© 2016 IBM Corporation

Making Blockchain Real for Business

How we can help you

Esra UFACIK

esra@sg.ibm.com

Blockchain IOT Lead for

AP Systems

Businesses must carefully evaluate where blockchains provide the greatest gains

Limited value within the boundaries of one organization

Ecosystem participants have to agree on a standard

Risk of overregulation without coordinated control

May require large scale re-engineering

Blockchain considerations

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

5. Looking for transaction processing replacement

Transfer of high-value financial assets

Many participants in one market

Regulatory timeframes

Sharing of assets (voting, dividend notification)

Assets are information, not financial

Provenance, immutability and finality are key

Created by a small set of participants

Share key reference data

Consolidated, consistent real-time view

Real-time view of compliance, audit and risk data

Provenance, immutability and finality are key

Transparent access to auditor and regulator

High-Value

Market

Asset

Exchange

Consortium

Shared Ledger

Compliance

Ledger

Adoption patterns are emerging: an example from simple compliance ledgers to high-value markets

Source: IBM Institute for Business Value analysis

1How fast should

I move?

2Can we achieve

network-wide

standards?

3How can I scale with

new revenue models?

©2016 IBM Corporation 6 September 20167

We recommend businesses answer three questions to best extract value from blockchains

First movers and early adopters can position themselves for quicker returns

Dare to be first to market1 Identify the most compelling use cases by considering which frictions are holding

you back

Experiment in discrete areas where the attributes of blockchains drive rapid impact

Use design thinking to simplify the user experience and create agile proofs of concept to drive

rapid adoption

Collaborate broadly to achieve globally accepted standards

Success in blockchain adoption will depend onwho can build the strongest network

2 Blockchain innovation can permeate even faster than the internet did generating a potential advantage

for first movers

Explore the role of alliances and consortia and how profit pools might be redistributed, then decide on

your network role

Consider the blockchain as the new business environment and collaboration as the optimal way of

working, then consider with whom you should partner to create the optimal business network

Understand how blockchains can help your business profit and scale quickly

Scale with clear revenue models3 As business models are disrupted by blockchains, think through how you can make money in

new ways, like from consumption-based pricing, licensing and micro-charges and payments

Explore how new blockchain-based services and apps can replace or complement and scale existing

revenue models

Understand how blockchains will extract further value from other technologies, such as big data

analytics, the Internet of Things and cognitive computing

Blockchain for Business – Our Point of View

Community + Code

Linux Hyperledger Project

Open Source Code: Blockchain for business;

Consensus | ProvenanceImmutability | Finality

Open Governance – 40 member cross industry board

Cloud

IBM Blockchain

Blockchain managed service on IBM Cloud and z Systems;

Identity | Consensus | System Integration | Hardware-assist for Performance & Security

IBM Blockchain on Bluemix

Clients

Blockchain Solutions

Blockchain Garage

Making Blockchain real for business

Blockchain Garage; New York | London | Singapore | Tokyo

Blockchain Services Practice

Enable adoption of shared ledger technology at

a pace and depth not achievable by any one

company or industry

QUICK FACTS

Chairman: Blythe Masters/DAH

Executive

Director:Brian Behlendorf

Tech

Committee:Chris Ferris/IBM

Contribution:44,000 lines of code

in February 2016

Accept:

2Q IBM Open Code

accepted into

incubation

Sprint to one

codebase with

unified thinking:

Target 3Q release

www.Hyperledger.org

Linux Foundation’s Hyperledger Project

Linux Foundation project announced December 17,

2015 with 17 founders, now 40 members

The Hyperledger Project is a collaborative effort to

advance Blockchain technology by identifying and

addressing important features for a cross-industry

open standard for distributed ledgers that can

transform the way business transactions are

conducted globally

Open source and open standards-based

URL

19Page© 2016 IBM Corporation As of 13 June 2016

LINUX FOUNDATIONHYPERLEDGER

PROJECT

IBM BlockchainSOLUTIONS

Blockchain

BLUEMIX

SERVICE

ibm.com/blockchain/

IBM BlockchainON IBM CLOUD

IBM offerings supporting Hyperledger

Managed Service on IBM Cloud

Your private Blockchain network in 1-click

Learn with sample applications

Develop your own Smart Contracts

URL

IBM Blockchain on Bluemix

• Value:• Developers can stand up a

blockchain test network in under 2 minutes and quickly build & test an application on it. There are two plans — multitenant starter environment and high-security business environment.

