On June 22nd, Paul Brody, Global Innovation & Blockchain Technology Leader from Ernst & Young, one of the global audit “Big Four”, attended the WBF Blockchain Conference in Singapore and published “Deep Scalability: New Opportunities for the 2019 Blockchain 》. In his speech, he not only talked about Ernst & Young's observations on the blockchain industry and the predictions for the next few years, but also thought about what the roadmap should be for the blockchain company in the future, especially the company. The user's development prospects.
The following is a summary of the speech (slightly deleted):
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The current development of the blockchain is disappointing
"I think the blockchain is very disappointing so far. We have very high expectations for it, but the reality is not so good. The reality we see is that most of the blockchain applications are gambling and cryptocurrency applications. There are also some social media platforms, but not many useful industrial applications have emerged, but this is not surprising, as the Internet has been.
If we look at twenty-five years ago, when I graduated from college, people would say that the Internet is really too bad. We want to do something very incredible, but the reality is that some Internet sites only provide something that I don’t want to see. Information, rarely any commercial activity takes place on the Internet, the same history is now repeated in the blockchain world. ”
Blockchain will have four major changes
“In the beginning we saw that there are a lot of blockchain applications, they don’t seem to be very useful, and we don’t have many users financing in the financial industry, so how long will it take us to get to the Internet today, blockchain from one The evolution of casinos to industrial applications. Here we see four things to happen:
The first thing, I think is the most important, the way companies and companies think about using blockchain. At the beginning of the blockchain, people just want to mark, use the Internet to make a time tag, and then share the time tag with the file. Recorded, but the reality is that we need to trade these tokens, so the first job is to transform the enterprise blockchain users into digital tokens. This is not a PDF file, but a structural data. We want Protect this data and you can buy it to trade.
The second thing, from cryptocurrency to legal currency , is not that the currency will disappear, because we know that for a long time, whether it is the stable currency launched by Facebook or the cryptocurrency that is aligned with the US dollar, once we can use the currency When trading, it is not that they like French currency. If we use US dollars to get a salary and then pay in cryptocurrency, we can see that the currency in which the French currency is traded and used in the public blockchain is the most important medium.
The third thing, we have to move towards the standardization of supervision. If we want corporate users to participate, we must achieve regulatory standardization. We need to make sure that they don't go to jail because these CEOs go to the prison to do everything. No.
The fourth thing is the transfer from the private blockchain to the public blockchain . If we look at these financial technology and financial regulatory technology companies, everyone likes the public chain, such as Ethereum, but for business users, no one is using the public chain for blockchain applications, no one is like this. The reason is that they don't have the ability to do private transactions on the public network, such as Wal-Mart, or Alibaba, SingTel, they publish something to show people, what you bought, how much it cost, this is privacy The right, can't be like this. So this is the four things that will happen, what must be done to make the blockchain complete such a commitment. ”
99% of cryptocurrencies face compliance issues
We also overlooked some things, such as trading extensibility, which is a topic that everyone likes. You will say that we have a very good blockchain that can trade millions in a second, but I said that I don't care at all, you One thing to remember is that an ordinary business does not calculate business in seconds. They calculate business in days. Most companies pay 30 days for payment bills, so 1500 transactions per second may not be as fast. As a transaction, our company's users do not need it.
Everyone is very interested in trading scalability, there are also many technologies, like Sharding and other technologies, but these are not the biggest problems. These blockchain exchanges have not done KYC today, but if the transaction volume changes rapidly, You will see that 80% of transactions have a corresponding KYC, not 100%, but they are increasing rapidly.
After two years, 99% of cryptocurrency transactions will have KYC compliance issues. Therefore, the scalability at this time is not a problem. The problem is the private nature of the transaction. If there is no way to have a private transaction in the contract, you will not have investors and these enterprise users. At the same time, what we are paying attention to in Ernst & Young is to To privatize these transactions, providing all the tools, requires a secure, compliant, and fully legal blockchain-based transaction. If you know ZCASH's Zero Knowledge Proof Technology (ZKP), Ernst & Young as the first company last year, fully realized zero-knowledge, zero-information, and completely private security transactions. Six months to nine months ago, I made such a deal. Earlier this year, five months ago, we launched the second-generation ZKP technology, which is used on the iPhone. Now it can do secure private transactions in the public blockchain. On the Internet, you only need five to eight dollars to complete such a transaction. We believe that this meaning is a public blockchain, and the public blockchain is a very good choice for companies.
Integrating business processes into one, there is still a lot of work to be done between the capital market and the operating companies, but in the short term, the return on investment mainly comes from removing the obstacles in the process. What is the specific meaning? As a trading company, my money is used to buy your goods, mainly through smart contracts. From a material point of view, if we look at traditional business processes, operations can be completely complicated by blockchain removal. If you look at such a business process, which one is the most costly, it is not a check or a payment notice. The most complicated thing here is to ensure that the check is cashed and matches your payment notice. In line with the signed contract, this is a lot of companies spend a lot of cost to do internal matching. If you use blockchain technology, the cost can be greatly reduced. For example, Ernst & Young purchased Microsoft products, and we reduced the matching time by 99.9% through this project. , shortened the time by 99%, and the cost was greatly reduced, and the transparency was also improved. If the blockchain is well deployed, it can bring great value to the business. The key issue here is how to find value points. Now many companies have started to use these technologies. Our relationship with Microsoft is very good. In addition, we have many business partners, such as investment companies, including supermarkets, medical groups, wine cellars, etc. From a market perspective, we are just just beginning. Now that we are in the era of professional application opening, we need to find more use cases, and soon, more companies will join. We hope that in the future, like the Internet, the blockchain will become a basic resource technology for global business operations. Everyone will use the blockchain, which is our view in the future. Blockchain will become a universal tool like the Internet. Of course, this process takes a certain amount of time and may take ten years.
By 2030, blockchain 5 big predictions
I can make five bold predictions here. By 2030, eleven years later, the public Ethereum will be the only largest platform. I think the blockchain is different from other technological transformations. It is more like the Internet. There are no 25 Internet in the world, the same Internet is used all over the world, and the blockchain is the same. Most new corporate contracts will be done on the public blockchain, which will become a standard practice.
The third forecast is that business-to-business payments and asset transfers are all done on the public blockchain. Most blockchain transactions are denominated in currency instead of cryptocurrency. The blockchain is mainly a B2B technology. There may be some B2C applications between a small number of consumers. Consumers may use it sometimes, but they don't care what the technology behind it is.
Finally, I believe that technology will shock the physical world, blockchain will not develop in an isolated environment, any previous information technology, any transformation is to follow this law. For example, the occurrence of the telegraph, behind this is because of the popularity of the railway, because the signal line is needed, and after the railway, the train should avoid collision and invent the signal technology. IBM's mainframe was invented at that time because it had to read the electricity meter, the hotel's reservation system, the banking system, and the ticket ordering system, which enabled the operation and large computing power of large enterprises to be invested and developed. The blockchain will also be our industrial foundation. The facilities have brought about tremendous changes. I can hardly say what kind of form it is now, but I know that every wave of information technology in the past is closely integrated with the industrial environment. I don’t think the blockchain will be an exception. .