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Making Blockchain Real for
Business



Explained
Rajeev Kumar
What
Why
How
. . are Blockchain technologies ?
. . is it relevant for our business?
. . the Blockchain landscape?
Page 1 of 32
Contents
3
What?
Page 2 of 32
Business Networks, Markets & Wealth
•  Business Networks benefit from connectivity
–  Connected customers, suppliers, banks,
partners
–  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)
The term blockchain can elicit reactions ranging from a blank stare (from the
majority of the general public) to evangelical fervour (from over-enthusiastic early
adopters).
The best-known example of blockchain technology in action is the leading
cryptocurrency Bitcoin, but there are many more use cases—think of blockchain
as the ‘operating system’.
What?
Page 3 of 32
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

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Blockchain is a leading technology that has brought in a wave of change. This distributed ledger technology forms the underlying technology for Bitcoin exchange, but over a period of time, Blockchain emerged as a mainstream technology, and now it finds a multitude of applications. Blockchain developers are in great demand across the different industrial segments; from food to finance, you can find a multitude of applications of Blockchain technology.

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Blockchain 101 for Government Officials
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At the 2017 NC Digital Government Summit, I gave a presentation to demystify Blockchain. The presentation explained what is blockchain, compared primitive trade to Burning Man -- and, highlighted the record and public key; then ended with specific use cases.

blockchain 101blockchain explainedblockchain for government
Ledgers are Important
���  records asset transfer between
participants.
[1] The principal book (or computer file) for recording and
totaling financial transactions by account type, with debits and
credits in separate columns and a beginning monetary
balance and ending monetary balance for each account.
What?
Page 4 of 32
•  Ledger [1] is THE system of
record for a business
•  Business will have multiple
ledgers for multiple business
networks in which they
participate.
What?
Page 5 of 32
Participants, Transactions & Contracts
•  Participants - members of a business
network
–  Customer, Supplier, Government, Regulator
–  Usually resides in an organization
–  Has specific identities and roles
•  Transaction - an asset transfer
–  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)
What?
Page 6 of 32
A shared ledger technology allowing any participant in
the business network to see THE system of record
(ledger)
Introducing Blockchain
Counter-party
records
Bank records
Party C’s Records
 Auditor records
Party B Records
Party A’s Records
API-integrations
Incident
What?
Inefficient, expensive, vulnerable
Ledger
Ledger
Ledger
Ledger
Ledger
Ledger
Page 7 of 32
Problem - Difficult to monitor asset ownership and transfers in a trusted 
business network


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enterpriseblockchain networkblockchain technology
Counter-party
records
Bank records
Party C’s Records
 Auditor records
Party B Records
Party A’s Records
What?
Ledger
Ledger
Ledger
Ledger
Ledger
Ledger
Participants have
multiple shared
ledgers
NOTE :
Participants
same as before
Page 8 of 32
Solution – a permissioned, replicated, shared ledger
Consensus, provenance, immutability, finality
What?
Page 9 of 32
Blockchain underpins Bitcoin . . .
1.  is unregulated, censorship-resistant
shadow currency
2. Blockchain ensures “cash like” coin passing
•  unique,
•  immutable,
•  final
4. Digital currencies different from cyptocurrency
3.  is the first Blockchain application
•  Blockchain is not
Blockchain for Business
Smart
Contract
Privacy
Shared
Ledger
Validation
Ensuring appropriate
visibility; transactions are
secure, authenticated &
verifiable
Business terms embedded
in transaction database &
executed with transactions
All parties agree to
network verified
transaction
Append-only distributed
system of record shared
across business network
Broader participation, lower cost, increased efficiency
What?
Page 10 of 32
Shared Ledger
 What?
Page 11 of 32
•  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

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My keynote slides from the Second International Symposium on Foundations and Applications of Blockchain 2019 (FAB '19) and a talk I gave the day before at Google. In this talk, I'm giving an overview of our research in Software Architecture, Model-Driven Engineering, Dependability / Availability, and Business Process Execution in the context of Blockchain. It's a summary of our book: X. Xu, I. Weber, M. Staples, Architecture for Blockchain Applications, Springer 2019

