Blockchain calls out Theranos!

Paul Sitoh
Feb 24 · 5 min read

What if the regulator had insisted that all Theranos devices had to have its results log on the blockchain. Would this have been the headlines much earlier than when the scandal was exposed? Would blockchain have really helped to expose such scandal?

Context — Aladdin’s medical record audit trail

Back in June 2018, I was leading a team to address the problem of ensuring a patient’s medical record was appropriately handled. There were a number of challenges we had to address. The main challenges were related to regulation, particularly GDPR — not exposing the patient’s identifiable data, and whether the hash or a piece of data represented identifiable data.

We decided then that we would focus on just logging activities involving the handling of medical records, in a way that cannot be disputed. Hence, we, in Elemental Concept, decided to build a Proof-of-Concept (PoC) system for one of our client Aladdin to demonstrate the application of blockchain for this use case the result can be seen here

Back then when I worked on the project, I was not aware of Theranos, let alone the fact that is was later to be exposed as a scandal. It was only recently when I start trawling youtube, that I learned of the Theranos and I began to think that our PoC could potentially be used to minimize similar scandals. What is the Theranos scandal about?

In case anyone reading this blog is unaware of the Theranos scandal, please refer to this

How was the Theranos scandal exposed?

As this is could potentially be an on-going court-case, I’ll avoid comments that may be construed as sub judice. I shall, in the tradition of Hollywood movies, state that my commentary hereon has been altered to facilitate a thought experiment.

According to published materials, Theranos was founded in 2003 but the scandal was only exposed and widely publicized in 2015. It wasn’t until 2018 when the founders of the company were charged with fraud (

As I understood from reading public materials, Theranos was claiming to have invented a device that could analyze from a tiny sample of blood and infer a person’s well-being — I am avoiding medical terms to avoid misuse and keep the conversation casual.

I also understand that regulators were not certifying devices as fit-for-purpose or manufacturers’ only claim of devices’ capability. It appears that regulators only certified if labs were able to carry out a medical analysis. Hence, evidence of the devices sold by Theranos was not as reliable as claimed could not be verified.

As a non-legal person, I am guessing selling things that did not meet expectation may not have been considered fraudulent. However, between exposure of false claims and finally the prosecution of founders took a long time. Was it caused by a lack of evidence?

I understand the evidence of wrongdoing was exposed by a whistleblower or whistleblowers.

What about the fact that patients were relying on the devices to provide accurate results?

Weren’t their well-being put at risk?

I was guessing the faith the patients placed on the reliability of the device came from regulators who certified Theranos. But there was a gap in faith in that patients had in the regulator, who themselves were blindsided by the fact they were only mandated to regulate the practice of the labs but not devices themselves.

What about the fact that investors where funding the company? On what basis were they investing?

Could Blockchain have called out the scandal earlier?

What if regulators’ insists on all Theranos devices be fitted with interfaces to record results on a blockchain?

With the results recorded on the blockchain, you will now have immutable records that cannot be disputed.

Presumably — not an accusation here but pure speculation — regulators had not felt necessary to be monitoring the results of each and every Theranos devices because it would be too overwhelming. What if some of the regulatory oversights were relegated to “smart contracts”?

After all “smart contracts” are computer codes that are completely distributed so no chance of alterations. Thus, hard to commit fraud?

In terms of calling out inconsistencies in Theranos claims, if blockchain was in place, I would say yes it would help.

Maybe claims of completely eliminating such scandals might be a bridge too far as there are technical — should we be using public or permission blockchains ?— and regulatory challenges — what can be recorded, business confidentiality? — to overcome. Nevertheless, as blockchain technologies progress to address the technical and regulatory challenges, I believe using blockchain to track medical records or actions done on medical records will help.

AI, Machine Languages (or Cognitive systems) and Blockchain

Increasingly, we are going to see the use of cognitive systems becoming prevalent in medical diagnosis. As such technologies come online and regulators will no longer be able to simply, as in the Theranos case, regulate the labs the build such system.

Increasingly too, we are going to need to constantly monitor prognosis generated by cognitive medical systems. Otherwise, there is going to be a no-persons land for, let’s just say, less than honest people to exploit.

Obviously, for regulators to undertake the tasks of recording and acting on results generated by each and every device can be overwhelming, if not impractical. This is where blockchain can help.

Blockchain’s ‘smart contracts’ can now be used to be as an extension of regulators monitoring capabilities. In other words, ‘smart contracts’ could be used to detect anomalies and present it as an event to regulators.

By having the results generated by cognitive systems distributed across multiple ledgers, it would avoid the problem similar to Theranos where results were, allegedly, manipulated by one party.

Verifying cognitive systems is not as straightforward as say a stateful system. Techniques similar to double-blind style testing will be needed. Blockchain with its distributed properties becomes useful. The more distributed the system is, the harder it is for a single party to manipulate.

In conclusion, using blockchain to avoid Theranos scandals will be a necessary aspect of the regulatory landscape. Especially with the increasing use of cognitive systems.

Paul Sitoh

Written by

Blockchain, cloud technology, software development, lean startup, design thinking and kanban/agile enthusiast

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