Should Hollywood have its own blockchain?

Blockchain heralded the advent of Web 3.0, a follow-up to the intricacies of the World Wide Web. As it grew in popularity and adoption, there have been records of significant investment in blockchain and its subsequent asset classes such as cryptocurrencies and NFTs. This wave of investment has not escaped 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 financial services industry is arguably the largest user of blockchain technology, with everyone from private finance companies to central banks across countries adapting their processes to integrate blockchain. But the possibilities that exist with blockchain make it adaptable to any 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 many 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 threat is costing the industry

From hacking unreleased content to extorting production finances, security breaches in Hollywood are more common than one might think. Major production studios and companies such as Disney, Sony and NetflixNFLX
have been on the wrong side of these intrusions before, and the problem doesn’t seem to be abating.

One of the reasons for this is that Hollywood production houses love to outsource much of their work to suppliers, and struggle to provide them with top quality results at competitively low prices. From creating engaging and eye-catching trailers to top-notch editing and 3D visual effects, work from Hollywood’s biggest studios is often the lifeblood of these providers and a huge boost to their portfolios.

Thapliyal revealed that this regular exchange of sensitive information between the studios and suppliers exposes huge cyber security holes, especially at the suppliers’ 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 providers to gain access to sensitive unreleased content and either release it onto torrent sites or demand ransom from the studios. Either way, hacks like this mean a colossal financial loss for the studios.”

The sentiment is consistent with the hack of Disney and Netflix, in particular. Netflix’s Orange is the new black, and Disney’s Pirates of the Caribbean the sequel were both hacks that happened at a post-production facility. Going back as far as the Sony Pictures hack in 2014, there have been many hacking attempts at major studios over the years, and whether it’s by ransom or unplanned releases, these companies lose big money.

“In entertainment, an unscheduled early release of a movie or documentary can set back the opening weekend box office by over $15 million. It prevents situations like this that blockchain was built for, and that’s also what we’re trying to achieve – a world of guaranteed data security across any given supply chain.” Thapliyal’s Chain has worked with heavyweights NASDAQNDAQ
Tiffany & Co., Citibank and other brands across retail, banking, sports and entertainment to create fully customizable blockchain solutions to suit their particular needs.

Blockchain as a solution; just less

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 for each transaction in the chain exist across hundreds of thousands of devices in a connected peer-to-peer network. The blockchain is anonymous, open source and permissionless, giving users complete freedom to conduct their transactions safely and anonymously. But this also enables users to perform malicious activities on the network, just as Ransomware used BitcoinBTC
to collect ransom from the victims.

Thapliyal does not believe that this iteration of the blockchain is a one-size-fits-all solution for securing data and financial transactions. According to him, “Public blockchains like EthereumETH
and Bitcoin are fine for daily personal use and individuals trading cryptocurrencies and NFTs, but companies and industries need something more exclusive with a comfortable level of access control. We look beyond the main line of blockchain operations. Without reinventing the core of how blockchain works, we’ve created a set of tools that allow us to duplicate the framework and niche it down so that it makes sense for unique businesses on a case-by-case basis.”

On the private blockchains, there is no public access or public miners, and users are not anonymous. “It may sound counterproductive that we are championing the adoption of private blockchains, especially since on the surface it appears to be against the basic principles of security, privacy and transparency,” Thapliyal admits, “but this is not the case.”

The biggest difference between a custom blockchain and public blockchains is the level of access. It is important that companies and institutions always keep their sensitive company and client information safe, and leaving this at the mercy of a public blockchain does not make much business sense.

“In any major business transaction, the identity of all parties involved must be known, the transaction must be verified by a trusted and credible central authority and be traceable across the network. Of course, just like public blockchains, transaction records are also distributed across the blocks of the private network and cannot be manipulated by any party. When neither party is anonymous, it helps build trust and create strong partnerships. Different businesses operate under different policies and have varying customer needs, so they each need a regulated blockchain designed to meet those needs and adhere to their policies and ethos.”

There is 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 about seven Bitcoin transactions. The speed is caused by too many users starting too many transactions on public blockchains. You only need to compare this to the transaction speed of private blockchains such as Hyperledge and Ripple – they can process and validate thousands of transactions per second. The fees and energy costs on private blockchains are also significantly lower, allowing businesses to create their own tokens and digital goods, conduct financial transactions, transfer sensitive documents, and build out their own security parameters in ways that align with their best interests.

If the use of custom blockchains becomes a common practice, beyond helping Hollywood mitigate its piracy and hacking problems, the economic benefits could be disruptive on a global scale.