blockchainsmart contractssoftware architecture
Smart Contract
•  . . embedded in the Blockchain & 
•  executed with the transaction
•  Verifiable, signed
•  Encoded in programming language
•  Example:
–  De��nes contractual conditions under
which corporate Bond transfer
occurs
What?
Page 12 of 32
•  Business rules implied by the
contract . .
Privacy
•  Ledger is shared, but participants require
privacy
•  Participants need:
–  Transactions to be private
–  Identity not linked to a transaction
•  Transactions need to be authenticated
•  Cryptography central to these processes
What?
Page 13 of 32
Validation
•  Transaction verification & commitment
•  When participants are anonymous 
–  Commitment is expensive
–  Bitcoin cryptographic mining provides verification
for anonymous participants but at significant
compute cost (proof of work)
•  When participants are known & trusted 
–  Commitment possible at low cost
•  Multiple alternatives
–  proof of stake where fraudulent transactions cost
validators (e.g. transaction bond)
–  multi-signature (e.g. 3 out of 5 participants agree)
•  Industrial Blockchain needs “pluggable”
consensus
What?
Page 14 of 32
Contents
What
Why
How
. . are Blockchain technologies ?
. . is it relevant for our business?
. . the Blockchain Landscape?
Page 15 of 32

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Industrial Blockchain Benefits
Reduce costs and complexity


Improve discoverability
Why?
Trusted recordkeeping



Shared trusted processes



Page 16 of 32
Why?
Page 17 of 32
Blockchain – not for all . . .
NEGATIVE Indicators
1.  Need high performance (millisecond) transactions
2.  Small organization (no business network)
3.  Looking for a database replacement
4.  Looking for a messaging solution
5.  Looking for transaction processing replacement
How?
Page 18 of 32
Patterns for Customer Adoption
(1) INTERNAL LEDGER
•  Ledger for internal reporting, audit and
compliance,
•  Consistent view of key business assets,
•  Provenance, immutability & finality more
important than consensus.
•  Access to auditor and regulator
(2) CONSORTIUM SHARED LEDGER
•  Created by a small set of participants
and consumers.
•  Consistent real-time view of key information
•  Share reference data between themselves
(3) INFORMATION HUB
•  A ledger set up in a single organization
•  Sharing of information between participants
(e.g. voting, dividend notification)
•  Assets have information, not financial value
•  Require provenance, immutability & finality.
(4) HIGH VALUE MARKET
•  Ledger for the transfer of high financial value
Blockchain
assets
•  between many participants in a market.
•  Requires all enterprise features of
Why?
Page 19 of 32
Use Case – Letter of Credit
What?
•  Bank handling letters of credit (LOC) wants to offer them
to a wider range of clients including startups
•  Currently constrained by costs & the time to execute
How?
•  Blockchain provides common ledger for letters of credit
•  Allows bank and counter-parties to have the same
validated record of transaction and fulfillment
Benefits
•  Increased trust
•  Increase speed of execution (less than 1 day)
•  Vastly reduced cost

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Why?
Page 20 of 32
Use Case – Business to Business Contracts
What?
•  Buyer wants efficient way of converting a purchase order
into validated, self executing contract updated to reflect
the status of the supply.  
•  Agreement must be visible to the buyer, the seller, banks,
logistics partners and other stakeholders.
How?
•  Blockchain provides a shared record of the contract
status which is updated as the contract progresses.  
•  Available to all parties to the agreement, their banks and
partners.
Benefits
1.  increased efficiency and transparency across the
supply chain.
2.  risk management improved through the near real time
update of all contracts.
Why?
Page 21 of 32
Use Case – Smart Refrigerator
ability to interact with business systems
How?
•  Blockchain to manage automated
What?
•  Value of connected smart devices limited by
interactions with the external world
•  ordering and paying for food to arranging for
its own software upgrades and tracking its
warranty.  
Benefits
1.  business value from connected technology
2.  efficiencies in network and supply chains
3.  status transparent to all network members
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Page 22 of 32
Use Case – Open, Trusted Supply Chain
What?
•  Consumers demanding transparency on where and
how their products are made.
•  EU requires more information about corporate
supply chains, with penalties for non-compliance.
How?
•  Blockchain enable safe digital transfer of property
across the end to end supply chain. 
Benefits
1.  verifiable, preventing any party from altering
2.  efficiencies through greater transparency
3.  consumers can make informed purchases
4.  governments get reliable information
Why?
Page 23 of 32
Use Case – Aircraft Maintenance
What?
•  Provenance of each component part in complex
system hard to track
•  Manufacturer, production date, batch and even the
manufacturing machine program.
How?
•  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

