Making Blockchain Real for Business Explained

Transcription

1 Making Blockchain Real for Business Explained Jennifer Foley Integration Architect WW Client Center for Systems Innovation V4.0, 14 March

2 Contents is Blockchain? is it relevant for our business? can IBM help us apply Blockchain? 2

3 Business networks, wealth & markets Business Networks benefit from connectivity Participants are customers, suppliers, banks, partners Cross geography & regulatory boundary Wealth is generated by the flow of goods & 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) 3

4 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 4

5 Ledgers are key Ledger is THE system of record for a business. 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) 5

6 Introducing Blockchain A trusted, distributed ledger with shared business process 6

7 Problem Participant A s records Participant B s records Bank records Participant C s records Regulator records Auditor records inefficient, expensive, vulnerable 7

8 Solution Participant A s records Participant B s records Bank records Blockchain Participant C s records Regulator records Auditor records A trusted, distributed, permissioned ledger 8

9 Blockchain underpins Bitcoin is: An unregulated shadow-currency The first blockchain application Resource intensive Blockchain for business differs in key areas: Identity over anonymity Selective endorsement over proof of work Assets over cryptocurrency Page 9 9

10 Blockchain for business Append-only distributed system of record shared across business network Shared ledger Smart contract Shared business rules apply to transactions Ensuring appropriate visibility; transactions are secure, authenticated & verifiable Privacy Trust Participants are able to trust the contents of the ledger Broader participation, lower cost, increased efficiency 10

11 Shared ledger Records all transactions across business network Shared between participants Participants have own copy through replication Permissioned, so participants see only appropriate transactions THE shared system of record 11

12 Smart contract Business rules implied by the contract embedded in the Blockchain and executed with the transaction Verifiable, signed Encoded in programming language Example: Defines contractual conditions under which corporate Bond transfer occurs 12

13 Privacy The ledger is shared, but participants require privacy Participants need: Appropriate confidentiality between subsets of participants Identity not linked to a transaction Transactions need to be authenticated Cryptography central to these processes 13

14 Trust The ledger is a trusted source of information Participants endorse transactions Business network decides who will endorse transactions Endorsed transactions are added to the ledger with appropriate confidentiality Assets have a verifiable audit trail Transactions cannot be modified, inserted or deleted 14

15 Contents is Blockchain? is it relevant for our business? can IBM help us apply Blockchain? 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 16

17 Example: Supply chain What How Provenance of each component part in complex system hard to track Manufacturer, production date, batch and even the manufacturing machine program Blockchain holds complete provenance details of each component part Accessible by each manufacturer in the production process, the aircraft owners, maintainers and government regulators Benefits 1. Trust increased, no authority "owns provenance 2. Improvement in system utilization 3. Recalls "specific" rather than cross fleet 18

18 Potential use cases Further examples by (selected) industry Financial Public Sector Retail Insurance Manufacturing Trade Finance Cross currency payments Mortgages Asset Registration Citizen Identity Medical records Medicine supply chain Supply chain Loyalty programs Information sharing (supplier retailer) Claims processing Risk provenance Asset usage history Claims file Supply chain Product parts Maintenance tracking 21

19 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 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 23

20 Contents is Blockchain? is it relevant for our business? can IBM help us apply Blockchain? 24

21 How IBM can help Technology Linux Foundation Hyperledger Fabric Fabric Composer Hosting and Support High Security Business Network IBM Bluemix Making blockchain real for clients Garages Engagement 25

22 IBM Blockchain for Business LinuxONE Customers that prefer an on premise solution can run Blockchain on their own LinuxONE server. IBM z Systems clients seeking to innovate with Blockchain have a unique value proposition Community + Code Linux Hyperledger Project IBM Software Portfolio Connector technologies Systems management DevOps Co-location and adjacency that leverages decades of investment in IBM z Systems applications and transaction systems through APIs and microservices. Hardware performance advantages in our scalable, secure, high-performance systems. Highest Security, and Financial Certifications. 26

23 Blockchain benefits from LinuxONE Superior performance and highest industry certifications Meets strictest requirements for: government, healthcare, and financial services, including insurance! App1 App2 App3 API Layer Smart Contracts Fastest hardware acceleration for Hashing Elliptical Curve algorithm for digital signature Global Security Compliance PKCS11 standard for interfacing to crypto tokens FIPS 140-2, Level 4 (HSM has highest certification) Cryptographic Protocols Shared Replicated Ledger 10TB Memory Enables transactions to remain in memory for processing, reducing latency for ledger processing Consensus Algorithm Blockchain peers benefit from a high-speed network (reduced latency, high throughput) 27

