An effort to transform how businesses work by using blockchain technology added new members from multiple industries as Toyota, Merck, State Street and other companies joined industry group the Enterprise Ethereum Alliance (EEA).
They join existing EEA members JPMorgan Chase & Co, BP, Microsoft, IBM and ING Groep that are all trying to determine if shared databases recorded on the ethereum blockchain can cut costs by speeding up financial transactions or ensuring the efficiency of a supply chain.
The reason ethereum is creating such interest among industries from finance to health care is because it allows for much more complex actions to be done in a shared and decentralised manner than with bitcoin, which introduced the first blockchain to the world in 2009.
The bitcoin blockchain is like a banking system that runs itself — but its main use is just to allow people to move the digital currency from one place to another.
Ethereum’s ledger does more. It stores fully functioning computer programs called smart contracts on its blockchain: if person A performs job B for company C, it will trigger a payment of D back to A and so on. Ethereum is a way for people to make agreements and automate enforcement, all on a distributed network of computers. Once you can create contracts — which are just operating procedures — you can use them to manage almost any kind of enterprise or organisation.
“The enthusiasm around EEA is remarkable,” Julio Faura, chairman of EEA and head of blockchain innovation at Banco Santander, said in a statement announcing the additions to the group. “Our new members come from varying industries such as pharma, mobile, banking, automotive, management consulting and hardware.”
Toyota, for example, is experimenting with ethereum to help it develop self-driving cars and other uses.
“Toyota Research Institute supports EEA and its members in promoting common standards and tools to accelerate the adoption of this technology and the potential benefits for Toyota’s customers,” Chris Ballinger, chief financial officer of the car company’s unit Toyota Research Institute, said in the statement.
John Hancock Financial is experimenting with a tailored version of ethereum to keep track of compliance with know-your-customer and anti-money-laundering regulations in its wealth management unit. European aircraft maker Airbus wants to know if its supply chain management can be shifted to a blockchain.
Our new members come from varying industries such as pharma, mobile, banking, automotive, management consulting and hardware
Merck, which says it’s the world’s oldest chemical and pharmaceutical company in the world dating back nearly 350 years, said its history isn’t stopping it from being innovative.
“Curiosity fuels business development and enables companies like ours to remain competitive,” Andreas Schindler, director of “ideation”, innovation and technology foresight for the company, said in the statement. “We are curious to co-create with the EEA on distributed ledger architectures and solutions for future digital markets in healthcare and life sciences.”
Adoption of blockchain technology such as ethereum has significant hurdles to overcome, such as convincing competitors to work together in a network that shares market information. There is also the fact that very few if any actual uses of blockchain have been released to date. Regulators also have to be convinced the system is safe.
And the EEA is far from alone in seeking an edge in creating standards for blockchain systems. Competitors include R3, Chain, Digital Asset Holdings and the Hyperledger Project. — (c) 2017 Bloomberg LP