Making Blockchain Real for Governments

Transcription

1 Making Blockchain Real for Governments Networks of Trusted Data V1.0 August 8 th 2016 Page 1

2 Imagine if You can see all places your food has traveled from the farm to your table Before you left the auto dealer your title and registration were texted to your phone You were 100% certain your vote was counted Your digital identity was no longer represented by a userid and password Page 2

3 As our society and economy move toward a world where transactions of are primarily shared digitally between people, institutions, and things, our current methods for securely managing personal and proprietary information are proving inadequate. Fraud, identity theft, and data breaches are all too common, and a large number of people only have the most basic security tools to protect their personal information. MIT Summit Commission For Enhancing National Security July 2016 Page 3

4 Blockchain technology enables the creation of trusted networks where personal information identification, health records and prescriptions, finances, and other data is safe, secure, and accessible to only those whom are authorized with a need to know, then huge societal benefits can be unlocked. The benefits of blockchain technology include almost everything from more secure financial transactions, improved access to personal healthcare information, and more efficient and effective government and private-sector services MIT Summit Commission For Enhancing National Security July 2016 Page 4

5 Contents is Blockchain? is it relevant for our government? can IBM help apply Blockchain? Page 5

6 Business networks Business Networks benefit from connectivity Participants are customers, suppliers, banks, partners, government institutions. Cross geography & regulatory boundary Wealth is generated by the flow of goods & services across business network Markets are central to this process: Public (fruit market, car auction), or Private (supply chain financing, bonds) Page 6

7 Transferring assets, building value Anything that is capable of being owned or controlled to produce value, is an asset Two fundamental types of asset Tangible, e.g. a house Intangible, e.g. a mortgage Intangible assets subdivide Financial, e.g. bond Intellectual, e.g. patents Digital, e.g. music Cash is also an asset Has property of anonymity Page 7

8 Ledgers are key Ledger is THE system of record for a institution. Business will have multiple ledgers for multiple business networks in which they participate. Transaction an asset transfer onto or off the ledger John gives a car to Anthony (simple) Contract conditions for transaction to occur If Anthony pays John money, then car passes from John to Anthony (simple) If car won't start, funds do not pass to John (as decided by third party arbitrator) (more complex) Page 8

9 Introducing Blockchain A shared ledger technology allowing any participant in a business network to securely transact directly, with accountability and with higher resistance to malicious tampering. Page 9

10 Problem Party D s records Party A s records Bank records reconcile Party C s records Party B s records Auditor records Inefficient, expensive, vulnerable Page 10

11 Solution Party D s records Party A s records Bank records Shared, replicated, permissioned Party C s records Party B s records Auditor records Consensus, provenance, immutability, finality Page 11

12 Blockchain for regulated institutions Append-only distributed system of record shared across business network Shared ledger Smart contract Business terms embedded in transaction database & executed with transactions Ensuring appropriate visibility; transactions are secure, authenticated & verifiable Privacy Consensus All parties agree to network verified transaction Broader participation, lower cost, increased efficiency Page 12

13 Blockchain Example: Vehicle Registration Network A Ledger is Replicated Shared Transactional Department of Motor Vehicle Entries in the ledger are synchronized to all ledgers in the network. Consensus is used to ensure all ledgers are exact copies. Permissions ensure that networks members can only see items in ledger that you are permitted to see. Cryptography is used to protect entries. Transaction allow assets to be indelible entered into the ledger. Business rules provide the logic behind smart contracts. Vehicle Registration Network Auto Manufacturer Auto Dealer Page 13 Leasing Company Junk Yard

14 Blockchain underpins Bitcoin Unregulated, censorshipresistant shadow currency First Blockchain application Pioneer of Blockchain technology BUT is not bitcoin Digital currencies different from cryptocurrency Page 14

15 Contents is Blockchain? is it relevant for our government? can IBM help us apply Blockchain? Page 15

16 Blockchain benefits Saves time Removes cost Reduces risk Increases trust Transaction time from days to near instantaneous Overheads and cost intermediaries Tampering, fraud & cyber crime Through shared processes and recordkeeping Page 16

