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© 2017 IBM Corporation
Blockchain Explained
An Introduction to Blockchain for Business
V5.0
V5.0, 4 October 2017
© 2017 IBM Corporation
Contents
2
What is Blockchain?
Why is it relevant for
our business?
How can IBM help us
apply blockchain?
© 2017 IBM Corporation
Business networks, wealth and markets
3
– 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)
© 2017 IBM Corporation
Transferring assets, building value
4
Two fundamental
types of asset
Intangible assets
subdivide
Cash is also
an asset
• Tangible, e.g. a house
• Intangible, e.g. a mortgage
• Financial, e.g. bond
• Intellectual, e.g. patents
• Digital, e.g. music
• Has property of anonymity
Anything that is capable of being owned or controlled to produce value, is an asset

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ibm blockchain platformblockchainhyperledger fabric
Making blockchain works for business
Making blockchain works for businessMaking blockchain works for business
Making blockchain works for business

The first slide deck from the IBM Blockchain Foundation for Developers course with an introduction to IBM Hyperledger architecture.

ibmhyperledgerblockchain
Blockchain FinTech PoC
Blockchain FinTech PoCBlockchain FinTech PoC
Blockchain FinTech PoC

This Case Study first describes the power of Blockchain for the Financial sector. Then, it takes a deep dive for an implementation strategy for Permissioned Blockchain network based on Hyperledger Blockchain technology that could accommodate different organizations and their loyalty programs.

blockchainfintechethereum
© 2017 IBM Corporation
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
Introducing Blockchain ...
6
© 2017 IBM Corporation
Blockchain
A trusted,
distributed
ledger
with shared
business
processes
© 2017 IBM Corporation
Problem …
7
… inefficient, expensive, vulnerable
Insurer
records
Auditor
records
Regulator
records
Participant
A’s records
Bank
records
Participant
B’s records
© 2017 IBM Corporation
… with consensus, provenance, immutability and finality
Auditor
records
Regulator
records
Bank
records
Participant
B’s records
Blockchain
Insurer
records
Participant
A’s records
A shared, replicated, permissioned ledger …
8

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Blockchain is a shared, immutable ledger that can record transactions and track assets in business networks. It allows companies to share records and establish trust without the need for a central authority. IBM's blockchain platform uses Hyperledger Fabric to develop applications that provide benefits like reduced costs, improved traceability and data sharing between organizations. It can help industries like finance, supply chain and healthcare by creating transparency and efficiency in business processes.

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blockchainhyperledger fabricibm blockchain
© 2017 IBM Corporation
Blockchain underpins Bitcoin
• 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
is:
9
© 2017 IBM Corporation
Requirements of blockchain for business
10
Append-only
distributed system of
record shared across
business network
Business terms
embedded in
transaction
database
& executed with
transactions
Transactions are
endorsed by
relevant
participants
Ensuring appropriate
visibility; transactions
are secure,
authenticated
& verifiable Privacy
Shared
ledger
Smart
contract
Trust
© 2017 IBM Corporation
Records all transactions across
business network
Shared ledger
111111
• Shared between participants
• Participants have own copy through
replication
• Permissioned, so participants see only
appropriate transactions
• THE shared system of record
© 2017 IBM Corporation
Business rules associated
with the transaction
Smart contract
• Verifiable, signed
• Encoded in programming
language
• Example:
– Defines contractual conditions
under which a bond transfer
occurs
121212

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© 2017 IBM Corporation
The ledger is shared, but
participants require privacy
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
© 2017 IBM Corporation
https://www.youtube.com/watch?v=EKa5Gh9whgU
© 2017 IBM Corporation
The ledger is a trusted source
of information
Trust
15
• 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
• Achieved through consensus,
provenance, immutability and finality
© 2017 IBM Corporation
Contents
16
What is Blockchain?
Why is it relevant for
our business?
How can IBM help us
apply blockchain?

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Using IBM Blockchain Platform (November 2019)
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How to use the IBM Blockchain Platform, including the VSCode Blockchain Extension and the web console.

ibm blockchain platformblockchainhyperledger fabric
Customer Case: AIG & IBM Blockchain solution
Customer Case: AIG & IBM Blockchain solutionCustomer Case: AIG & IBM Blockchain solution
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AIG - Standard Chartered - IBM Blockchain Solution for Multinational Insurence program. Presentation by Berman, Vice President - Major Accounts Manager at AIG. Held at Watson Sweden Summit 2017

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Real world
Real worldReal world
Real world

Its origins may be traced all the way back to the blockchain technology. There are decentralized blockchain networks. Blockchain technology is a wonderful innovation of the twenty-first century.