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Blockchain explained
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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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Why?
Page 24 of 32
Use Case – On Line Gaming
What?
•  Game player wants to trade “gold” earned in
current game for the currency or assets of another
game
•  Use experience with the current game to put me
ahead and not have to start cold in the new game
How?
•  Blockchain holds tokens of value shared across on
line gaming platform
Benefits
•  Transparency to game player, game owners &
infrastructure providers
•  Efficiencies through elimination of intermediaries
•  Increased trust for all involved parties.
27
Why?
Page 25 of 32
•  Syndicated Loans
•  Intra-bank settlement
–  Real estate records
–  Vehicle registrations
–  Business license and ownership records
–  Cross border remittances
–  Mortgage verification
–  Mortgage contracts (smart contract)
•  Public Records
•  Retail Banking•  Securities
•  Trade Finance
–  Bill of Lading
–  Cross-currency payment
–  Post-trade settlement
–  Derivative contracts
–  Securities issuance
–  Collateral management
Other Potential Use Cases include . .
Contents
What
Why
How
. . are Blockchain technologies ?
. . is it relevant for our business?
. . the Blockchain landscape?
Page 26 of 32
© 2016 IBM Corporation
Hyperledger Project
§  Linux Foundation - announced 17th December 2015
§  New open ledger project to transform the way business
transactions are conducted around the world
§  Project members understand that an open source, collaborative
development strategy supporting multiple players in multiple
industries is required
Enable adoption of shared ledger technology at a pace and depth not
achievable by any one company or industry
How?
Page 27 of 32

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How?
Page 28 of 32
As you’d expect with an emerging technology, the blockchain market is
a rapidly evolving one. Analyst IDC has compiled a view of the
blockchain landscape as it stood at the end of 2017, showing the major
players, and outlining the current structure of the market.
There are 72 companies listed in total:
Covering four Tech layers (Identity management, Fabrics & DL platforms, Security,
Payments, Smart contracts),
Four Services categories (Blockchain as a service, Consulting and professional services,
Consortiums/industry groups, Compliance),
Four Industry applications (Natural resources, Financial transactions, Government & health,
Supply chain & trade fnance),plus Regulators & agencies and Data provenance & notary.
How?
Page 29 of 32
Summary
Page 30 of 32
1.  Blockchain is a shared, replicated ledger technology
2.  Blockchain can open up business networks by taking out
cost, improving efficiencies and increase accessibility
4.  Blockchain addresses an exciting and topical set of business
challenges, which cross every industry
5.  Linux Foundation Hyperledger project developing open
source, open standards shared ledger technology
Page 30 of 32
Bonus

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Page 30 of 32
BonusFor You
Blockchain is revolutionizing the way data and assets are traded.
The technology is expected to have a huge impact on different sectors and industries.
A Blockchain Developer must know one of the modern programming languages like
Java or C++.
These languages don’t just help create applications for blockchain, but also help learn
contract-based or blockchain-based languages like Simplicity or Solidity.
Useful Links:
https://dzone.com/articles/blockchain-implementation-with-java-code
https://developer.ibm.com/blockchain/
Thank You!

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Making blockchain real for business

  • 1. Making Blockchain Real for Business
 
 Explained Rajeev Kumar
  • 2. What Why How . . are Blockchain technologies ? . . is it relevant for our business? . . the Blockchain landscape? Page 1 of 32 Contents
  • 3. 3 What? Page 2 of 32 Business Networks, Markets & Wealth •  Business Networks benefit from connectivity –  Connected customers, suppliers, banks, partners –  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) The term blockchain can elicit reactions ranging from a blank stare (from the majority of the general public) to evangelical fervour (from over-enthusiastic early adopters). The best-known example of blockchain technology in action is the leading cryptocurrency Bitcoin, but there are many more use cases—think of blockchain as the ‘operating system’.
  • 4. What? Page 3 of 32 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
  • 5. Ledgers are Important –  records asset transfer between participants. [1] The principal book (or computer file) for recording and totaling financial transactions by account type, with debits and credits in separate columns and a beginning monetary balance and ending monetary balance for each account. What? Page 4 of 32 •  Ledger [1] is THE system of record for a business •  Business will have multiple ledgers for multiple business networks in which they participate.
  • 6. What? Page 5 of 32 Participants, Transactions & Contracts •  Participants - members of a business network –  Customer, Supplier, Government, Regulator –  Usually resides in an organization –  Has specific identities and roles •  Transaction - an asset transfer –  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)
  • 7. What? Page 6 of 32 A shared ledger technology allowing any participant in the business network to see THE system of record (ledger) Introducing Blockchain
  • 8. Counter-party records Bank records Party C’s Records Auditor records Party B Records Party A’s Records API-integrations Incident What? Inefficient, expensive, vulnerable Ledger Ledger Ledger Ledger Ledger Ledger Page 7 of 32 Problem - Difficult to monitor asset ownership and transfers in a trusted  business network