24 What Differentiates z Solution Smart contract integration with SoR on z 5 key differentiators 1. Secure key management protects transaction keys and ensures peers on the blockchain are not at risk of being compromised. 2. High Evaluation Assurance Level protection between environments enables blockchain peers to run in protected environments isolated from other peers and other parties. This prevents leaks into another party's environment through shared memory or other key shared hardware. 3. Highly auditable operating environment allows complete auditing for all transaction logs to support forensics and compliance. 4. Crypto optimization supports an environment that moves hashing and the creation of digital signatures to optimized accelerators 5. Protection from system administrators and root users blockchain operating environments protected from access by system administrators and root users. These credentials could have been falsely obtained by hackers. Hardware prevents malware installation. 28

25 Blockchain on LinuxONE Secure Service Container protection No system admin access Once the appliance image is built, OS access (ssh) is not possible Only Remote APIs available Memory access disabled Encrypted disk Debug data (dumps) encrypted Strong isolation between SSC instances Based on EAL5+ protection profile Requires dedicated HW Encrypted, Signed, Tamper Resistant, Protected Boot sequence 1. Firmware bootloader is loaded in memory 2. Firmware loads the software bootloader from disk i. Check integrity of software bootloader ii.decrypt software bootloader 3. Software bootloader activate encrypted disks i. Key stored in software bootloader (encrypted) ii.encryption/decryption done during access to blockchain code and data 29

26 IBM Blockchain on Bluemix Plans Starter beta for Developers High Security for Enterprise 4 peers and a Cert Authority Deploy and test chaincode Dashboard with logs, controls, and APIs Sample apps with source code Isolated environment on dedicated compute Optimized performance and high speed network Advanced Security: HSM, Secure Service Container and more 30

27 Fabric Composer: Accelerating time to value A suite of high level application abstractions for business networks Emphasis on business-centric vocabulary for quick solution creation Reduce risk and increase understanding and flexibility Business Application Fabric Composer Blockchain (Hyperledger Fabric) Features Model your business networks, test and expose via APIs Applications invoke APIs transactions to interact with business network Integrate existing systems of record using loopback/rest Open source and freely available at 31

28 Linux Foundation Hyperledger A collaborative effort created to advance cross-industry blockchain technologies Announced December 2015, now over 120 members Brian Behlendorf Executive Director Open source, open standards, open governance Blythe Masters Board Chair One active framework ( Fabric ) and four incubators IBM is a premier member of the Hyperledger Project Chris Ferris TSC Chair 32

29 Hyperledger Project Members Premier General QUICK FACTS Chairman Blythe Masters/DAH Executive Director Brian Behlendorf Technical Chair Chris Ferris/IBM Associate Contribution Sprint to one codebase with unified thinking 44,000 lines of code in February 2016 Staged releases Updated Mar

30 It s a contest and a Hands on Lab! Free Hands-on Lab Introduction to the platform that 90% of Fortune 500 companies rely on We teach everything they need to know New challenges every year We handle all questions and system support Students earn Badges that companies are looking for We even grade it for you!! 34

31 Selected References FX Netting Settlements through digital currency Identity management Food Safety Trade Finance Channel Financing Low liquidity securities trading and settlement Reward points management Contract Management 36

32 Getting started... 1 Learn IBM Blockchain Use cases by industry Self paced education 2 Build Blockchain on Bluemix Blockchain in Docker Blockchain garage 3 Connect Blockchain ecosystem Hyperledger community 37

33 Get your hands dirty Watch videos & read articles Blockchain a demo, teaches about hashing, nonce and mining CuriousInventor Bitcoin Series teaches about technical aspects Donna Dillenberger demo of smart contracts Milken Institute panel discussion why blockchain will change the world PCMag "Blockchain: The Invisible Technology That's Changing the World" Education for developers, earn badges Requires Bluemix account, free trial for students at onthehub.com/ibm/ Contribute to Hyperledger Play around Blockchain on LinuxOne Community Cloud Advocacy Hub series of challenges, earn points towards prizes 38

34 Thank you!

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36 Further Information Use case Links HSBC, Bank of America, IDA: ABN AMRO: Crédit Mutuel Arkéa: JPX: Kouvola Innovation: London Stock Exchange: Mizuho: IBM Global Finance: 41