What is blockchain?
Blockchain is a shared immutable ledger for recording the
history of transactions.
A business blockchain, such as IBM Blockchain and the
Linux Foundation’s Hyperledger Project, provides a
permissioned network with known identities.
Stored in a
Open to all
in the network
Blockchain is a technology that uses the Internet to
make the sharing of data and process vastly more
efficient and secure
• Public blockchains • Blockchains for business
There are different types of blockchain
All aim to provide irrefutable proof of a set of transactions
• Proof of work
Two (or more) parties want to exchange
assets, but the process is manual & time-
consuming (possibly due to lack of trust, different
viewpoints / requirements/
and Blockchain Solution:
A shared, secure, synchronized and stable record of
transactions, called a ledger.
This provides: Consensus, assured provenance,
Blockchain provides a solution for complex, multi-party, “high-friction”
Ledgers, Transactions and Contracts
• Ledger: an important log of all transactions
– Describes the inputs and outputs of the
• Transaction: an asset transfer between participants
– Matt gives a car to Dave (simple)
• Contract: the conditions for a transaction to occur
– If Dave pays Matt money, then car passes from
Matt to Dave (simple)
– If car won't start, funds do not pass to Matt (as
decided by third party arbitrator) (more complex)
What are the computing concepts behind blockchain?
• Linked List
h(abc) = 7859
h(h(h(abc))) = 1859
h(ghi+h(def+h(abc))) = 5783
abc def ghi X
h(abc) = 7859 h(def + 7859)
h(ghi + 3785)
Construction of a blockchain
Some examples of consensus algorithms
Proof of stake
Proof of work
The transaction data is represented as
The block is
broadcast to all in
Those in the network
approve the transaction
is valid (using consensus
The block is added to the
chain which provides a
permanent, immutable and
transparent record of the
Someone initiates a
The transaction is
Local Development Environment
• A local setup is a convenient way to begin development and set up a business network on your machine.
• Scripts for Windows, Mac OS, and Ubuntu are provided by both Hyperledger Fabric and Hyperledger Composer.
Set up your IDE
Git Go 1.9 Nodejs 8.x Docker 17.x Docker-
IBM Blockchain Platform IDE with VSCODE
• VSCODE Extension for developers
– Mac, Linux & Windows
• Smart contract & application
– Code, package, deploy, test, debug
• Any Hyperledger Fabric deployment
– Close integration with IBP
• Works with local and remote networks
• Start for free, S&S from IBM
– Download from Marketplace • Try out FabCar & Commercial Paper samples
• Local network and IBM Blockchain Platform beta!
Create & manage smart contracts,
applications & networks
Comprehensive cloud &
Introducing IBM Blockchain Platform
Build, operate and grow Hyperledger Fabric networks
Container virtualization &
Endorser & Committer
External system calls into blockchain network directly.
Blockchain publishes events.
External system publishes events.
Blockchain calls out to existing systems.
Integrating with existing systems
• Visual tool for wiring together the
Internet of Things
• Connect to hardware devices, APIs
and online services
• Pre-built nodes available for
Internet of Things (IoT) devices can
send data to and invoke smart contract
transactions on IBM Blockchain
Platform or on the open-source
Hyperledger blockchain ledgers.
IoT on Blockchain
Good use-case or not?
• Identifying a good use-case is never easy, but there should always be:
1. A business problem to be solved
• That cannot be more efficiently solved with other
2. An identifiable business network
• With Participants, Assets and Transactions
3. A need for trust
• Consensus, Immutability, Finality or Provenance
What makes a good use-case?
Is there a
Is there a
of truth ?
of the asset
Common thoughts of the architect
There is not a single recipe for identifying good
blockchain use cases.
No algorithm or decision tree can replace the search of
This is not an exhaustive list but represent some of the
more common questions architect will have.
