Strategic IS Report: Blockchain Implementation and Adoption at Sony

This report provides an in-depth analysis of blockchain technology and its potential implementation within Sony Corporation. It begins by defining blockchain and its characteristics, highlighting its decentralized, persistent, and anonymous nature. The report then discusses the issues related to blockchain technology, such as excessive energy usage and potential inefficiencies. An IS alignment tool is used to develop strategies and goals for Sony's blockchain implementation, focusing on protecting intellectual property rights and enhancing digital content management. The report contrasts Sony's current systems with future blockchain-integrated systems, emphasizing improvements in security and smart contract applications. It also examines the factors justifying Sony's adoption of blockchain, including its ability to protect intellectual property assets and mitigate security risks. Finally, the report concludes with recommendations for successful blockchain implementation within Sony, suggesting further research and strategic planning. Desklib provides this and many other solved assignments for students.

Running head: BLOCKCHAIN TECHNOLOGY
BLOCKCHAIN TECHNOLOGY
Name of the Student
Name of the university
Author note

1BLOCKCHAIN TECHNOLOGY
Executive Summary
At present times, cryptocurrency is a popular word in the spheres of both industry and
academia. In the year 2016, Bitcoin achieved huge level of success as its capital market has
reached a value of almost 10 billion dollars. With the support of a specifically designed
structure for data storage, the transactions taking place in Bitcoin network can be possible
without involving any third party and this the primary technology is Bitcoin. It serves as a
public ledger. This paper will be discussing on the technology involved in blockchain and its
implementation in the Sony Company will be considered in this case as well. The paper
consists of strategies and goals for implementing blockchain technology. The major aspect of
implementing blockchain technology requires proper understanding of the technology. The
purpose for which it is to be implemented must be clear. The paper lastly includes certain
recommendations which can make the implementation process successful in the Sony
Company.

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Table of Contents
Introduction................................................................................................................................4
Purpose...................................................................................................................................4
Scope......................................................................................................................................4
Limitations.............................................................................................................................4
The Blockchain..........................................................................................................................4
Characteristics of Blockchain................................................................................................5
Blockchain system taxonomy................................................................................................6
Issues related to Blockchain technology................................................................................6
IS Alignment tool.......................................................................................................................7
Strategies and goals for implementing Blockchain................................................................7
Current systems and future systems...........................................................................................8
Blockchain adoption...................................................................................................................8
A portfolio matrix....................................................................................................................10
Conclusion................................................................................................................................10
Recommendations....................................................................................................................10
List of Figures
Figure 1: Bitcoins Chart.............................................................................................................4
Figure 2: Architecture of Blockchain.........................................................................................6
Figure 3: Taxonomy of Blockchain...........................................................................................7
Figure 4: Bitcoins.....................................................................................................................11

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Figure 5: IBM Blockchain.......................................................................................................12
Introduction
Purpose
Blockchain technology is considered to be as the key technology that is made use of
for creating crypto currencies like bitcoin. The history of Blockchain technology dates back
to the fourth industrial revolution as since then the technology has been used in various
different spheres that include judiciary, commerce and finance (Crosby, Pattanayak, Verma &
Kalyanaraman, 2016). The main purpose of the paper is to provide an in-depth understanding
of the technology and its applications in corporate sectors. The way in which Sony has
adopted Blockchain technology will be considered to get a better idea of how the technology
can be applied to these sectors.
Figure 1: Bitcoins Chart
(Source: Pilkington, 2016)

