we going to make the jump from Bitcoin to Pharma and Biotech. Great question; so, let’s make a short list of some of the challenges we face in the regulatory industries as Information Technology professionals:

  • Data Integrity The exact data recorded from the shop floor or ERP system at the time it was recorded. Having a ‘Trusted’ store and list of data.
  • Data Protection Ensuring the data collected to guarantee the business process can never be lost.
  • Transaction Dates The recording of quality critical data at the time it happens. Protecting companies and customers from date irregularities.
  • Auditable Records Ensuring records and data that both internal and agency auditors need are readable, presentable, and accurate.
  • Data Recall Finding and locating data easily.
  • Data Availability Making business and manufacturing lot data available to everyone who is authorized and available to access data.
  • Electronic Records 21 CFR Part 11 - Ensuring authenticity of the person or system writing the data to the company databases.

In the following paragraphs, I will attempt to make the case that the Bitcoin ecosystem can be used as a guide when designing information systems that will allow pharma, biotech, and other companies in regulated industries to increase the reliability and quality of the data that is stored as part of Master Batch Records (MBR) and the MBR’s supporting documentation.

So let’s get started……..by the way, the source for everything I know about Bitcoin all started when I read Andreas Antonopoulos’s book "Mastering Bitcoin". The details about Bitcoin that I describe in this essay are at a very high level. If you would like a more precise explanation, I invite you to also read Andreas’s book.

We will review four (4) parts of the Bitcoin system that we can use to help us in the regulatory industries as we look to solve problems in the coming months and years.

Part 1 - Decentralization

Bitcoin is a peer-to-peer (P2P) network of nodes that all contain the same core software and database systems. This is an important statement. These nodes are all clones of each other and as the Bitcoin database grows, all the peer nodes communicate with each other in order to ensure that the data is the same on all the nodes (this sounds expensive by corporate standards, but we will get to that later). Software, and more importantly the data, all stay in sync over time on all core nodes. This redundancy is the feature that allows the Bitcoin network and system to never go down. This redundancy is what the Bitcoin founder termed as a ‘decentralized network’. A system that is not located in any one place. It can also be stated that the Bitcoin ecosystem is a ‘Virtual Machine’ that gets its power from never having a single point of failure. When a program runs on the Bitcoin ‘Virtual Machine’ (on the Bitcoin network, the programming language is simply referred to as ‘Script’), the code can run on any node. Programs and scripts that always run. No downtime.

Part 2 - Trust

An important feature of Bitcoin network along with being decentralized, is that it provides a guarantee of ‘trust’ on the network without human intervention or an authoritative third party. The data and transactions are validated and verified by a group of ‘miners’ within the Bitcoin network. These miners give everyone participating on the network the confirmation that transactions are valid and guarantee Bitcoins are not ‘double spent’ and therefore provide the non-central trust authority to the data integrity in the Bitcoin database. It requires no single third party to verify the data. This pool of miners is the ultimate ‘check-and-balance’ with no single miner having ultimate control. The ability for fraud to occur is near zero.

The Global Bitcoin Network - 11,000 Nodes and counting.
As of this writing, there are over 11,000 Bitcoin nodes all over the world. The chances of any of us waking up tomorrow morning and not being able to use the Bitcoin software is zero. The Bitcoin network is wide and always available.

The software and network are the first half of the Bitcoin ecosystem, while the database, also known as the Blockchain, is the second half.

Part 3 - The Blockchain

I would argue that the main feature of Bitcoin that corporations and the media focus on is the ‘Blockchain’. The Blockchain in its simplest definition, is a database containing a list of chronologically ordered transactions all linked by a cryptographic hash that is immutable and permanent - a list of data that cannot be changed. If the data does get changed then the ‘chain’ would break and we would have a data integrity issue.

A Blockchain created and ‘linked’ over time
A detailed explanation of hashes will be the subject of a future article, but for this essay we will assume it is a mathematical function that will generate a large unique number that contains information from both the current and previous transaction. Each transaction added to the Blockchain will have the data contained in its transaction (i.e. say a logbook entry into an equipment tracking database table) ‘hashed’ together with the previous transaction’s hash and then it is stored in the database. Blocks and transactions are ‘chained’ together through this cryptographic hash. Now envision record after record, transaction after transaction, linked together forever in the Blockchain. This is a ‘very’ simple description of what actually takes place. Bitcoin bundles transactions into 1 Megabyte blocks and then links those 1 Meg blocks together. But you get the idea.