17 Consensus Use Case Citizen Identity for e-government What? Different government agencies (State or Federal) need to share citizen data to integrate and optimize citizen interactions Currently each agency maintains its own citizen information, making it difficult to get coherent view of citizen data How? Each agency maintains its own citizen data Blockchain creates single view of entire dataset without centralization Benefits 1. Consolidated, consistent view of citizen 2. Near-real-time view of citizen information 3. Facilitates integrated and optimized service delivery as part of e-government 17

18 Provenance Use Case Food Traceability What? Traceability of food from farm to fork Complex distribution and processing ecosystem involving farms, distributors, retailers, consumers makes it difficult to assure food provenance How? Blockchain holds history of food items processed through entire supply chain Accessible by each party in supply chain to record food processing steps Benefits 1. Increased trust multiplied by each participant in food supply chain 2. Pinpoint source of compromised food, reducing the unnecessarily broad recall 3. Improved co-ordination in food supply chain 18

19 Immutability Use Case Land Registry What? Record land titles, leases, ownership, transfer and history Immutable record of all key land transactions How? Blockchain records all land transactions in an append-only ledger Tamperproof qualities create high confidence record and audit trail for land transactions Benefits 1. High confidence property rights ledger 2. Simplifies workflow for all parties, leading to lower transaction costs and reduced time for land transactions 3. Provides high value source of information for government, business, academia and citizens 19

20 Finality Use Case Motor Vehicle Ownership What? Difficult, expensive and time consuming for DMV to gather vehicle information from different participants Integrate information on vehicle ownership across whole supply chain How? Blockchain provides agreed view of vehicle, including entire transaction history Allows all counter-parties to have the same validated record of transaction and fulfillment IoT links physical vehicles to digital ledger Benefits Consistent and up-to-date vehicle information Reduced cost and time for vehicle transactions Vital information source for value-added services including fraud detection, warranty, service and more 20

21 Key players for Blockchain adoption Regulator Industry Group Market Maker 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 Page 21 Often funded by members of a business network Provide technical advice on industry trends Encourages best practice by making recommendations to members In financial markets, takes buyside and sell-side to provide liquidity More generally, the organization who innovates - Creates a new good or service, and business process (likely) - Creates a new business process for an existing good or service

22 IBM Global Finance Dispute Network Video IBM s commercial financing business provides working capital to IT suppliers, distributors and partners through financing of inventory and accounts Page 22

23 Contents is Blockchain? is it relevant for our government? can IBM help us apply Blockchain? Page 23

24 Blockchain for Regulated Institutions Our PoV Community + Code Linux Hyperledger Project Cloud IBM Blockchain Open Source Code: Blockchain for business; Consensus Provenance Immutability Finality Open Governance 40 member cross industry board Blockchain managed service on IBM Cloud; Identity Consensus System Integration Hardware-assist for Performance & Security IBM Blockchain on Bluemix Clients Blockchain Solutions Blockchain Garage Making Blockchain real for business Blockchain Garage; New York London Singapore Tokyo Blockchain Services Practice Page 24

25 Engagement model overview Let s Talk Blockchain Hands-on First Project Scale 1. Discuss Blockchain technology 2. Explore customer business model 3. Show Blockchain Application demo 1. Understand Blockchain concepts & elements 2. Hands on with Blockchain on Bluemix 3. Standard demo customization 1. Design Thinking workshop to define business challenge 2. Agile iterations incrementally build project functionality 3. Enterprise integration 1. Scale up pilot or Scale out to new projects 2. Business Process Re-engineering 3. Systems Integration Remote or face to face Remote or face to face Face to face Face to face Free of charge Free of charge For fee For fee Page 25

26 Things to do next Read the IBV study paper from IBM Read about what others governments are doing with Blockchain UK - Talk to IBM about which project you want to sponsor? Identity (citizen identification) Provenance (Agriculture & Farming?) Land ownership Vehicle Registration Page 26

27 Summary Blockchain is a shared, replicated, permissioned ledger technology can open up business networks by taking out cost, improving efficiencies and increase accessibility addresses an exciting and topical set of business challenges, which cross every industry IBM supports the Linux Foundation Hyperledger open standard, open source, open governance Blockchain has IBM Blockchain on the IBM Cloud has an easy to access, proven and incremental engagement model giving customers the confidence to get started NOW Page 27

28 Thank you!