This document summarizes a blockchain summit hosted by EY. It discusses public versus private blockchains, considerations for implementing blockchain technology, and different blockchain platforms. Key topics covered include the scalability and governance challenges of public blockchains like Bitcoin, smart contract security issues on Ethereum, and how permissioned blockchains may be better suited for enterprise use cases. The document also provides an overview of the different consensus algorithms and blockchain clients that are available.

1. EY Global Blockchain
Summit
San Francisco, CA
April 26, 2017

2. Page 1 EY Global Blockchain Summit
Public, private and hybrid blockchains: what makes sense
where?

3. Page 2 EY Global Blockchain Summit
Blockchain: going public about it

4. Page 3 EY Global Blockchain Summit
Bitcoin, why would you even get involved with that?
► October 2013: FBI closed Silk Road, seized bitcoins worth approximately $3.6m
► February 2014: Bitcoin’s main exchange went bankrupt after being hacked, $600m worth of
bitcoins
► Validation time can be considerable when fees are miscalibrated
► Difficult to scale: 200,000 transactions per day
► Mining centralized in China
► Intense controversy in the development community, stalemate about the future of the protocol,
cf. “block-size debate”

5. Page 4 EY Global Blockchain Summit
Bitcoin is a tremendous tool for sending large amounts of
money.
► Transactions move the asset itself,
there are no IOUs, no third party and
no regulatory authority.
► The ledger is fast to read, secure and
temper proof.
► Since 2009, bitcoin is still public, has
no central authority, had experienced
no downtime and no hack exploiting the
core protocol.
► To get a glimpse, search bitcoin block
380943:
► $47.5m in a single transaction for
a fee of 12 cents
► Confirmed in 10 minutes
Source: http://www.louvre.fr/
Source: http://bitcoin.i-rme.es/img/Bitcoin%20Logo%204096%20PNG%20Forocoches%20(RME).png

6. Page 5 EY Global Blockchain Summit
Ethereum: blockchain as a general-purpose and distributed
computer
► Smart contracts: software living inside
the blockchain
► 20,000 developers, cloud offerings from
Alibaba, Microsoft Azure, Red Hat
OpenShift, Pivotal Cloud Foundry
► Huge security setback in June 2016 as
The DAO loses $50m embezzled by a
hacker and refunded by forking the
chain
► Focus on security
► Clearer scaling perspectives and add-
ons for decentralized cloud storage and
computing, Internet of Things
Source: https://www.ethereum.org/

7. Page 6 EY Global Blockchain Summit
What did we learn so far?
► “It’s been a tough two years for public blockchains.”
Angus Champion de Crespigny, EY Americas Blockchain Strategy Leader for
Financial Services
► Smart contracts need their own best coding practices.
► Private environments look more comfortable and
familiar, similar to the 1990s with the discussions
around the internet vs. the intranet
► OK to go online but not OK to go public
► Radical changes happen faster in open environment
► Blockchain technology is counterintuitive and has
steep learning curves.
► “You don’t need a blockchain for that.”
► Experimenting brings high rewards and valuable
skills.
Source: https:qph.ec.quoracdn.net/main-qimg-
794d92aeb2318c6d1993057397a613a1?convert_to_webp=true

8. Page 7 EY Global Blockchain Summit
Blockchain: bespoke or one size fits most?

9. Page 8 EY Global Blockchain Summit
Miscellaneous considerations
► Blockchains rely on a subtle equilibrium between
game theory, computer network and cryptography.
► Blockchains are both a network of peers, a shared
ledger and a shared token. Taking out the latter is
nontrivial because it is a powerful means of aligning
the incentives.
► For tryouts, see Hyperledger decentralized ledger
technology
► The main benefit of a blockchain is providing trustless
and governance-less reconciliation between multiple
nodes.
► Governance moves (i.e., forks) hard to perform, even
with a governance committee
► Central authority performs better if need to intervene
often
Network Ledger
Tokens
Blockchain
tri-force

10. Page 9 EY Global Blockchain Summit
Metrics to consider
► Metcalfe’s law + peer’s heterogeneity = the blockchain golden rule:
► The more peers you have, the more diverse they are, the more useful your blockchain
► Heterogeneity in terms of objectives, expected behavior, allegiance, downtime
Too bad that bringing consensus among numerous nodes comes with scalability limitations.
Who can write in the ledger? How fast? How much payload?
How many
replications of
the ledger?
Who can
modify the
ledger?
Traditional
public blockchain
Traditional
database
Permissioned
public blockchain
Permissioned
private blockchain
Many
One Owner group
Anyone Anyone
Trusted users
Who maintains
the integrity of
the ledger?

11. Page 10 EY Global Blockchain Summit
What technologies are available?
► 700+ different cryptocurrencies with their own consensus algorithm derived from proof of work,
proof of stake, proof of activity, proof of burn, proof of capacity, proof of elapsed time
► “Pluggable consensus” is a chimera, the consensus’s constrains spread all over the protocol
► Few clients have been tested and hardened at large scale
► If you need smart contracts, consider bitcoin and its derivatives: BTCsuite, Bitcoin Core,
Bitcoin Unlimited, Zcash for privacy
► If you don’t need for smart contracts, consider Ethereum and its derivatives:
► Parity (3000tx/s) with Proof-of-Authority Round and TendermintBFT
► Quorum by JP Morgan (2000tx/s) with transaction and contract privacy and Raft Consensus

12. Page 11 EY Global Blockchain Summit
Key contact
Jerome De Tychey
Blockchain Technology Leader EY Paris Lab,
Ernst & Young Advisory
+33 1 46 93 81 87
jerome.de.tychey@fr.ey.com

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