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Scope
The aim of the paper is to discuss on the blockchain technology by referring to
different case studies and focus on adoption of the technology by the Sony
Company. The paper will decode the complexity involved in the Blockchain technology and
recommend certain ways to deal with the complex nature of the same.
Limitations
The limitations of the blockchain technology including the security flaws affecting the
blockchain network can be hindrance in the course of its adoption by the different sectors.
There are some unavoidable security flaws such as 51 percent attack that is considered to be
as one of the most serious limitations to the blockchain technology (Pilkington, 2016).
The Blockchain
Blockchain is the base upon which Bitcoin stands and has emerged in the past few
days. It is an indelible ledger that supports decentralized transaction. Applications based on
Blockchain technology are popping up at a faster rate in spheres such as finance, reputation
system and IoT. Blockchain consists of sequence of blocks that contain list of transactions
like the conventional public ledger. Every block in this sequence has a specific hash from the
previous block that is the parent block (Zheng et al., 2017). The first block of this chain
having no parent block is termed as genesis. A specific block comprises of a block header
along with a body. The header of the block has sub parts that are as follows:
a) Block version- This is there to indicate which block validation rule should be followed.
b) Merkel tree root hash- This refers to the hash value related to all transactions taking place
in a block.
c) Timestamp- This provides the current time as seconds in universal time since the year
1970.

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d) nBits- This refers to the target threshold of block any hash which is valid.
e) Nonce- It is a 4-byte field starting with zero and increasing after every hash calculation.
f) Parent block hash- This is a 256-bit hash value that in turn points to the previous block.
The body of block comprises of the transaction counter along with the transactions.
The number of transactions that any block can contain is dependent on the block’s size as
well as the size of the transactions (Lemieux, 2016). The technology uses mechanism of
asymmetric cryptography for the purpose of authentication of the transactions.
Figure 2: Architecture of Blockchain
(Source: Lemieux, 2016)
Characteristics of Blockchain
1) Decentralization- In the centralized system of transactions each of the transaction is
required to be validated by some central agency which adds to cost as well as to the
performance at the centrally based servers. Unlike to this, Blockchain makes use of
Consensus algorithms to establish consistency in data in the distributed network.
2) Persistency- The technology is effective in validating transactions and discarding the
invalid ones by the help of honest miners (Beck, Avital, Rossi & Thatcher, 2017). The
chances of transactions being rolled back or deleted are almost impossible in case of

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blockchain technology. The blocks comprising of any invalid transaction are identified
immediately.
3) Anonymity- Users interact with the distributed network by the help of a specifically
generated address thus their real identity is not revealed.
4) Auditability- The data stored by Bitcoin blockchain hold data relating to the user balances
that refer to Unspent Transaction Output model (Sharples & Domingue, 2016). It means that
any transaction taking place must refer to some unspent transaction done previously.
Blockchain system taxonomy
There exist three types of blockchain systems that include private, consortium and
public blockchain. In a public blockchain all the records stored can be viewed by the public
and they can actively be a part of the consensus process. In case of consortium blockchain
only a certain number of pre-selected nodes can take part in the consensus process (Min,
2019). While in a private blockchain nodes arising from a specific organization are
considered only.
Figure 3: Taxonomy of Blockchain
(Source: Min, 2019)
Issues related to Blockchain technology
Usage of excessive energy: Miners burn a huge amount of current as compared to the result
that is building of a new block. Thus, the consumption of energy for the processing of
blockchain is a persistent issue which is unavoidable.

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Indestructibility of blockchain: A blockchain cannot be shut down by special authorities or
services without the absence of a centralized control point
Anonymity is not an asset: If there is excessive transparency in financial matters it poses
threat and is a disadvantage of a block chain.
Blockchains can be inefficient: Blockchains store an entire transactional history and for the
storage the data needs to be downloaded (Wu & Li, 2018). A person cannot perform any
transactions unless the full download and verification step is completed. Sometimes this
continues for a couple of days and is not considered as progress for the users, since it spoils
the end-to-end block chains.
IS Alignment tool
After the incident that happened on November 24th 2014, Sony Pictures Entertainment
thought of implementing the blockchain technology that has the capability to protect some of
its key assets that include the Intellectual Property rights. The process involved in the
adoption of blockchain technology requires the Company to deal with the hurdles that is the
limitations of the technology that have been discussed above (Crosby, Pattanayak, Verma &
Kalyanaraman, 2016). The companies that have tried to implement the technology but
haven’t succeeded in their agenda need to be researched on so that the same mistakes are not
repeated in this scenario.
Strategies and goals for implementing Blockchain
In order to implement blockchain technology the Sony Company needs to consider
three primary factors that include the following
a) Value of the Blockchain technology
b) Short-term return on the investments made
c) Tailoring plan for the purpose of long term scalability

