Blockchain-based technology has the enormous power to scale rapidly while keeping us protected. It rewards trust and tracks accountability. In a digital world that has become so distributed, blockchain could revolutionise business practices as we know them.
Imagine a world in which it is possible to transfer assets, eliminate contractual disputes and where trust is established between two parties without the need for an intermediary — all on the internet. Securely. Confidently. With built-in accountability. All this can be realised through blockchain.
Blockchain has its origins in Bitcoin and is widely used in crypto-currencies. It is a relatively new and advancing technology, and is finding its way into many non-financial uses and applications. The core principles of the technology mean that its potential is endless.
We realise how blockchain will be pivotal in revolutionising not only Financial Services but also Capital Markets, Insurance, Government, Health, Education and a host of other consumer services.
While the Internet has created environments in which individuals and businesses can instantly share information on a global scale at minimal or no cost, the same cannot be said for payments, which can take days to settle and often impose high transaction costs. This is because the fragmented, legacy infrastructure providing the rails for payments is not equipped to handle the class of instant, low cost services that has become an expectation in the digital age.
The emergence of cryptocurrencies and blockchain technology provides financial institutions with the potential to address these challenges by replacing infrastructure based on the correspondent banking model with a shared, digital ledger layer in which messages and payments can be posted and reconciled in near real-time across a distributed network that does not rely on costly intermediaries, and is secured through a combination of network consensus and cryptography.
Stemming from the capabilities afforded by the distributed nature and security mechanisms associated with blockchain technology, smart contracts have emerged as an area in which blockchain networks can be utilised to record and execute contractual agreements directly between parties to the agreement.
At the most basic level, smart contracts can be described as a vehicle that combines the ability to specify and record the obligations of contractual agreements in a shared, digital record with sets of protocols that automatically execute actions related to these agreements based on the validity of inputs submitted by parties to the contract. This allows parties to agree or this leads parties to an agreement to objectively verify and execute contractual obligations, and provides greater transparency, lower risks, and lower costs for contracts associated with a plethora of use cases.
Smart Credentials is a platform that harnesses blockchain technology – a secure and tamper-proof digital ledger that allows users to store, share and verify professional qualifications in real time. It will transform the on-boarding experience, giving owners greater control of their credentials, as well as giving issuers and reviewers more confidence, increased efficiency and cost savings.
PwC have partnered with ICAS to launch the first product that leverages the Smart Credentials platform. ICAS will issue certificates of registrations digitally using the platform from January 2019.
As organisations progress blockchain initiatives towards production readiness, they require a structured framework to ensure that technology implementations are robust and resilient. This is because while a blockchain protocol may itself be secure, various integration points, human interfaces and network design may expose critical vulnerabilities.
PwC’s Blockchain Go Live Assurance offering provides organisations with a customised risk assessment program for identifying threats and risks associated with a specific implementation. The output of the program is a detailed cyber security, IT resilience, data and controls assessment, an accompanying controls framework and testing strategy, and a report outlining test results and recommendations.
Heightened risks, multiplying pain points and reduced accountability have resulted from increasing complexity and opaqueness of the supply chain. The public are becoming more aware of these weaknesses and there is an upward demand for transparency in what they are purchasing and consuming to bridge this trust gap.
Through the use of blockchain, the supply chain journey could become more streamlined, accurate, audited and secure. At every stage of the process, barcodes could be scanned and recorded onto a blockchain ledger system, meaning the product could be tracked from creation to customer. This would be visible to all authorised parties in real-time and the information could be trusted as the data would be immutable.
We believe in a supply chain that offers better visibility, better efficiency, reduced fraud and more importantly, a safer and more reliable service for all involved.
Proving your identity online is difficult and there is currently little transparency about how the information you provide to identify yourself is used. Hence, there is a strong demand for verified, trusted and immutable identities.
Blockchain has the capability to overcome the challenges of digital identity as it was designed to enable transactions between unknown actors. Each participant’s transactions are added to the blockchain with other participants maintaining and verifying their legitimacy, enhancing security, fraud detection and trust in the individual’s digital identity. In addition, the decentralisation of control and ownership of identity attributes removes the need for intermediaries, giving individuals more control and ownership over their digital identity.
We believe in a digital identity that can be trusted, secure and empowers individuals to have more control over how their information is used.
To reach a production phase DLT projects need to face both new and traditional security challenges. With the rate of change of technology accelerating at an unprecedented rate, cyber security is becoming increasingly complex, with security risks regarding the confidentiality, security, and availability of services and data.
Consensus ensures that tampering on a blockchain is obvious. Participants could trust that the information they are seeing is accurate as blockchain provides an immutable audit trail and transactions are time and date stamped. It is also resilient, providing no single point of failure, storing information securely, through data encryption, with permissioned blockchains only giving access to authorised individuals.
Despite Blockchain’s obvious merits regarding security, at PwC we realise that we must adhere to good practice and procedures to avoid issues regarding key management, smart contracts, privacy, architectural security, governance and consensus hijacking.
The most exciting thing about blockchain is that its true potential is still unknown. At PwC we have the knowledge and development capabilities to identify how blockchain can benefit your organization.
We develop a strategy, separating hype from reality. We can help you understand if and how blockchain will impact your business.
We use design thinking to develop use cases, examine process mapping and make product decisions.
Our dedicated Product Engineering team have the know how to turn an idea into reality with proof of concept and full-scale blockchain implementation.
Work with the PwC Blockchain Team to unlock the potential of your business.
If you can answer yes to four of the following questions, blockchain could be an effective solution.
multiple participants need views of common information
multiple participants take actions that need to be recorded and change the data
participants need to trust that the actions that are recorded are valid
removal of intermediaries can reduce cost and complexity
reducing delay has business benefit
Transactions created by different participants depend on each other
Director, Blockchain, PwC United Kingdom
Tel: +44 (0)7843 332944