Blockchain for Business

1. Blockchain for Business
Ahmad Gohar, Executive Technical Specialist
@ansgohar
Labib Farag, Blockchain Tech. Lead Specialist
@labibfarag
EED 2021 | IEEE | October 2021

2. Agenda
What is
Blockchain
Blockchain for
Business
Technical
Overview
Development
Resources
Hands-on
Development

3. 3

4. 4
What is Blockchain?
Database
SQL
NOSQL
Blockchain
© 2019 IBM Corporation

5. 5
Shared Ledger
© 2019 IBM Corporation

6. 6
New block
added!
Consensus
© 2019 IBM Corporation

7. 7
Immutability
© 2019 IBM Corporation

8. 8
Immutability
© 2019 IBM Corporation

9. 9
Bitcoin
Ethereum Ripple
R3 Corda Hyperledger
Fabric
© 2019 IBM Corporation

10. 10
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.
Blockchain

11. 11
Blockchain
for
Business
Shared,
replicated,
permissioned
ledger
Smart
contracts

12. 12
Blocks of
information
Stored in a
chain
Secure and
tamper proof
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

13. • Public blockchains • Blockchains for business
There are different types of blockchain
All aim to provide irrefutable proof of a set of transactions
• Assets
• Identity
• Endorsement
• Cryptocurrencies
• Anonymity
• Proof of work
≠

14. What is
Enterprise
Blockchain?
4
© 2019 IBM Corporation

15. 5
Accountability Privacy Scalability Security
What is Enterprise Blockchain?
© 2019 IBM Corporation

16. 6
Accountability Privacy Scalability Security
Hyperledger Fabric powers IBM Blockchain Platform
Hyperledger Fabric V2.2
© 2019 IBM Corporation

17. 17
Bank
record
s
Party A’s
records
Party C’s
records
Auditor
records
Party B’s
records
Party D’s
records
Problem…
Two (or more) parties want to exchange
assets, but the process is manual & time-
consuming (possibly due to lack of trust, different
viewpoints / requirements/
standards/ etc.)
and Blockchain Solution:
A shared, secure, synchronized and stable record of
transactions, called a ledger.
This provides: Consensus, assured provenance,
immutability
Blockchain provides a solution for complex, multi-party, “high-friction”
processes.

18. 18

19. 19
Ledgers, Transactions and Contracts
• Ledger: an important log of all transactions
– Describes the inputs and outputs of the
business
• 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)

20. 20
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
abc
def +
7859
ghi +
3785
X
h(abc) = 7859 h(def + 7859)
= 3785
h(ghi + 3785)
= 5783
•Hash functions
•Hash chains

21. Construction of a blockchain
https://hackernoon.com/how-does-blockchain-technology-work-ceeeee47eaba

22. 22
Blockchain consensus
• Keeping nodes up-to-date
• Fixing any nodes in error
• Ignoring all malicious nodes
before
after
CONSENSUS
abc def
abc
abc abc
abc XYZ
XYZ

23. 23
Some examples of consensus algorithms
Proof of stake
Proof of
Elapsed Time
PBFT
based
Proof of work
Kafka /
Zookeeper
Solo /
No-ops

24. 24
The transaction data is represented as
a block
2
The block is
broadcast to all in
the network
participant
3
Those in the network
approve the transaction
is valid (using consensus
algorithms)
4
The block is added to the
chain which provides a
permanent, immutable and
transparent record of the
transaction
5
Someone initiates a
transaction
1
The transaction is
complete
6
Transaction Lifecycle

25. 25
How Blockchain Works

26. Local Development Environment

27. 27
Deployment Scenarios for Hyperledger Fabric and Composer
Docker host SaaS
Kubernetes Cluster

28. 28
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.
Install the
Hyperledger
Composer CLI
tools
Install
Hyperledger
Composer
Playground
Set up your IDE
(optional)
Install Docker
images
Install
Hyperledger
Fabric
Prerequisites:
Git Go 1.9 Nodejs 8.x Docker 17.x Docker-
compose 1.12+

29. 29
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!

