- Multimillion-dollar investment in EY Blockchain Analyzer delivers new upgrades for blockchain and cryptocurrency audit and tax services
- EY launches smart contract testing service for blockchain clients
- Zero-knowledge proof blockchain transaction technology to the public domain to advance blockchain privacy standards was released by EY
EY introduced a set of three analytical tools for the blockchain technology. EY announced the launch of the second generation of EY Blockchain Analyzer, a blockchain analytics tool, EY Smart Contract Analyzer, a smart contract testing and security service for the public Ethereum blockchain, and the EY Smart Contract testing service will be integrated into EY Blockchain Analyzer.
Over the past two years, EY Blockchain Analyzer has undergone significant developments as part of a multimillion-dollar investment and is expected to be available for use by EY client-serving teams in 2019 across a selection of more than 100 EY Assurance clients that hold or trade cryptocurrencies or operate in the blockchain ecosystem. These developments include the support of multiple new cryptocurrencies on the platform, added functionality relevant to private and public blockchains, and a globally accessible and available platform.
The first generation of the EY Blockchain Analyzer was designed to facilitate EY audit teams in gathering an organizations entire transaction data from multiple blockchain ledgers, to reconcile that data to EY client books and records and to perform enhanced analytics, including trend analysis and identification of outliers.
Through this major upgrade, a version of this second generation EY Blockchain Analyzer is available for EY teams and non-audit clients as a business application that is accessible anytime and helps enable financial reporting, forensic investigations, transaction monitoring and tax calculations, to support EY teams and clients globally across Advisory, Tax and Transaction Advisory Services.
“EY Blockchain Analyzer is becoming a viable, robust platform suited to a variety of purposes depending on specific client requirements, be it auditing, taxation, or transaction tracking. From the start, technologists and auditors have worked together to develop the initiative and the technology used to meet the requirements of audit methodologies. And we have successfully ensured compliance with relevant professional standards,” says Lukáš Mikeska, EY Senior Manager and Coordinator of Blockchain Initiatives for the Czech Republic.
The latest version of EY Blockchain Analyzer being showcased at the EY Global Blockchain Summit supports analysis of zero-knowledge proof (ZKP) private transactions on the public Ethereum blockchain, as well as the Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic and Litecoin public blockchains. EY Blockchain Analyzer also supports private Ethereum, Quorum and Hyperledger blockchains.
EY announced the launch of EY Smart Contract Analyzer, a smart contract testing and security service for the public Ethereum blockchain. The service, now entering a private beta test, will allow users to monitor smart contracts and tokens for known security risks. As companies and investors increasingly turn to blockchain-based tokens and assets, it is becoming crucial to understand the risks involved.
Investors in digital tokens face unique risks because both tokens and contracts are software designed to represent certain business and legal commitments. “Research carried out under the auspices of EY has shown that in the past, digital tokens might not always have accurately reflected statements contained in prospectuses or documents for potential buyers, and the updating of the relevant terms has not been entirely in line with principles common in the investment world,” says Lukáš Mikeska.
The EY Smart Contract Analyzer is designed to test and monitor tokens and contracts both prior to their release and once available on public blockchains. EY has developed a list of more than 250 standard tests that cover aspects ranging from known malware and coding errors to standard tests that confirm for investors that tokens are behaving according to accepted industry standards.
“Our clients are increasingly entrusting key business processes and valuable investments to software code. Just as enterprise computing relies on antivirus programs, appropriate security measures and smart contracts should be employed in blockchain investment systems and tokens should be properly verified,” says Lukáš Mikeska.
In addition to monitoring tokens and contracts for expected performance, EY has developed patent-pending simulation software that allows organizations to test token behavior against likely transaction scenarios using real data from the public Ethereum blockchain.
“It’s not enough to test static code. We need to see how contracts and tokens work under actual transaction conditions. Simulation enables a number of scenarios in the authentic blockchain Ethereum environment to be tested without the need to interfere in its operation. This includes all kinds of standard activities, such as code updates, transaction refusal policies or a variety of traffic restrictions,” adds Lukáš Mikeska.
The EY Smart Contract testing service will be integrated into EY Blockchain Analyzer, the organization’s blockchain analytics, tax and monitoring platform later in 2019 for general availability.
EY announced that it will release its zero-knowledge proof (ZKP) private transaction protocol into the public domain to help accelerate the adoption of secure, private transactions over public blockchains. For most enterprises and investors, the inability to conduct secure private transactions has been a major obstacle to fully embracing public blockchain networks.
EY unveiled this first-of-its-kind technology in October 2018 at Ethereum Devcon in Prague. The initial prototype was a version of EY Ops Chain, an EY flagship blockchain business application platform adapted for use on the public Ethereum blockchain. The prototype included a sample supply chain model built in the public Ethereum network using the private transaction technology and a challenge to developers and hackers to find flaws in the encryption and unmask the private information. Since the original solution debut, EY teams have worked to improve performance of the solution based on ZKPs.
Since the launch of the initial prototype last year, EY teams have significantly reduced transaction processing costs for users of the initial prototype by more than 90%, utilizing a combination of better data encoding and a more efficient ZKP protocol.
“Ensuring the security and scalability of public blockchain networks is our priority. The fastest way to effectively disseminate a given security mechanism is to release it for public use. We will only achieve a generally accepted security standard by making a given solution freely available and verifying its functionality or testing it intensively in the public domain,” says Lukáš Mikeska.
EY will now release this technology into the public domain. The main component allows for secure, private transfers and payments on the public Ethereum network. This supports fungible token payments compatible with the ERC-20 standard and unique asset transfers compatible with the ERC-721 standard. The ERC standards are publicly accepted open standards for tokens on the Ethereum blockchain.
Transactions processed using this technology are private to all blockchain users except those authorized to see the information. Companies will still be able to provide full traceability and transaction history to auditors and regulators without revealing transaction content more widely.
“We contribute most to the mass adoption of blockchain by making the results of our work available to the greater community without any conditions or obligations. For the blockchain platform to truly meet user expectations worldwide, the use of public blockchain networks must be a priority choice for enterprises and investors alike,” explains Lukáš Mikeska.