  • 9. Counter-party records Bank records Party C’s Records Auditor records Party B Records Party A’s Records What? Ledger Ledger Ledger Ledger Ledger Ledger Participants have multiple shared ledgers NOTE : Participants same as before Page 8 of 32 Solution – a permissioned, replicated, shared ledger Consensus, provenance, immutability, finality
  • 10. What? Page 9 of 32 Blockchain underpins Bitcoin . . . 1.  is unregulated, censorship-resistant shadow currency 2. Blockchain ensures “cash like” coin passing •  unique, •  immutable, •  final 4. Digital currencies different from cyptocurrency 3.  is the first Blockchain application •  Blockchain is not
  • 11. Blockchain for Business Smart Contract Privacy Shared Ledger Validation Ensuring appropriate visibility; transactions are secure, authenticated & verifiable Business terms embedded in transaction database & executed with transactions All parties agree to network verified transaction Append-only distributed system of record shared across business network Broader participation, lower cost, increased efficiency What? Page 10 of 32
  • 12. Shared Ledger What? Page 11 of 32 •  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
  • 13. Smart Contract •  . . embedded in the Blockchain & •  executed with the transaction •  Verifiable, signed •  Encoded in programming language •  Example: –  Defines contractual conditions under which corporate Bond transfer occurs What? Page 12 of 32 •  Business rules implied by the contract . .
  • 14. Privacy •  Ledger is shared, but participants require privacy •  Participants need: –  Transactions to be private –  Identity not linked to a transaction •  Transactions need to be authenticated •  Cryptography central to these processes What? Page 13 of 32
  • 15. Validation •  Transaction verification & commitment •  When participants are anonymous –  Commitment is expensive –  Bitcoin cryptographic mining provides verification for anonymous participants but at significant compute cost (proof of work) •  When participants are known & trusted –  Commitment possible at low cost •  Multiple alternatives –  proof of stake where fraudulent transactions cost validators (e.g. transaction bond) –  multi-signature (e.g. 3 out of 5 participants agree) •  Industrial Blockchain needs “pluggable” consensus What? Page 14 of 32
  • 16. Contents What Why How . . are Blockchain technologies ? . . is it relevant for our business? . . the Blockchain Landscape? Page 15 of 32
  • 17. Industrial Blockchain Benefits Reduce costs and complexity Improve discoverability Why? Trusted recordkeeping Shared trusted processes Page 16 of 32
  • 18. Why? Page 17 of 32 Blockchain – not for all . . . NEGATIVE Indicators 1.  Need high performance (millisecond) transactions 2.  Small organization (no business network) 3.  Looking for a database replacement 4.  Looking for a messaging solution 5.  Looking for transaction processing replacement
  • 19. How? Page 18 of 32 Patterns for Customer Adoption (1) INTERNAL LEDGER •  Ledger for internal reporting, audit and compliance, •  Consistent view of key business assets, •  Provenance, immutability & finality more important than consensus. •  Access to auditor and regulator (2) CONSORTIUM SHARED LEDGER •  Created by a small set of participants and consumers. •  Consistent real-time view of key information •  Share reference data between themselves (3) INFORMATION HUB •  A ledger set up in a single organization •  Sharing of information between participants (e.g. voting, dividend notification) •  Assets have information, not financial value •  Require provenance, immutability & finality. (4) HIGH VALUE MARKET •  Ledger for the transfer of high financial value Blockchain assets •  between many participants in a market. •  Requires all enterprise features of
  • 20. Why? Page 19 of 32 Use Case – Letter of Credit What? •  Bank handling letters of credit (LOC) wants to offer them to a wider range of clients including startups •  Currently constrained by costs & the time to execute How? •  Blockchain provides common ledger for letters of credit •  Allows bank and counter-parties to have the same validated record of transaction and fulfillment Benefits •  Increased trust •  Increase speed of execution (less than 1 day) •  Vastly reduced cost
  • 21. Why? Page 20 of 32 Use Case – Business to Business Contracts What? •  Buyer wants efficient way of converting a purchase order into validated, self executing contract updated to reflect the status of the supply.   •  Agreement must be visible to the buyer, the seller, banks, logistics partners and other stakeholders. How? •  Blockchain provides a shared record of the contract status which is updated as the contract progresses.   •  Available to all parties to the agreement, their banks and partners. Benefits 1.  increased efficiency and transparency across the supply chain. 2.  risk management improved through the near real time update of all contracts.
