An Introduction to

Blockchain & its Applications

Session 6
Recap of last session
• Hyperledger Fabric allows permissioned access to distributed ledger
• Enterprise applications require additional data & setup as compared
to public blockchains
• Blockchains find use-cases in:
• Food supply chains
• Provenance
• Pharma supply chain
and so on
What shall we
cover today

• Blockchain use-cases by
industry
• What makes a good
blockchain use-case?
• Blockchain for
commerce
 Blockchain use-cases
by industry
Financial services
Public sector
Retail
Insurance
Supply chain & logistics
Blockchain in financial
services
• Trade finance
• Cross-currency payments
• Mortgages
• KYC
• Cross-border tax
Blockchain in • Asset registration
• Citizen identity
the public • Medical records

sector • Medicine supply chain

Blockchain in
insurance

Claims Risk Asset usage

processing provenance history

Claims file
Blockchain in supply chain & logistics

SUPPLY CHAIN MAINTENANCE PROVENANCE SUPPLY CHAIN

FINANCE TRACKING COMPLIANCE
 A business That cannot be
solved efficiently
problem to be with other
solved technologies

What makes a
good An identifiable
business
With
participants,
assets &
blockchain network transactions

use-case?
Consensus,
immutability,
A need for trust finality &
provenance
Understanding the business problem

What is the specific
business
problem/challenge that
the project will address?
Scope the business challenge up-
front
What is the current way
of solving this business
problem?
Understand current systems &
areas for improvement
Assuming the business
problem is large, what
specific aspects of the
business problem will be
addressed?
Understanding the
participants
Who are the current business network
participants (organizations) involved & what
are their roles?
• If there is no business network involved, then it may
not be a suitable use-case

Who are the specific users of this system

within the organizations & what are their
job roles?
• Understand the key users in a business network
Understanding the participants: Queries
How will they access and
Who are the
interact with the Do you need web/mobile
participants? How many
blockchain? Will they be apps?
types of participants?
peer nodes?

Who will operate the

Are gateways (e.g.
Do you need to integrate blockchain? Who will
gateways/data providers)
external data sources? govern/regulate the
needed?
blockchain?

What is the
value/incentive for each
participant to join the
network?
 Identities
• Do you need to know your users?
• Pseudo-anonymous blockchains (like bitcoin) do not require
user identities to be verified
• In most business use-cases, some form of identity is
required
Identity in
enterprise • In public blockchains, an identity oracle
blockchains (linked to a trusted database) could provide
identity-related information
• Such information could come from
governments, financial institutions or utility
providers, for example
• In private blockchains, a gateway or
controller ensures identity is verified before
credentials are issued to the user
Understanding assets & transactions

What assets are involved? What transactions are Understand what business
What key information is involved, between whom & contractual conditions
associated with the assets? and what assets are these assets are under as
associated with these they transfer from one
transactions? entity to another
Defining transactions

What processes need to take place on the blockchain network?

• Invoke actions (add/delete/change/transfer)

• Query actions

Do you need to control access to these functions based on the

participant types or roles?
Additional points of understanding

What are the main steps in the current workflow? How are these
executed by the current business network participants?

What is the expected benefit of applying blockchain technology to the

business problem for each of the network participants?

What legacy systems are involved? What degree of interaction with the
legacy systems is needed?
 • Existing pain points
• Scope: participants, assets, transactions
Assessing • Benefits: baseline, minimum viable
business ecosystem (MVE) & mature network
• Blockchain design points
value
• References
• Cost-benefit analysis
Building communities in blockchain networks

CONSORTIUM-BASED FOUNDER-DIRECTED COMMUNITY-BASED

NETWORKS NETWORKS NETWORKS
Consortium-based network
• Founders are equal among other Founder
participants
• May include a joint legal entity Member Member
among the founders (e.g. joint
ventures)
• Examples:
• JPX
Founder Founder
• We.Trade
• IBM Food Trust
Member
Founder-directed network
• Individual founder in a position Member
to provide strong direction
• Examples:
• Northern Trust
• CLSNet
Member Founder Member

Member
Community-based network
• Driven by industry-standard
bodies or existing non- Member
blockchain network owners
• Examples:
• IBM Watson Supply Chain
Member Member
• SWIFT

Member
Use-case: Trade & commerce
Challenges in trade-networks

Inefficiencies Risks Result

Multiple parties, multiple Currency fluctuation Financing is expensive
documentation Non-completion, delayed SMEs locked out
Low level of automation completion
Opportunities for trade networks

