In March of 2017, a number of large corporations, including Accenture, Intel, Microsoft, JP Morgan, startups and research groups announced the creation of the Enterprise Ethereum Alliance or EEA. EEA had 30 cofounding members. In just two short months, by May of 2017, the number of members grew to over 110 organizations. By July of 2017 the alliance had over 150 members, including MasterCard and Cisco.
The goal of EEA is to develop open-source standards and private versions of Ethereum-based blockchain networks that organizations could use to solve various issues in the fields of banking, management, health, transportation, entertainment and other industries. Some members of the alliance also expressed interest in the creation of hybrid architectures that would like private and public blockchain networks, although currently for large organizations concerns about security, compliance and privacy outweigh the benefit of blockchain.
Accenture report about blockchain technology in investment banking
In January of 2017, Accenture published a report in which it stated that blockchain technology could reduce operation costs in the infrastructure of the investment banks by 30%, which means that the technology could save the industry somewhere between $8 and $12 billion dollars a year. The report was called “Banking on Blockchain: A Value Analysis for Investment Banks.” The report analyzed data from eight large investment banks provided to Accenture by McLagan, a top performance benchmarking organization. Accenture then applied its model for high-performing investment banks to show exactly where and how the banks could improve their operations using blockchain technology.
Today, investment banks run and maintain their own databases of transactions, reference information and sensitive customer data. For a transaction to become a part of such a database, an investment bank needs to reconcile the transaction and confirm it with a number of partners and clients. This process is lengthy, complex, labor-intensive and prone to errors.
Blockchain technology offers a number of benefits that can make the process simpler, cheaper and faster.
Accenture claims that blockchain could save banks about 70% of what the banks are currently spending on finance reporting, up to 50% in compliance costs at the product level, up to 50% by using blockchain during client onboarding and up to 50% by reducing the need for reconciliation and confirmations in business operations.
Corporate blockchain vision and examples
Members of the EEA want to create private versions of the Ethereum networks that have specific functionality and that would be available only to certified members. For example, banks could have blockchain software that improves their operations and transport companies could have a version of blockchain software for their industry.
While it is likely that some of the blockchains would still use Ether, many corporations are trying to figure out how to create blockchain networks that can use individual elements of the Ethereum as they wish. Many of the members of the alliance have already started working on blockchain-related projects.
For example, JPMorgan created its own version of the Ethereum network. JPMorgan called it Quorum. The bank has been using Quorum to test moving money between various branches of the bank located in different countries.
The alliance is planning to make Quorum a part of its version of the Ethereum network.
Hyperledger Project is an umbrella name for a number of blockchain-related open-source software projects created in December of 2015 by the Linux Foundation. The goal of the project is to provide support to collaborative development of blockchain applications. The focus of the project is on performance and reliability of blockchain-based systems so that the systems could support the operations of some of the largest corporations in the world.
Developers have created a number of platforms as a part of the Hyperledger Project. For example, Hyperledger Burrow is a blockchain-based client that uses a version of the Ethereum Virtual Machine. Hyperledger Fabric is a permission-based blockchain network that can execute smart contracts and has options for membership services and configurable consensus during contract execution. Hyperledger Sawtooth was developed by Intel and implemented the concept of “Proof of Elapsed Time” into the network. Proof of Elapsed Time is a lottery-based consensus protocol.