  • 22. Why? Page 21 of 32 Use Case – Smart Refrigerator ability to interact with business systems How? •  Blockchain to manage automated What? •  Value of connected smart devices limited by interactions with the external world •  ordering and paying for food to arranging for its own software upgrades and tracking its warranty.   Benefits 1.  business value from connected technology 2.  efficiencies in network and supply chains 3.  status transparent to all network members
  • 23. Why? Page 22 of 32 Use Case – Open, Trusted Supply Chain What? •  Consumers demanding transparency on where and how their products are made. •  EU requires more information about corporate supply chains, with penalties for non-compliance. How? •  Blockchain enable safe digital transfer of property across the end to end supply chain.  Benefits 1.  verifiable, preventing any party from altering 2.  efficiencies through greater transparency 3.  consumers can make informed purchases 4.  governments get reliable information
  • 24. Why? Page 23 of 32 Use Case – Aircraft Maintenance What? •  Provenance of each component part in complex system hard to track •  Manufacturer, production date, batch and even the manufacturing machine program. How? •  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
  • 25. Why? Page 24 of 32 Use Case – On Line Gaming What? •  Game player wants to trade “gold” earned in current game for the currency or assets of another game •  Use experience with the current game to put me ahead and not have to start cold in the new game How? •  Blockchain holds tokens of value shared across on line gaming platform Benefits •  Transparency to game player, game owners & infrastructure providers •  Efficiencies through elimination of intermediaries •  Increased trust for all involved parties.
  • 26. 27 Why? Page 25 of 32 •  Syndicated Loans •  Intra-bank settlement –  Real estate records –  Vehicle registrations –  Business license and ownership records –  Cross border remittances –  Mortgage verification –  Mortgage contracts (smart contract) •  Public Records •  Retail Banking•  Securities •  Trade Finance –  Bill of Lading –  Cross-currency payment –  Post-trade settlement –  Derivative contracts –  Securities issuance –  Collateral management Other Potential Use Cases include . .
  • 27. Contents What Why How . . are Blockchain technologies ? . . is it relevant for our business? . . the Blockchain landscape? Page 26 of 32
  • 28. © 2016 IBM Corporation Hyperledger Project §  Linux Foundation - announced 17th December 2015 §  New open ledger project to transform the way business transactions are conducted around the world §  Project members understand that an open source, collaborative development strategy supporting multiple players in multiple industries is required Enable adoption of shared ledger technology at a pace and depth not achievable by any one company or industry How? Page 27 of 32
  • 29. How? Page 28 of 32 As you’d expect with an emerging technology, the blockchain market is a rapidly evolving one. Analyst IDC has compiled a view of the blockchain landscape as it stood at the end of 2017, showing the major players, and outlining the current structure of the market. There are 72 companies listed in total: Covering four Tech layers (Identity management, Fabrics & DL platforms, Security, Payments, Smart contracts), Four Services categories (Blockchain as a service, Consulting and professional services, Consortiums/industry groups, Compliance), Four Industry applications (Natural resources, Financial transactions, Government & health, Supply chain & trade fnance),plus Regulators & agencies and Data provenance & notary.
  • 31. Summary Page 30 of 32 1.  Blockchain is a shared, replicated ledger technology 2.  Blockchain can open up business networks by taking out cost, improving efficiencies and increase accessibility 4.  Blockchain addresses an exciting and topical set of business challenges, which cross every industry 5.  Linux Foundation Hyperledger project developing open source, open standards shared ledger technology
  • 32. Page 30 of 32 Bonus
  • 33. Page 30 of 32 BonusFor You Blockchain is revolutionizing the way data and assets are traded. The technology is expected to have a huge impact on different sectors and industries. A Blockchain Developer must know one of the modern programming languages like Java or C++. These languages don’t just help create applications for blockchain, but also help learn contract-based or blockchain-based languages like Simplicity or Solidity. Useful Links: https://dzone.com/articles/blockchain-implementation-with-java-code https://developer.ibm.com/blockchain/