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The head of innovation at Big Four audit firm Ernst & Young argued that blockchain disruptors should âgo back to first principles.â
83% of decentralized applications (DApps) on the Ethereum network are ânot in the most productive uses,â according to Ernst & Youngâs (EY) head of innovation.
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 Statesâ Securities and Exchange Commissionâs (SEC) on May 31.
The event was organized by the SECâs Strategic Hub for Innovation and Financial Technology (Finhub, which) launched in October 2018 to facilitate the commissionâs engagement in the fintech space, including distributed ledger technology (DLT) and digital assets, among others.
During the first panel of the forum, called âCapital Formation Considerations,â 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 âgo back to first principles,â to understand how this technology should be applied to bring solutions, as opposed to just âmoney chasingâ 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 ânot doing very wellâ in this regard, claiming that the most part of DApps on the Ethereum blockchain are âmaybe not in the most productive uses.â
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 âtremendous lasting legacy that is positive.â
In late 2018, Brody compared the initial coin offering industry with late 1990sâ internet startups, claiming that the space looked âworse than we thought.â Earlier today, Ernst & Young open sourced the code for its Ethereum private transactions solution called Nightfall.
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