An effort to transform how businesses work by using blockchain technology added new members from multiple industries as Toyota Motor Corp., Merck KGaA, State Street Corp. and other companies joined industry group the Enterprise Ethereum Alliance.
They join existing EEA members JPMorgan Chase & Co., BP LP, Microsoft Corp., International Business Machines Corp. and ING Groep NV 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 decentralized 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 organization.
Toyota, for example, is experimenting with ethereum to help it develop self-driving cars and other uses.
"Toyota Research Institute supports the Enterprise Ethereum Alliance 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.
“The enthusiasm around EEA is remarkable," Julio Faura, chairman of EEA and head of blockchain innovation at Banco Santander SA, said when announcing the additions to the group. "Our new members come from varying industries such as pharma, mobile, banking, automotive, management consulting, and hardware.”
European aircraft maker Airbus SE wants to know if its supply chain management can be shifted to a blockchain.
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 ideation, innovation and technology foresight for the company, said in the statement. "We are curious to co-create with the Enterprise Ethereum Alliance on distributed ledger architectures and solutions for future digital markets in health care 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.
By Matthew Leising