Blockchain heralded the coming of Web 3.0, a follow-on to the intricacies of the World Wide Web. As it grew in popularity and adoption, there have been records of substantial investments in blockchain and its consequent asset classes like cryptocurrencies and NFTs. This surge of investments has not eluded big names in Hollywood. The likes of Shawn Mendes, Snoop Dogg, Floyd Mayweather, Jim Carrey, Paris Hilton, and Eminem are heavily invested in blockchain-powered asset classes.
The finance industry is arguably the biggest adopter of blockchain technology, with everyone from private financial companies, to central banks of entire countries, adapting their processes to integrate blockchain. But the possibilities that exist with blockchain make it adaptable to every industry.
Deepak Thapliyal is the CEO of Chain, a company dedicated to institutionalizing blockchain. “Blockchain is definitely the future of mainstream finance, but it has a lot more uses beyond monetary transactions,” says Thapliyal. “To get the best out of blockchain, we need to scale it down, not up.”
Hollywood’s data menace is costing the industry
From hacking unreleased content to extorting production finances, security breaches in Hollywood are more common than some may think. Big production studios and companies like Disney, Sony, and Netflix
One of the reasons for this is that Hollywood’s production houses love to outsource a lot of their work to vendors, fighting to provide them with top-quality results at competitively low prices. From crafting engaging and eye-catching trailers to top-of-the-line editing and 3D visual effects, work from Hollywood’s biggest studios is often the lifeblood of these vendors and a massive boost for their portfolios.
Thapliyal revealed that this steady exchange of sensitive information between the studios and vendors exposes huge cybersecurity loopholes, especially at the vendors’ end. “These third-party production outfits often don’t have network security measures as robust as the big studios, and hackers have figured this out, so they typically attack these vendors to get access to sensitive unreleased content and either release them on torrent sites or demand ransom from the studios. Either way hacks like this spell a colossal financial loss for the studios.”
The sentiment aligns with the hack of Disney and Netflix, in particular. Netflix’s Orange is the New Black, and Disney’s Pirates of the Caribbean sequel were both hacks that occurred at a post-production facility. Going back as far as the Sony Pictures hack in 2014, there have been numerous hacking attempts on major studios for years, and whether by ransom or unplanned releases, these companies are losing serious money.
“In entertainment, an unplanned early release of a movie or documentary could set opening weekend box office projections back by over $15 million. It is preventing situations like this that the blockchain was built for, and it’s what we’re trying to achieve also—a world of guaranteed data security across any given supply chain.” Thapliyal’s Chain has worked with heavyweights NASDAQ
Blockchain as a solution; only smaller
Blockchain technology uses a “strength in numbers” approach to security. Its decentralized ideology means that the records on the blockchain are immutable since the records of every transaction on the chain exist across hundreds of thousands of devices in a linked peer-to-peer network. The blockchain is anonymous, open-source, and permissionless, giving complete freedom to users to carry out their transactions safely and anonymously. But this also makes it possible for users to carry out nefarious activities on the network, just like Ransomware used Bitcoin
Thapliyal doesn’t believe that this iteration of the blockchain is a one-size-fits-all solution to safeguarding data and financial transactions. According to him, “Public blockchains like Ethereum
On the private blockchains there is no public access or public miners, and the users are not anonymous. “It may sound counterproductive that we’re championing the adoption of private blockchains, especially since on the surface it seems to stand against the foundational principles of security, privacy protection, and transparency,” Thapliyal admits, “but this isn’t the case.”
The major difference between a customized blockchain and public blockchains is the level of access. It’s important that companies and institutions always keep their sensitive company and client information safe, and leaving these to the mercy of a public blockchain doesn’t make much business sense.
“In any major business transaction, the identities of all the involved parties have to be known, the transaction has to be verified by a trusted and credible central authority and be trackable across the network. Of course, just like public blockchains, transaction records are also distributed across the blocks in the private network and can’t be manipulated by any party. When none of the parties are anonymous, it helps to build trust and foster strong partnerships. Different businesses operate by different policies and have varying client needs, so they each need a regulated blockchain developed to cater to these needs and adhere to their policies and ethos.”
There’s also the efficiency debate between private and public blockchains. Mining on a public blockchain is an extreme sport in terms of energy consumption. For example, one second is enough to complete only around seven Bitcoin transactions. The speed is caused by too many users initiating too many transactions on public blockchains. You only need to compare this with the transaction speed on private blockchains like Hyperledge and Ripple—they can process and validate thousands of transactions per second. The fees and energy costs on private blockchains are significantly less as well, allowing companies to create their own tokens and digital merch, carry out financial transactions, transfer sensitive documents and build out their own security parameters in ways that align with their best interests.
If the adoption of custom blockchains becomes a mainstream practice, beyond helping Hollywood curb its piracy and hacking problems, the economic benefits could be disruptive on a global scale.