At first it is a little overwhelming to consider what is going on, but as I started to realize what was happening during this part of the Bitcoin design, my thoughts jumped to how this type of cryptographic hash would be beneficial to corporate data on ‘private’ company Blockchains. Remember, the Bitcoin Blockchain is on the internet all over the world. There is no reason to think that we cannot have corporate Blockchains that benefit a company as much as the Bitcoin Blockchain benefits all users and holders of the Bitcoin currency.

Part 4 - Private and Public Keys

The last item we need to talk about is the use of ‘private’ keys to ensure the ownership of Bitcoins. Users of the Bitcoin system use a ‘Wallet’ to send and receive Bitcoins. A Wallet is a software application that contains a ‘private’ key that only the owner of the wallet knows about. This key is much like the password we all use today, but extremely more difficult to guess or break because it is a number so large you would need a quantum computer to figure it out with a few years of processing time. With this private key, the owner of a wallet can generate ‘public’ keys that other users of the network can send Bitcoins to. These public keys are what Bitcoins are assigned to on the Blockchain when users engage in the sending and receiving of the currency.

Let’s rehash (no pun intended) on what we know about the Bitcoin system at this point:

  1. Bitcoin is a decentralized network of machines that exist on the Internet. All Bitcoin servers contain the same core software. There is no master node - hence decentralized. All the nodes working together act as a large 'Virtual Machine'.
  2. Bitcoin has ‘trust’ built into the system with no third-party present to authenticate that trust. The trust on the network is established by ‘miners’ validating transactions and by keeping each other honest and ensuring transactions are valid and guarantees that any given Bitcoin cannot be ‘double spent’.
  3. The database of the Bitcoin system is the ‘Blockchain’. This database of Bitcoin transactions is immutable and cannot change. This database contains the activity of every Bitcoin ever created since the beginning of time (2009 in Bitcoins case).
  4. Bitcoins are received and spent by user Wallets that contain the user’s private keys and through the use of public keys generated from the private key, the Bitcoin users can send and receive Bitcoins with confidence since only they know their private keys.

We now have a high-level overview of how the Bitcoin system works. Let’s make the jump to see how we can use these features in Pharma and Biotech. We’ll revisit the list we started this essay with and apply a Bitcoin feature to support it.

  • Data Integrity - The Blockchain - using client software within our companies and corporations to write critical data to a companywide encrypted ledger - a CompanyChain if you will. We can use encryption to protect sensitive data even further.
  • Data protection - The ‘Virtual Machine’ aspect of Bitcoin gives us multiple copies of the data everywhere a core node is operating. We can structure our private and public cloud nodes to have copies of the Blockchain database. The use of open source software and hardware is critical here in helping us control the cost of these networks coming online. This has traditionally been a big sticking point of corporate IT cultures.
  • Transaction Dates - The Blockchain gives a ‘write-once’ / ‘read-many’ database that does not allow for information to be re-written. All data is actually a new record. The ability to capture dates of both valid transactions and transactions that need to be modified and dated again all get recorded. Nothing is ever lost when tracing all the actions on a particular manufacturing lot or piece of equipment.
  • Auditable Records - The Blockchain can be examined at any time. The chain can be ‘walked’ or traced for any manufacturing lot or piece of equipment.
  • Data Retrieval - With multiple nodes present and multiple Blockchain databases available, no one system is taxed by different users of the data within the corporation. The Virtual Machine alleviates the data bottlenecks and resource loading on database servers.
  • Data Availability - The Bitcoin network with all the nodes running the same software and maintaining the exact data on each node is in fact a ‘Virtual Machine’. A machine that exists as a decentralized application that cannot go down. Could you imagine telling your manager or corporate director that you are going to install an application within your corporation that will never go down? Having a mix of corporate side and cloud based open source servers that support your main company Blockchain. Open source software is a new concept for most corporate IT divisions. Non-Unix servers are the predominant machines in corporate IT establishments and this could add a significant cost if you scale to multiple nodes to give your virtual machine more robustness. This is a business decision that must be considered.
  • Electronic Records - 21 CFR Part 11 - Private Keys - each employee or person acting in the interest of the company is assigned a private key and then has the ability to sign activities that get recorded on the Blockchain.

I think you’ll agree that is almost scary how much of this makes sense to consider. One hundred percent up time and Blockchain transactions with complete traceability! Wow…...

The Bitcoin Architecture gives us a few things to think about as we consider the future of software within the corporations we work for and do business with. Corporations will be looking to become more ‘autonomous’, requiring less reliance on the human capital while at the same time increasing its dependency on the ‘machine’. As IT professionals, it is our job to help the companies we work for become more efficient and productive. With productivity stalled in western countries, we need to look at these technologies and see how they can help us all move forward.

The Internet gave us a network that is available all the time. Bitcoin gives us a machine and a database that is available all the time. Let’s see if we can leverage these technologies into making our companies run more efficiently.