What is an NFT?
The dictionary publisher Collins defines a non-fungible token as “a unique digital certificate, registered in a blockchain, to record the ownership of an asset such as an artwork or a collectible.”(1) Let me translate that definition for those of us, like myself, who are neophytes to the world of NFTs. Simply put, an NFT is a permanent tracking device that proves ownership of a digital file, somewhat like how you can insert a microchip under the skin in a pet to claim ownership if it runs away. An NFT is a token connected to a digital asset such as artwork or medical data that preserves the right of ownership in the metaverse. Non-fungible means “not exchangeable.” Most things in the real world are non-fungible, because most physical objects are unique and are not exchanged one for one. No painting, pet, or person is equivalent to another.
On the other hand, money is one of the few items that is fungible, meaning one dollar is equivalent to another dollar, and one Bitcoin is equal to another Bitcoin. The underlying decentralized technology that enables the digital transfer of funds is blockchain. Blockchain prevents digital money from being duplicated or hacked, and it removes the need for a centralized authority, such as a bank, to validate transactions. The advantage of these transactions is that intermediaries are not involved. And, like Bitcoin, the record of ownership of an NFT is kept on the Internet, where millions of computers (that use vast amounts of energy) keep track of content and transactions.
It simply is not appropriate—or even legal—for private companies and institutions to make money from patient data.
Creating or mining NFT transactions leverages blockchain technology, akin to what cryptocurrencies like Bitcoin use. In short, the technology relies on a decentralized network of computers employing advanced cryptography to verify the validity of a transaction. I have previously explored the relevance of blockchain in healthcare and pharma, where I highlighted its ability to secure sensitive medical data and curb counterfeit drugs.(2)
Just as NFTs have disrupted the art world, they could change the digital health landscape by giving patients unprecedented control over their medical information. NFT allows everyone to own their data.
As we dive into the digital health era, personal health sensors and apps equip patients with personalized data to enable them to become more proactive in managing their health. But it still is mostly the norm for these sensitive data to be controlled by the companies providing these services, and those companies often profit from it, oblivious to the needs of patients. For example, a pregnancy-tracking app sells aggregated data to employers. Similarly, 23andMe intends to develop drugs based on the genetic database it has amassed from customers who used its genetic testing kits, and these customers might not even have been made explicitly aware of such potential use of their data.
It simply is not appropriate—or even legal—for private companies and institutions to make money from patient data. If the real paradigm change of digital health—that of empowering patients—takes place (and it does), the same should apply to monetizing their health data.
The Potential of NFTs in Healthcare
Say you’ve decided to order a direct-to-consumer DNA testing kit with a nutrition plan by a private for-profit company tailored to patients’ genetic makeup and biome. You also know that the company might sell, unbeknownst to you, your genetic data to third parties for research purposes. But you settle for the service anyway because it’s the most accurate way to get a personalized diet that is unique to you.
However, by selling your genetic data, the company could be making large amounts of money that they will never share with you. Moreover, as such sensitive data gets passed along the transaction chain, the risk of mishandling the information increases.
Now let’s look at the scenario if your genetic data is mined as NFTs. The information will come with an inherent feature for tracking. You would be able to see where your data appears and hold those who used it without your permission accountable because you are the sole owner of the data, as certified by the NFT authentication. Moreover, the NFT owner can enable a feature that earns money whenever a transaction occurs with your data.
In the previous examples of pregnancy-tracking and 23andMe apps, patients whose data is used by those companies aren’t earning a cent. But with an NFT approach, companies offering digital health services could encourage patients to participate in studies by making it possible for them to contribute their data and earn money from it. Other third parties interested in using the data for research or developing new products could reach out directly to patients on a digital marketplace. Compared with the traditional approach, the main difference is that patients do have the choice to share their data in a more informed manner. With the underlying blockchain technology and an NFT certification, patient data thus could be made more transparent and could equip patients with control over their health records.
NFTs in Medicine: The Future or Fad?
Although much about the use of NFTs in healthcare is still speculative, some startups are exploring this potential. One such company is Aimedis (aimedis.io ), which has a medical NFT marketplace where patients can participate in transactions involving their health data. The health monitoring app Go! can collect individual activity and wellness data from popular apps such as Apple Health, Google Fit, and Fitbit. Doing so creates Well-being NFTs, or W-NFTs, permeated by the scarcity of the users’ health data assets. These can be traded on the open market.
However, several potential roadblocks to adopting the technology in the near future exist, especially in healthcare. Blockchain technology runs inefficiently, with large amounts of energy required for minor transactions. The significant greenhouse gas emissions that result may contribute to climate change. As a result, NFTs may not be outright commercially viable in the near future. Alternatives for creating NFTs that could use a fraction of the computing power currently involved in their transactions are in the works.
Then there is the issue of whether companies offering digital health services will adopt the technology. Sharing profits with patients might not be attractive, especially to companies that previously profited from using patient data.
Bottom Line: Unlike cryptocurrencies—a form of money or digital asset—the purpose of NFTs is to be equivalent to a certificate of authenticity. NFTs have revolutionized the entertainment industry and the art world. They act to permit individuals to own a portion of a digital representation of a tangible asset. Everything from digital art and music to bits of video and healthcare data can be monetized with NFTs. NFT sales reached an estimated $3 billion in the first quarter of 2021 alone.(3) Next up, NFTs might help reform data transfer in healthcare.
Reference
Collins English dictionary 2020. www.collinsdictionary.com/english/creative . Accessed January 20, 2021.
Robinson R, Baum NH. Blockchain for healthcare. J Med Pract Manage. 2019; 35:63-66.
Clark PA. Report: NFT sales exceeded $17B in 2021. Axios. March 10, 2022. www.axios.com/2022/03/10/nft-sales-17b-2021-report .