Blockchain is your future

Here is what that future is going to look like...

To date, the vast majority of hype, speculation and interest in blockchain has been focused on Bitcoin. And it’s no wonder—any cryptocurrency that becomes a multi-billion market in just a few years is bound to attract some attention.

But we at EY propose that there is another model of blockchain—and this is one that will truly change our lives and how we do business.  We call this the permissioned blockchain.

Blockchains are back office systems in which data, instead of being hoarded on one server or system, is automatically distributed to all of the participants in the blockchain network. This simple innovation creates an environment in which data is transparent, hard to tamper with, and much more cyber-secure. But there are significant differences between the bitcoin and permissioned models. For example:

The permissioned model thrives in an environment where a wide range of participants are involved in a large number of high-value transactions (which, when you think about it, is almost any large business). Its benefits can be increases in revenue, reduced costs, faster throughput, and real-time transparency for everyone involved.

EY and Microsoft collaborate on new rights and royalties blockchain network

EY is currently conducting close to 100 proof-of-concepts or build-outs of permissioned blockchains with businesses all over the world. One of the most interesting projects has been teaming up with Microsoft to build a blockchain solution that manages content royalties in the video game, music and content industries. This is a solution, built on Microsoft Azure, which will enable thousands of content creators to manage the incredible complex payment and copyright process. 

The system EY is building with Microsoft creates a distributed ledger system that allows instant access to all members, with consensus algorithms that validate each transaction. Smart contracts—which trigger payments when conditions are met—streamline and speed up payments. Finally, cryptographic security makes transactions immutably transparent and provides an unprecedented level of cyber-protection.

In sum, this solution is designed to reduce the complexity of an extremely complex environment by providing publishers and developers with a frictionless, transparent and scalable solution. What are the benefits?

• The solution provides privacy and confidentiality for all parties to the transactions
• It presents a real-time transparency that builds users’ trust in the data
• It streamlines contract setup and negotiations, and automates contract execution
• It empowers stakeholders to use the solution on their own terms, including self-service capabilities
• Finally, in an era of elevated cyber-risk, it provides a higher level of security by making transactions immutable and tamper-proof.  

 What’s the shape of blockchain to come?

Dozens of collaborative blockchain projects EY is currently working on are giving us early indicators of the future of blockchain. As we make this move from experiment to reality, I’m encouraged to make the following predictions for blockchain’s future:

1. Blockchain will deliver the value. The royalties project has already driven a significant revenue uptick, and reduced IT and data maintenance costs. Enough said.
2. The center of gravity will move from crypto-currencies to permissioned, business-based blockchains. 
3. Smart contracts will become an important digital lubricant in business processes – speeding up workflows, accelerating payments, and building trust between players.
4. Blockchain-as-a-Service (BaaS) offerings will accelerate and simplify adoption of blockchain services. These cloud-based solutions will lower costs and risks of entry while providing higher security.
5. BaaS networks will create a rich ecosystem of apps and solutions built on blockchain. 
6. The rise of the curator. Bitcoin networks are lauded for not requiring a central administrator to run the show. However, collaborative networks will require a “light hand” to manage consensus, enforce policies, and manage exceptions and disputes. The good news is that this curator model will be run at a fraction of the cost of current intermediaries.

The future is Blockchain, that is certainly true...how are you managing to shape your future?  How are you planning to leverage Blockchain?