$14T+ of global trade is financed

Up to 3 weeks for documents to be verified

$26.7B potential annual cost savings by elimination of redundant

paperwork & automation
Blockchain-enabled trade network
 Use-case: Trade finance

Offers a means to Open account Mitigation of non-

convert export transaction: The goods payment through export
opportunities into sales are shipped and credit insurance
by managing the risks delivered before
associated with doing payment is due, usually
business internationally in 30 to 90 days
Particularly the challenges of
getting paid on a timely basis
Trade finance: As-is scenario
 Trade finance advantages
using blockchain
Secure shared ledger
Unambiguous view of contract
terms & status of goods across
importer, exporter, banks,
common carrier etc.
Common store of all documents
(L/C’s, B/L’s, drafts)
Smart contracts simplify
process & reduce
cost/time
Automation of business
workflows across organization
boundaries
Improved transparency &
accuracy of business workflows
Flexibility to model a variety of
contracts (revocable/irrevocable
L/C’s, confirmed/unconfirmed
L/C’s, time/sight drafts,
bank/trade acceptances etc.)
Trade finance blockchain-
enabled workflow
• Formal documents
• Letters of Credit (L/C)
• Bills of Lading (B/L)
• Drafts
 • We.Trade is a blockchain-based international
trading system for a consortium of major
We.Trade: banks including Deutsche Bank, HSBC, KBC,
Natixis, Rabobank, Société Générale,
Trade finance Santander, UniCredit, Nordea & more
• Enables accurate trading posture
network information, order to settlement control,
risk coverage, track & trace options
• https://www.we-trade.com
We.Trade: Workflow
We.Trade: Benefits

• Near real-time exchange of

information on a secure platform
that digitizes transactional
financing & other complex
processes
• Continuous business &
compliance readiness in any
regulatory environment
• Scalability that allows for rapid
international expansion as
business, regulatory & security
opportunities emerge
Supply-chain
financing: As-
is
 Difficult to obtain consistent view of status across all the
entities (hence, lack of trust)

Undertaking by supplier not to submit the invoice to two

banks for financing is the only mechanism to avoid double-
Supply- spending

chain Prone to errors during certain manual steps

financing:
Challenges Requires multiple costly ad-hoc point-to-point integrations
for automation of processes between suppliers, financiers &
OEMs/retailers/purchasers
In emerging geographies like India, only a small fraction of
the potential market is tapped by financial institutions
 Corporate buyer

Corporate receiver
Blockchain
solution roles
Supplier
&
responsibilities
Logistics provider (third-party)

Financier
 1 2 3
Supply-chain
Raise purchase See the status of See the GRN
roles: Buyer orders or upload purchase orders (Goods Received
digitized & invoices Note) status
purchase orders
Supply-chain 01 02 03
roles: Receive the goods Check the Record any
from the logistics reflection of the rejected items
Receiver suppliers GRN status on the
ledger
after quality
checks from
production line
 1 2 3 4
Supply-chain Respond to a Raise/correct See the GRN See the
roles: Supplier purchase
order by
ASN based on
logistics
status of the
shipped
invoice
payment
raising an provider’s goods status
invoice dispatch
• Multiple invoice schedule
against one PO
is allowed
Supply-chain
roles:
1 2 3 4
Logistics
provider Publish
dispatch
Record time of
arrival
Record time of
receipt by
Provide proof
of shipping
schedule receiver commitments
to the supplier
 Visibility into all purchase orders & invoices

Supply-chain Visibility into GRN status

• This can be used for rich analytics
roles: See the invoice financing advice details from purchaser
Financier Publish the event of financing approval
• Without exposing internal mechanisms (if any) to reach the decision

Publish the event of payment made

 Suppliers & buyers
• Smart contracts will eliminate the errors due to manual
steps
Benefits of Suppliers & financiers
blockchain- • Smart contracts will result in automation benefits &
enabled reduced time-to-finance
Buyers
solution • Easy access to financing will improve supplier performance

Financier
• Reduced time-to-finance will result in increased financing
duration
• Transparent orchestration will attract more purchasers &
suppliers and increase the client base for the financier
 Summary

Blockchain us well-suited Cost-benefit analysis of Blockchain finds key

for business networks implementation is critical impact in:
with no centralized trust
Not all use-cases need a Trade financing
blockchain solution Multi-party commerce
 Questions?

Thank you!