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The purpose for implementing Blockchain technology should be clear to the company
and work done accordingly. To implement a successful blockchain technology the company
needs to recognize the possible threats to the computer system of the company and the
network so that the technology can be applied at crucial junctions (Woodside, Augustine &
Giberson, 2017). The disruptive nature of blockchain technology needs to be well understood
and the employees trained for the same so that they understand the complexity of the system
and the system gets adopted well. Sony Company can make use of blockchain technology in
spheres such as rights management of its distinct digital content that include electronic
textbooks and its other available content that include music, VR content, e-books and films.
The hackers were successful in stealing sensitive data such as the social security numbers of
more than 47,000 employees, password of the systems, contracts and many more. The
blockchain technology can be applied to this so that the system can be prevented such attacks
in the future.
Current systems and future systems
The existing system is not that digitized and deals in system passwords and storage of
salary lists, copies of employee passport and some contracts in the computer system without
any such strong security measures in place. The hackers were successful in accessing many
of the Outlook mailboxes along with the audit documents that reveal lack of security
regulations and rules in place. After the implementation of the blockchain technology the
existing systems change such as in case of Sony can blockchain in protecting its Intellectual
Property Right providing smart contracts which is one of the primary applications of the
technology (Seebacher & Schüritz, 2017). These smart contracts make it easy to transfer
contract execution from various service providers such as lawyers, insurance companies and
many more.

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Blockchain adoption
Recent reports state that various companies are making use of the blockchain
technology to modify their business. Facebook, Walmart, IBM and Amazon are a few
examples of such companies. As per a survey by Deloitte, majority of the companies consider
blockchain as a priority to the organization. For a blockchain to be adopted broadly certain
features of it should exist;
i) Speed: Faster speed provides benefits to the company because it has been observed in the
past that even the biggest of networks do not have the capacity to handle the spikes beyond a
certain level.
ii) Sustainability: Different companies are using this technology for their revenue generation
like Walmart utilizes it for the food tracking purpose and to ensure safe products. Facebook is
launching Libra, its digital token and Merck is inclined towards a pilot program creation
which will help fighting the counterfeit drugs (Seebacher & Schüritz, 2017). Gradually a
network may not be able to sustain its performance when there a numerous users including
business partners, stakeholders etc. Sharding is a suggested solution to it wherein databases
are partitioned to store distinguished data chunks in individual shards. With the rise in
blockchain sharding will become a priority since data will be humongous.

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Figure 4: Bitcoins
(Source: Seebacher & Schüritz, 2017)
iii) Privacy: National attention has been given to Data security due to the breaches that have
occurred at Marriott, Equifax as well as Equifax, Facebook and Google. Blockchain focuses
on data privacy, security and also maintaining an anonymity network. Adding on to the
inexpensiveness and faster speed, blockchain is cost efficient, ensures data security, and
provides for smooth settlements. These advantages of blockchain are the reason for which
consumers want to switch to it.
Sony has built a blockchain for Music and video rights. It has found an efficient way of
demonstration and management of ownership of patent information in the field of written
works, utilizing the blockchain technology. It is planning to create hardware which supports
blockchain. Sony has not revealed about any specific uses but reported that the company is
responsible for the management of rights of digital content which includes e-books, VR

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content, music, e-textbooks, and films. Some companies are using blockchain for changing
travel. They are as follows:
Winding Tree: This Company is replacing the online booking hubs.
Cool Cousin: Recognizing the major attractions forms an important part for travel planning.
So this company is seeking a proper guidance using blockchain technology
Webjet: It is ensuring that the travellers do not face any issues with hotel bookings and this is
due to the block chain’s distributed ledger technology which records all the entries and thus
helps in the reduction of lost or mistaken bookings
Accenture: This organization is aiming at reducing the congestion in airport caused due to the
long queue of travellers since reports suggest that air travellers are expected to increase in the
near future.
Figure 5: IBM Blockchain
(Source: Seebacher & Schüritz, 2017)
A portfolio matrix
Question mark products