While the internet is a world-changing medium for information exchange, blockchain is the first native digital medium for peer-to-peer value exchange. EY’s analysis of blockchain suggests it may have the most impactful potential of the entire portfolio of disruptive technologies that are now emerging. But it also has the most obstacles to success, ranging from technical to cultural.
The blockchain reaction will pull in different industries at different times with differing levels of disruption, bringing both opportunity and risk. Those risks include disruption to existing business models and operations, as well as new tax, legal and policy implications that can trip up corporate leaders and global policymakers.
The scope of a blockchain reaction, especially for tech companies, may require a sizable pivot. Understanding the nature of that pivot, and the tax, legal and policy questions it will raise, will take time and preparation.
Excerpts taken from new EY report, Blockchain reaction: Tech companies plan for critical mass.
Disruptive technologies interacting in unpredictable ways
New technologies are arriving on the scene at a far faster pace than ever before — creating a continuous cycle of innovation and disruption. In fact, blockchain is emerging as part of a portfolio of disruptive technologies, many of which are interacting — in unpredictable ways — and accelerating each other toward critical mass. These include artificial intelligence, virtual reality, robotic process automation, big data analytics, cloud computing, asset-sharing digital marketplaces (aka the sharing economy) and the internet of things (IoT). Blockchains have particular applicability to sharing economy and IoT models, both of which involve large numbers of collaborating peers.
Now is the time for tech companies to think proactively about their blockchain reactions. How will your business strategies, products and services look and behave in a blockchain-enabled world?
“With blockchain, the theory is you can much better document transactions and therefore avoid any crime connected with the possibility of hidden transactions,” says Richard Goold, EY’s Global Technology Law Leader.
Further, if every transaction is somehow documented, then fraud will be lowered. “The entire legal system as we know it might extinguish if blockchain can provide more efficient ways to manage the business relationship between individuals and companies,” says Peter Katko, EY’s Global Digital Law Leader.
EY Legal Services Contacts:
Richard Goold – Global Technology Law Leader
Peter Katko – Global Digital Law Leader