1. What is the specific business problem / challenge that the first project will address?
2. What is the current way of solving this business problem?
3. Assuming the business problem is large, what specific aspects of this business problem will be addressed?
4. Who are the business network participants (organizations) involved and what are their roles?
5. Who are the specific people within the organization and what are their job roles?
6. What assets are involved and what is the key information associated with the assets?
7. What are the transactions involved, between whom, and what assets are associated with transactions?
8. What are the main steps in the current workflow and how are these executed by the business network participants?
9. What is the expected benefit of applying blockchain technology to the business problem for each of the network
10. What legacy systems are involved? What degree of integration with the legacy systems is needed?
Sample questions to refine the use case:
• First use-cases are even more difficult to identify!
1. A limited scope, but still solves a real business problem
• Minimum Viable Product in a few weeks of effort
2. A smaller business network
• Usually without requiring regulators and consortia
3. Allows for scaling with more participants and scenarios
• Consider shadow chains to mitigate risks
Start small, succeed and grow fast!
What about first use-cases?
Financial Public Sector Retail Insurance Manufacturing
• Trade Finance
• Cross currency
• Citizen Identity
• Medical records
• Medicine supply
• Supply chain
• Risk provenance
• Asset usage
• Claims file
• Supply chain
• Product parts
Some examples by (selected) industry
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,
• Often funded by members of a
• Provide technical advice on
• Encourages best practice by
making recommendations to
• In financial markets, takes buy-side
and sell-side to provide liquidity
• More generally, the organization
- Creates a new good or service,
and business process (likely)
- Creates a new business process
for an existing good or service
1. Trust increased, no authority
2. Improvement in
3. Recalls "specific"
rather than cross fleet
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
1. Lowers cost of audit and
2. Provides “seek and find” access
to auditors and regulators
3. Changes nature of
passive to active
What • Financial data in a large organization dispersed
throughout many divisions and geographies
• Audit and Compliance needs indelible record of all
key transactions over reporting period
How • Blockchain collects transaction records from diverse
set of financial systems
• Append-only and tamperproof qualities create high
confidence financial audit trail
• Privacy features to ensure authorized user access
Audit and compliance
1. Increase speed of execution
(less than 1 day)
2. Vastly reduced cost
3. Reduced risk,
e.g. currency fluctuations
4. Value added services,
e.g. incremental payment
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 all counter-parties to have the same validated
record of transaction and fulfillment
Letter of credit
Letter of credit
Republic of A
Buyer’s bank issues
LC and sends to
Bank A Bank B
Seller’s bank authenticates
LC and credits Company B
Trade Finance Pre and Post Trade Complex Risk Coverage Commercial Real Estate
Identity/ Know your customer (KYC) Unlisted Securities / Private Equity Funds Loyalty Program Mgt. Distributed Energy & Grid Mgt.
Medical Health Data Exchange Anti-Fraud & Port Mgt. Carbon Credit Mgt. Asset Tracking
Supply Chain & Logistics Food Safety Audit Digital Rights & Copyright Mgt.
Typical approach to projects
2. Explore customer
3. Show Blockchain
2. Hands on with
3. Standard demo
1. Design Thinking
workshop to define
2. Agile iterations
1. Scale up pilot or
Scale out to new
2. Business Process
• Trade finance platform:
backed by a consortium of
major international banks
• Full function:
enables accurate trading
posture information, order to
settlement control, risk
coverage, track and trace
• Near-real time:
exchange of information
Allows buyers to discover
trusted sellers and vice-versa
Re-imagining digital business processes
• Connects the ecosystem:
brings together ports,
terminals, ocean carriers,
government authorities, etc
• Drives true information
sharing: real-time and
seamless actionable insight
• Fosters collaboration and
trust: automate cross-org
• Shared visibility and shared
state for shipments
• Manage quality risk:
enable rapid, low cost, food
• End to End transparency:
data sharing extends beyond
'one up, one down’!
• Trust and Audit:
ensure provenance with
easily trusted, auditable
• Consumer confidence:
communicate with end
• 24x7 payments:
payment support regardless of
size, origination, destination or
• Higher visibility:
for streamlined transactions
with reduced disputes and
• Regulatory compliance:
enhanced through improved
• Secure network:
with interaction and eligibility
criteria & robust access control