Blockchain Explained

An Introduction to Blockchain for Business

Stella Loiacono – Innovation Leader – IBM

Sebastián Zmener – Arquitecto IT- IBM Blockchain Explained Series

Blockchain Explained
IBM Blockchain Platform Explained
Solutions Explained
What’s New
Next Steps
V5.17, 1 May 2019
What is Blockchain?

Example networks

How can IBM help?

Trust & Collaboration
Business networks, wealth and markets

• Business Networks benefit from connectivity

– Participants are customers, suppliers,
banks, partners
– Cross geography and regulatory boundary

• Wealth is generated by the flow of goods and

services across business network in transactions
and contracts

• Markets are central to this process:

– Public (fruit market, car auction), or
– Private (supply chain financing, bonds)

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Transferring assets, building value
Anything that is capable of being owned or controlled to produce value, is an asset

Two fundamental Intangible assets Cash is also

types of asset subdivide an asset
• Tangible, e.g. a house • Financial, e.g. bond • Has property of anonymity
• Intangible, e.g. a mortgage • Intellectual, e.g. patents
• Digital, e.g. data

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Ledgers vs Databases

A traditional database is centralized and everybody

needs to trust its administrator.
The concept of immutability and provenance are not
achievable.

Distributed Databases do not alleviate the problem of

trust as more copies need to be administered and
governed.

A Distributed Ledger Technology (one form of it being

Blockchain and its ledger) allows the concept of
distributed databases to be implemented in a network
without trust with no centralized management.

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 Shared,
replicated,
permissioned
ledger

Blockchain
for
Business

Shared
business
rules

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 Problem
inefficient, expensive, vulnerable
Participant A’s records Participant B’s records Bank records

Insurer records Regulator records Auditor records

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 Solution
A shared, replicated, permissioned ledger…
…with consensus, provenance, immutability and finality

Participant A’s records Participant B’s records Bank records

Blockchain

Insurer records Regulator records Auditor records

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Different types of blockchain

• All blockchains aim to provide irrefutable proof that

a set of transactions occurred between participants

• Different types of blockchain exist:

is an example of an
unpermissioned, public blockchain
– The first blockchain application
– Defines a shadow-currency and its ledger
– Resource intensive

• Blockchains for business generally prioritize

– Assets over cryptocurrency; Identity over anonymity; Selective endorsement over proof of work

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Requirements of blockchain for business

ASSETS IDENTITY ENDORSEMENT

Participants Participants know Participants give

decide which who they are provable
assets to share dealing with; endorsement
information shared
is need-to-know

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What is Blockchain?

Example networks

How can IBM help?

 IBM is making blockchain real for Unlisted
Securities
business with cross-industry solutions
and over 100 active networks.
Clearing &
Provenance
Settlement

Bank
Guarantees

Trade Universal Global

Finance Healthcare
Payments Trade

Food Identity Insurance

Government Distributed
Energy
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TradeLens

What?
• An open, extensible platform for sharing shipping events,
messages, and documents across all the actors and Open global trade digitization platform
systems in the supply chain ecosystem.
How?
• Providing Shared Visibility and Shared State for
Container Shipments Exporter Trucker Rail Forwarder Consignee

Benefits
• Increase speed and transparency for cross border Terminal Authority Authority Carrier

transactions through real time access to container events.

• Reduced cost and increased efficiency through paperless
trade

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 TM
IBM Food Trust

Efficiency
• The IBM Food Trust solution is a set of modules providing
traceability to improve food transparency and efficiency

• Blockchain is used to create a trusted connection with Digital

Distributed
shared value for all ecosystem participants, including end Transactions
Ledger
consumers

• The solution offers connectors for interoperability and

leveraging existing standards (e.g., GS1)

• Blockchain properties come together to create a more Trust Transparency

trusted, transparent, and efficient data-sharing platform.
Immutable
Data

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Further examples by industry

Financial Public Sector Retail Insurance Manufacturing

• Trade Finance • Asset • Supply chain • Claims • Supply chain
Registration processing
• Cross currency • Loyalty programs • Product parts
payments • Citizen Identity • Risk provenance
• Information • Maintenance
• Mortgages • Medical records sharing (supplier • Asset usage tracking
– retailer) history
• Letters of Credit • Medicine supply
chain • Claims file

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Key players for blockchain adoption
Regulator
• An organization who enforces
the rules of play
• Regulators are keen to support
Blockchain based innovations
• Concern is systemic risk – new
technology, distributed data,
security
Industry Group
• Often funded by members of a
business network
• Provide technical advice on
industry trends
• Encourages best practice by
making recommendations to
members
Market Maker
• In financial markets, takes buy-
side and sell-side to provide
liquidity
• More generally, the organization
who innovates
• Creates a new product and
business process, or a new
business process for an existing
product
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What is Blockchain?

Example networks

How can IBM help?

How IBM can help
The certainty to solve business challenges together

Security Trusted Network

at Scale
Enterprise-grade security and
control on a platform where
businesses and industries are
reinventing themselves
Expertise
Reinventing business processes through
unrivaled industry and technical knowledge
as you start, accelerate and innovate your
blockchain network.
Convening Power
Bringing together an expansive partner
network of innovators, regulators
and suppliers to establish, join or run
your blockchain network.

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Leverage the unrivaled technology, expertise and
access of IBM Blockchain

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 IBM Blockchain Platform

Advanced tooling
allows you to quickly
build, operate and grow
blockchain networks

Open technology Build Operate Grow

uses the popular
Hyperledger Fabric
distributed ledger

Deploy anywhere
fully managed, or flexible
deployment on-premises or IBM Cloud On-Premises Other clouds
on other cloud vendors

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Hyperledger: A Linux Foundation project
General General

• IBM Blockchain Platform is underpinned

Premier
by technology from the Hyperledger
project

• Hyperledger is a collaborative effort

created to advance cross-industry
blockchain technologies for business

• Founded February 2016; now more

than 260 member organizations

• Open source
Open standards
Open governance model

Source: https://www.hyperledger.org/members
Updated: 30 April 2019
Associate
Academia Associate

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Distributed ledger
• An implementation of blockchain technology that is
a foundation for developing blockchain applications

• Emphasis on ledger, smart contracts, consensus,

confidentiality, resiliency and scalability.

• V1.4.1 released April 2019

– V1.4 Long Term Service release with
emphasis on production operational and
serviceability enhancements; new
programming model abstractions for ease of
development
– V1.4.1 adds new RAFT consensus

• IBM is one of the many contributing organizations

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Get started on your blockchain journey
Start Accelerate Innovate

Create or Join a network Commercialize your network Extend a network

Prioritize the best use cases and Apply proven frameworks & expertise Build business models & new
networks for your business, and rapid to address complex legal/ governance applications through the integration
development of a minimum viable & operational challenges, & deliver a with established networks &
network in 12 weeks or less. production network. advanced technologies.

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Thank you

Stella Loiacono – loiacono@ar.ibm.com

Sebastián Zmener - zmener@ar.ibm.com

Questions? Tweet us or
go to ibm.com/blockchain
@IBMBlockchain
IBM Blockchain
IBM Blockchain
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