GRIT Ed. 11 | 5G, Web3, NFTs... - Magazine - Page 29
Sponsored Content
Abhishek Sinha on Blockchain, Web3,
Decentralization, & Regulatory Challenges
PARTNER, EY
Blockchain, 5G, metaverse and Web3
are all unique advancements, but they
should not be addressed in silos. Each will
complement and ultimately converge
to drive substantial change. Two quickly
evolving streams are blockchain and the
evolution of Web3.
The power of blockchain
to deliver more efficient,
transparent business models
Blockchain is among the most exciting,
yet polarizing topics in the emerging
technologies spectrum. Regardless of
your position, business models can
become more efficient in fulfilling their
value proposition when re-framed
through the power of blockchain.
Whether through tokenization, smart
contracts or decentralization, enterprise
blockchain solutions have truly disruptive
capabilities that can help to reimagine
almost every entrenched business model
in a completely new way.
The first blockchain use case was a
cryptocurrency, Bitcoin. The evolution of
Bitcoin from an anarchist revolt born in
the ashes of the 2007-08 financial crisis
to be the preferred currency for illicit
transactions to now being a legitimate
asset class sitting on the balance sheets
of blue-chip companies is a phenomenal
story. Along the way, it has spawned
many innovations, including security
tokens, other crypto coins, utility tokens
and stablecoins — each aiming to
radically redefine the problem statement
and deliver solutions to our economic
framework.
More broadly, enterprise blockchain
solutions are helping to address some of
the most complex issues facing society.
Recent examples include a beer company
enhancing the transparency of their
supply chains by demonstrating where
and how quality ingredients are ethically
sourced; or the International Fund for
Agricultural Development minimizing
poverty and hunger by tracing data to
reduce waste by making production
more efficient.
The opportunities are endless when
it comes to applying blockchain
technology to solve real-world challenges
where a network of participants needs
to work together to achieve a set of
outcomes. From a Canadian perspective,
opportunities exist in the enterprise
blockchain space and the crypto world.
But, as with other emerging technologies
and business models, there are a few
challenges to overcome.
Firstly, we need to address the complexity
of the technology. While crypto has been
running fast, quickly capturing people’s
imaginations, few truly understand what
it is and how it works. In its simplest form,
we must consider enterprise blockchain
as an infrastructure layer on top of which
we build business applications. Just like
how the internet is invisible — which
most people will struggle to explain the
technical underpinnings of — blockchain
is also invisible, and the emphasis must
be to build compelling business models
that focus on jobs to be done. The second
key element is regulation. We need
regulatory action to provide a compliant,
risk-managed space for innovators.
Harnessing the intersection
between blockchain and
Web3
A powerful mix of innovative
technologies — such as machine
learning, big data, AI, IoT and (you
guessed it) blockchain — are converging
to give birth to a new iteration of the
internet, known as Web3, which promises
to decentralize and disintermediate the
current Web2 internet. In turn, Web3 will
make creating a shared, persistent and
three-dimensional virtual world for users
easier. What’s blockchain’s role in all of
this? It’s the basis for Web3. Blockchain
builds the infrastructure of Web3 by
allowing organizations to decentralize
Web2 services.
Web3 can potentially make the internet
more efficient, intelligent and immersive.
It can also offer new and innovative
business and operating models that
nearly any industry can use.
But similar challenges regarding
education and regulation will need to
be addressed to reach its full potential.
Laws must be updated to recognize
smart contracts and tokenization as
accurate and valid business constructs.
To make this a reality, lawmakers
must work alongside businesses and
technology leaders to learn about these
new technology developments and the
impact they can bring to Canadians.
We’ll need collaboration between all
stakeholders to ensure Canada is an
innovation leader worldwide. We will
only be able to harness the full potential
of Web3 once these significant barriers
are overcome.
Companies shouldn’t wait for all this to
come to fruition. This kind of activity will
be commonplace, and the time is now to
embrace it, understand the fundamentals
and make sense of the implications of
living and transacting in this new and
exciting space. The time to develop new
value propositions and identify unserved
or underserved market segments is now.
Could you take advantage of it?
To learn more about
EY’s service offerings in
technology consulting,
please visit ey.com/en_
ca/technology
SPRING 2023
29