blockchain platformlearn blockchain
© 2017 IBM Corporation
17
© 2017 IBM Corporation
Blockchain is creating extraordinary opportunities
for businesses to come together in new ways
Optimize Ecosystems
Streamline business processes
and the exchange of value along
your ecosystem
Reduce Risk
Replace uncertainty
with transparency and a
trusted decentralized ledger
Create New Value
Exploit new business
models and eliminate
inefficiencies
© 2017 IBM Corporation
Further examples by (selected) industry
18
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
© 2017 IBM Corporation
Patterns for customer adoption
COMPLIANCE
LEDGER
CONSORTIUM
SHARED LEDGER
ASSET
EXCHANGE
HIGH VALUE
MARKET
• Created by a small set of participants
• Share key reference data
• Consolidated, consistent real-time view
• Sharing of assets (voting, dividend notification)
• Assets are information, not financial
• Provenance & finality are key
• Transfer of high value financial assets
• Between many participants in a market
• Regulatory timeframes
• Real-time view of compliance, audit & risk data
• Provenance, immutability & finality are key
• Transparent access to auditor & regulator
19
© 2017 IBM Corporation
© 2017 IBM Corporation
20
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 buy-
side 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

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IBM Blockchain Platform Explained v2.2
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© 2017 IBM Corporation
Contents
21
What is Blockchain?
Why is it relevant for
our business?
How can IBM help us
apply blockchain?
© 2017 IBM Corporation
IBM
Blockchain
Experts
Collaborate with
comprehensive
services teams from
ideation all the way
to production
Solutions
Solve critical
industry challenges
by building and
joining new
business networks
As a founding and
premier member of
Hyperledger, we’re
committed to open
source, standards
and governance
Platform
Develop, govern and
operate enterprise
blockchain networks
with speed and
security
Bringing together the world’s
most advanced expertise,
technology and ecosystem to
transform industries
22
© 2017 IBM Corporation
© 2017 IBM Corporation
23
Hyperledger: A Linux Foundation project
• A collaborative effort created to advance cross-industry
blockchain technologies for business
• Announced December 2015, now over 150 members
• Open source, open standards, open governance
• Five frameworks and three tools projects
• IBM is a premier member of Hyperledger
www.hyperledger.org
Brian Behlendorf
Executive Director
Blythe Masters
Board Chair
Chris Ferris
TSC Chair
© 2017 IBM Corporation
24
Hyperledger members
Premier General
Associate
Source: https://www.hyperledger.org/members
Updated 4 October 2017

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© 2017 IBM Corporation
Hyperledger Fabric: Distributed ledger platform
25
• An implementation of blockchain technology that
is a foundation for developing blockchain
applications
• Emphasis on ledger, smart contracts, consensus,
confidentiality, resiliency and scalability.
• V1.0 released July 2017
– 159 developers from 27 organizations
– IBM is one contributor of code, IP and
development effort to Hyperledger Fabric
http://hyperledger-fabric.readthedocs.io/
© 2017 IBM Corporation
Hyperledger Composer:
Accelerating Time to Value
26
• 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
• Features
– Model your business networks, test and expose via APIs
– Applications invoke transactions to interact with business network
– Integrate existing systems of record
• Fully open and part of Linux Foundation Hyperledger
• Try it in your web browser now:
http://composer-playground.mybluemix.net/
https://hyperledger.github.io/composer/
Business Application
Hyperledger Composer
Blockchain
(Hyperledger Fabric)
The only fully integrated enterprise-ready
blockchain platform designed to accelerate the
development, governance, and operation of a
multi-institution business network
• Based on Hyperledger Fabric V1 runtime
optimized for enterprise requirements
• Specialized compute for security, performance
and resilience
• Delivered via the IBM Cloud on a global footprint
with 24x7 Integrated Support
• Full lifecycle tooling to speed activation and
management of your network
Introducing the IBM Blockchain Platform
27
Develop
Explore and accelerate development time with
tools that ensure close alignment between
business leaders and developers
Govern
Speed activation, customization and
management of your business network with
democratic, multi-party governance tooling
Operate
Deploy and operate always-on networks
with production-ready enterprise performance
and security for most demanding use cases
[http://ibm.biz/Platform_Demo]
© 2017 IBM Corporation
© 2017 IBM Corporation
28
Making blockchain real for business with over
400 engagements and multiple active networks
Trade Finance Pre and Post Trade Complex Risk Coverage
Identity/ Know your customer (KYC) Unlisted Securities/ Private Equity Funds Loyalty Program
Medicated Health Data Exchange Fraud/ Compliance Registry Distributed Energy/ Carbon Credit
Supply Chain Food Safety Provenance/ Traceability

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Blockchain technologies can enable trusted transactions by providing a distributed digital ledger of transactions and asset transfers. The document discusses several use cases of blockchain including enabling global payments, improving supply chain visibility and traceability, facilitating trade finance and private equity administration, and addressing challenges in renewable energy flexibility and aircraft maintenance records. Blockchain allows for near real-time sharing of information across organizations on a secure immutable platform.

