Ernst & Young Exec: Most Ethereum Decentralized Apps Not Used Productively
The head of innovation at Big Four audit firm Ernst & Young argued that blockchain disruptors should “go back to first principles.”
Paul Brody, Global Innovation Leader for blockchain at Big Four audit firm EY, spoke about developments in the blockchain and digital asset industries during a Fintech Forum hosted by the United States’ Securities and Exchange Commission’s (SEC) on May 31.
The event was organized by the SEC’s Strategic Hub for Innovation and Financial Technology (Finhub, which) launched in October 2018 to facilitate the commission’s engagement in the fintech space, including distributed ledger technology (DLT) and digital assets, among others.
During the first panel of the forum, called “Capital Formation Considerations,” Brody outlined a major issue regarding the implementation of blockchain technology.
Brody said that, in order to make blockchain technology successful, global crypto disruptors should “go back to first principles,” to understand how this technology should be applied to bring solutions, as opposed to just “money chasing” in the digital environment.
As such, Brody pointed out that the purpose of capital markets is to take money from investors and to put it into productive use. Brody hinted that crypto space is “not doing very well” in this regard, claiming that the most part of DApps on the Ethereum blockchain are “maybe not in the most productive uses.”
Brody cited data from the Q1 2019 report by blockchain analytics firm DApp.com. The expert noted that 14% of Ethereum-based DApps are used at crypto exchanges, while most of them are used for gambling and gaming, accounting for 44% and 13% of DApps, respectively.
Brody argued that the technology implementations should focus on more productive applications like distributed computing, fractional real estate, new business models, and fractional infrastructure instead. According to the expert, such a strategy will contribute to a “tremendous lasting legacy that is positive.”
In late 2018, Brody compared the initial coin offering industry with late 1990s’ internet startups, claiming that the space looked “worse than we thought.” Earlier today, Ernst & Young open sourced the code for its Ethereum private transactions solution called Nightfall.
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