30. 30
Advanced tooling
Create & manage smart contracts,
applications & networks
Open technology
Hyperledger Fabric,
Containers, Kubernetes
Deploy anywhere
Comprehensive cloud &
on-premises options
Introducing IBM Blockchain Platform
Build, operate and grow Hyperledger Fabric networks
Developer
tools
Operator
tools
kubernetes
Kubernetes
on
prem
IBM
Kubernetes
Service
Container virtualization &
orchestration
Multi-cloud deployment
kubernetes

31. 31
Blockchain
developer
Smart
Contract
submits
develops
develops
recorded
accesses
event
emits
emits
D
Ledger
‘get’, ‘put’, ‘delete’
Client
Application
SDK
!
!
World state
block
txn txn txn
Blockchain
Peer
event
How applications interact with the ledger

32. 32
Endorser & Committer
Peer Nodes
…
External system calls into blockchain network directly.
Existing
systems
Existing
systems
Transform
Blockchain network
Blockchain publishes events.
External system publishes events.
Event
Event
Blockchain calls out to existing systems.
Integrating with existing systems

33. 33
Node-RED
• Visual tool for wiring together the
Internet of Things
• Connect to hardware devices, APIs
and online services
• Pre-built nodes available for
Hyperledger Composer
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

34. What makes a good blockchain use
case?
34

35. Good use-case or not?
35
Dispute
resolution
Know Your
Customer
Track Your
Child
Electronic
Medical
Records
Holiday
Tracking Tool
Food
Provenance

36. • Identifying a good use-case is never easy, but there should always be:
36
1. A business problem to be solved
• That cannot be more efficiently solved with other
technologies
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?

37. Is there a
common
business
problems?
Is there a
business
network?
Are there
trust issues?
Issue caused
by multiple
version
of truth ?
Business
benefits
understood?
Clear definition
of the asset
being
transacted?
Confidentiality
and privacy
concerns?
Can traditional
technologies
achieve the
same results
and benefits?
37
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
innovative ideas.
This is not an exhaustive list but represent some of the
more common questions architect will have.
…

38. 38
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
participants?
10. What legacy systems are involved? What degree of integration with the legacy systems is needed?
Sample questions to refine the use case:

39. • First use-cases are even more difficult to identify!
39
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?

40. Various type of blockchain projects
and typical use case
40

41. 41
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
Some examples by (selected) industry

42. 42
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

43. 43
Benefits
1. Trust increased, no authority
"owns” provenance
2. Improvement in
system utilization
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
government regulators
Example:
Supply chain

44. 44
Benefits
1. Lowers cost of audit and
regulatory compliance
2. Provides “seek and find” access
to auditors and regulators
3. Changes nature of
compliance from
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
Example:
Audit and compliance

45. 45
Benefits
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
Example:
Letter of credit
Letter of credit
Republic of A
Buyer’s bank issues
LC and sends to
seller’s bank
Bank A Bank B
Seller’s bank authenticates
LC and credits Company B
Sales contract
Company B:
Seller/beneficiary
Company A:
Buyer/
applicant
B-land
Buyer applies
for LC

46. Example Use-Cases
46
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.
Northern
Trust

47. Process of selecting a good use-case
47

48. Typical approach to projects
48
1. Discuss
Blockchain
technology
2. Explore customer
business model
3. Show Blockchain
Application demo
1. Understand
Blockchain
concepts &
elements
2. Hands on with
Blockchain
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
Let’s
Talk
Blockchain
Hands-on
First
Project
Scale

49. 49
Trade
Finance
Universal
Payments
Global
Trade
Identity
Healthcare
Bank
Guarantees
Food
Government Distributed
Energy
Clearing &
Settlement
Provenance
Unlisted
Securities
Insurance
IBM is making blockchain real for
business with cross-industry solutions
and over 100 active networks

50. 50
• 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
options
• Near-real time:
exchange of information
• Discovery:
Allows buyers to discover
trusted sellers and vice-versa
Re-imagining digital business processes
World Wire
• 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
business processes
• Shared visibility and shared
state for shipments
• Manage quality risk:
enable rapid, low cost, food
recalls
• End to End transparency:
data sharing extends beyond
'one up, one down’!
• Trust and Audit:
ensure provenance with
easily trusted, auditable
records.
• Consumer confidence:
comprehensively
communicate with end
consumer
• 24x7 payments:
payment support regardless of
size, origination, destination or
asset type
• Higher visibility:
for streamlined transactions
with reduced disputes and
reconciliation needs
• Regulatory compliance:
enhanced through improved
transparency
• Secure network:
with interaction and eligibility
criteria & robust access control

51. 51
Hype Cycle for Blockchain 2021

52. 52
IBM Digital Nation Africa
https://developer.ibm.com/digitalnation/africa/

53. 53
IBM Digital Nation Africa

54. Thank you
Ahmad Gohar
Labib Farag
www.ibm.com/blockchain
developer.ibm.com/blockchain
www.hyperledger.org