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This document discusses various blockchain use cases and projects by IBM. It provides 23 examples of blockchain applications for industries like trade finance, payments, supply chain, food safety, healthcare, energy, and more. For each one, it summarizes the key details including what the application does, how blockchain enables it, and the main benefits. The document aims to demonstrate how IBM is working with clients across sectors to develop blockchain solutions for real-world problems.

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This document provides an overview of blockchain technologies and how IBM can help businesses apply blockchain. It defines key blockchain concepts like shared ledgers, smart contracts, consensus, and privacy. It also discusses example use cases for blockchain like supply chain management, financial transactions, and regulatory compliance. The document outlines IBM's engagement model for helping customers explore blockchain, build proofs of concept, and scale blockchain applications. It positions IBM as supporting the open source Hyperledger project and providing tools and services to make blockchain adoption easier for businesses.

techinformation technologycloud computing
© 2017 IBM Corporation
29
IBM Engagement Model overview
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 Digital Face to face Face to face
Let’s
Talk
Blockchain
Hands-on
First
Project
Scale
Thank you
Mikael Haglund
www.ibm.com/blockchain
developer.ibm.com/blockchain
www.hyperledger.org
© Copyright IBM Corporation 2017. All rights reserved. The information contained in these
materials is provided for informational purposes only, and is provided AS IS without
warranty of any kind, express or implied. Any statement of direction represents IBM's
current intent, is subject to change or withdrawal, and represents only goals and
objectives. IBM, the IBM logo, and other IBM products and services are trademarks of the
International Business Machines Corporation, in the United States, other countries or both.
Other company, product, or service names may be trademarks or service marks of others.
IBM - Blockchain Explained - Introduction for Business

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IBM - Blockchain Explained - Introduction for Business

  • 1. © 2017 IBM Corporation Blockchain Explained An Introduction to Blockchain for Business V5.0 V5.0, 4 October 2017
  • 2. © 2017 IBM Corporation Contents 2 What is Blockchain? Why is it relevant for our business? How can IBM help us apply blockchain?
  • 3. © 2017 IBM Corporation Business networks, wealth and markets 3 – 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)
  • 4. © 2017 IBM Corporation Transferring assets, building value 4 Two fundamental types of asset Intangible assets subdivide Cash is also an asset • Tangible, e.g. a house • Intangible, e.g. a mortgage • Financial, e.g. bond • Intellectual, e.g. patents • Digital, e.g. music • Has property of anonymity Anything that is capable of being owned or controlled to produce value, is an asset
  • 5. © 2017 IBM Corporation 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 ... 6 © 2017 IBM Corporation Blockchain A trusted, distributed ledger with shared business processes
  • 7. © 2017 IBM Corporation Problem … 7 … inefficient, expensive, vulnerable Insurer records Auditor records Regulator records Participant A’s records Bank records Participant B’s records
  • 8. © 2017 IBM Corporation … with consensus, provenance, immutability and finality Auditor records Regulator records Bank records Participant B’s records Blockchain Insurer records Participant A’s records A shared, replicated, permissioned ledger … 8
  • 9. © 2017 IBM Corporation Blockchain underpins Bitcoin • 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 is: 9
  • 10. © 2017 IBM Corporation Requirements of blockchain for business 10 Append-only distributed system of record shared across business network Business terms embedded in transaction database & executed with transactions Transactions are endorsed by relevant participants Ensuring appropriate visibility; transactions are secure, authenticated & verifiable Privacy Shared ledger Smart contract Trust
  • 11. © 2017 IBM Corporation Records all transactions across business network Shared ledger 111111 • Shared between participants • Participants have own copy through replication • Permissioned, so participants see only appropriate transactions • THE shared system of record
  • 12. © 2017 IBM Corporation Business rules associated with the transaction Smart contract • Verifiable, signed • Encoded in programming language • Example: – Defines contractual conditions under which a bond transfer occurs 121212
  • 13. © 2017 IBM Corporation The ledger is shared, but participants require privacy 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. © 2017 IBM Corporation https://www.youtube.com/watch?v=EKa5Gh9whgU
  • 15. © 2017 IBM Corporation The ledger is a trusted source of information Trust 15 • 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 • Achieved through consensus, provenance, immutability and finality
  • 16. © 2017 IBM Corporation Contents 16 What is Blockchain? Why is it relevant for our business? How can IBM help us apply blockchain?
  • 17. © 2017 IBM Corporation 17 © 2017 IBM Corporation Blockchain is creating extraordinary opportunities for businesses to come together in new ways Optimize Ecosystems Streamline business processes and the exchange of value along your ecosystem Reduce Risk Replace uncertainty with transparency and a trusted decentralized ledger Create New Value Exploit new business models and eliminate inefficiencies
  • 18. © 2017 IBM Corporation Further examples by (selected) industry 18 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
  • 19. © 2017 IBM Corporation Patterns for customer adoption COMPLIANCE LEDGER CONSORTIUM SHARED LEDGER ASSET EXCHANGE HIGH VALUE MARKET • Created by a small set of participants • Share key reference data • Consolidated, consistent real-time view • Sharing of assets (voting, dividend notification) • Assets are information, not financial • Provenance & finality are key • Transfer of high value financial assets • Between many participants in a market • Regulatory timeframes • Real-time view of compliance, audit & risk data • Provenance, immutability & finality are key • Transparent access to auditor & regulator 19 © 2017 IBM Corporation
  • 20. © 2017 IBM Corporation 20 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 buy- side 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
  • 21. © 2017 IBM Corporation Contents 21 What is Blockchain? Why is it relevant for our business? How can IBM help us apply blockchain?
  • 22. © 2017 IBM Corporation IBM Blockchain Experts Collaborate with comprehensive services teams from ideation all the way to production Solutions Solve critical industry challenges by building and joining new business networks As a founding and premier member of Hyperledger, we’re committed to open source, standards and governance Platform Develop, govern and operate enterprise blockchain networks with speed and security Bringing together the world’s most advanced expertise, technology and ecosystem to transform industries 22 © 2017 IBM Corporation
  • 23. © 2017 IBM Corporation 23 Hyperledger: A Linux Foundation project • A collaborative effort created to advance cross-industry blockchain technologies for business • Announced December 2015, now over 150 members • Open source, open standards, open governance • Five frameworks and three tools projects • IBM is a premier member of Hyperledger www.hyperledger.org Brian Behlendorf Executive Director Blythe Masters Board Chair Chris Ferris TSC Chair
  • 24. © 2017 IBM Corporation 24 Hyperledger members Premier General Associate Source: https://www.hyperledger.org/members Updated 4 October 2017
  • 25. © 2017 IBM Corporation Hyperledger Fabric: Distributed ledger platform 25 • An implementation of blockchain technology that is a foundation for developing blockchain applications • Emphasis on ledger, smart contracts, consensus, confidentiality, resiliency and scalability. • V1.0 released July 2017 – 159 developers from 27 organizations – IBM is one contributor of code, IP and development effort to Hyperledger Fabric http://hyperledger-fabric.readthedocs.io/
  • 26. © 2017 IBM Corporation Hyperledger Composer: Accelerating Time to Value 26 • 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 • Features – Model your business networks, test and expose via APIs – Applications invoke transactions to interact with business network – Integrate existing systems of record • Fully open and part of Linux Foundation Hyperledger • Try it in your web browser now: http://composer-playground.mybluemix.net/ https://hyperledger.github.io/composer/ Business Application Hyperledger Composer Blockchain (Hyperledger Fabric)
  • 27. The only fully integrated enterprise-ready blockchain platform designed to accelerate the development, governance, and operation of a multi-institution business network • Based on Hyperledger Fabric V1 runtime optimized for enterprise requirements • Specialized compute for security, performance and resilience • Delivered via the IBM Cloud on a global footprint with 24x7 Integrated Support • Full lifecycle tooling to speed activation and management of your network Introducing the IBM Blockchain Platform 27 Develop Explore and accelerate development time with tools that ensure close alignment between business leaders and developers Govern Speed activation, customization and management of your business network with democratic, multi-party governance tooling Operate Deploy and operate always-on networks with production-ready enterprise performance and security for most demanding use cases [http://ibm.biz/Platform_Demo] © 2017 IBM Corporation
  • 28. © 2017 IBM Corporation 28 Making blockchain real for business with over 400 engagements and multiple active networks Trade Finance Pre and Post Trade Complex Risk Coverage Identity/ Know your customer (KYC) Unlisted Securities/ Private Equity Funds Loyalty Program Medicated Health Data Exchange Fraud/ Compliance Registry Distributed Energy/ Carbon Credit Supply Chain Food Safety Provenance/ Traceability
  • 29. © 2017 IBM Corporation 29 IBM Engagement Model overview 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 Digital Face to face Face to face Let’s Talk Blockchain Hands-on First Project Scale
  • 30. Thank you Mikael Haglund www.ibm.com/blockchain developer.ibm.com/blockchain www.hyperledger.org © Copyright IBM Corporation 2017. All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind, express or implied. Any statement of direction represents IBM's current intent, is subject to change or withdrawal, and represents only goals and objectives. IBM, the IBM logo, and other IBM products and services are trademarks of the International Business Machines Corporation, in the United States, other countries or both. Other company, product, or service names may be trademarks or service marks of others.