• One IBM Blockchain Offering with two service plans

• Same IBM Cloud & Bluemix user experience

• IBM offers unique security and compliance differentiation for blockchain via high security plan

Starter

Plan

High Security

Plan

Client Acquires IBM Blockchain Service through Bluemix X X

Network Connections through Softlayer X X

Cloud Provisioning & Self Service Enablement X X

Service Management and Billing through Bluemix X X

Customer Support through Bluemix X X

Secure Service Container X

Highest levels of isolation in industry X

Compliance for highly regulated industries

(tamper proof keys in HSM)X *

Accelerated performance X

* for GA

23

Sample apps and tutorials for Blockchain

Sample applications and tutorials for IBM® Blockchain demonstrate how fundamental applications and chaincodes function in a blockchainnetwork. To learn more about the fabric code that is underpinning your blockchain network, visit the Docs section of the Linux Foundation's Hyperledger Project.

You can immediately deploy the Marbles, Commercial Paper or Car Lease demos to see chaincodeapplications in action. Keep reading to explore the Hello Chaincode tutorial.

URL

URL

High Security Infrastructure for Blockchain

IBM LinuxONE: A highly secure infrastructure for blockchain networks

Benefits and features include:– Hardware cryptographic accelerators

– Tamper-proof cards for key management

– Application environment isolation via Secure Service Containers, protects data and

applications even from system administrators

– World’s highest performance Linux-only system

– Meets strictest requirements for Governments, Healthcare and Finance

IBM Blockchain LinuxONE network test environment available on Bluemix

Security Performance Compliance Simplicity

• Protection against misuse of privileged user credentials: Blockchain operating environments and data are protected by secured service containers against access and abuse by root users, system administrator credentials and other privileged user access. These Blockchain instances are locked so they must deployed to system models configured to our high security settings.

• Malware protection: Blockchain data and software is protected from malware being installed.

• Protection of peers from one another: Blockchainpeers are able to run in protected, isolated environments to prevent deliberate or unintentional leakage of information from one party's environment to another.

• Key safety: Identity, communications, and data privacy are safeguarded by having all keys in a secure services container. For our general-availability release, enrollment key security will be further enhanced by implementing “secure key” using our tamper-resistant crypto-card.

• Hardware accelerators:

Crypto optimization

supports an environment

that moves hashing and

symmetric encryption to

accelerators and

optimizes digital

signatures to reduce

drain on CPU

performance.

• Highly auditable

operating environment:

Hardware and firmware

audit logs provide

information about any

critical actions done to

system such as replacing

hardware or changing

configurations. This

allows such changes to

be audited, including

verification of

unauthorized actions.

• Open-source

Hyperledger code along

with a single,

integrated stack.

IBM Blockchain high security business network service plan https://www.ibm.com/blockchain/bluemix.html

29 29

Additional security and privacy benefits

Benefit Value How

Prevent Edward

Snowden-type

attack

Protection against misuse of

privileged user credentials

Our differentiation is that IBM Secure Service Containers prevent system admins

with access to the hardware from disabling the restrictions as it is possible on

other environments:

• No access to the data store

• No ability to modify any of the code in the container

• All data leaving the container is encrypted

HOW: We do this by encrypting all data on the disk; only the machine hardware

has the keys—there are no keys accessible to privileged users. Only authorized

APIs are available (not the underlying software). For example on other systems,

system admins can disable SELinux on the Redhat Enterprise Linux, then get full

access to the system.

Data Privacy Participants in a business

network can’t see each other’s

private data

Because each peer in the network has a copy of all data from all parties, we do not

want the owner of each peer to be able to look at the data stored in the peer. The

container prevents the machine owner from peeking /viewing the raw data. The

only thing a peer owner can do is start or stop a peer.

HOW: All peer data and code is encrypted all the time. The peer owner does not

have the keys.

30

Consensus Algorithm

Cryptographic Protocols(authentication, security, non-repudiation,

restricted visibility, privacy/confidentiality,

….)

Smart Contracts

Shared Replicated Ledger

API Layer

Ap

p 1

Ap

p 2

Ap

p 3

. . .

.

Business Rules Engine(embedded business rules execution engine)

Smart

contrac

t stack

Blockchain

DB

In Memory (7M tx, 100 TB -> 100MB) - z

Hashing – z

Integrate/Connect/Build on top of

CICS/IMS/TPF/DB2/VSAM - z

Real Time Blockchain - z

Elliptical Curve Digital Signatures - z

“-z” Existing z hardware acceleration

Blockchain on z Systems & LinuxONETM

Enterprise Public Key Crypto Standard 11 (PKCS 11) Compliant

Federal Information Processing Standard (FIPS) 140-2 Compliant

Optimized communication between blockchain/z peers

Optimized communication between blockchain/z and z business applications

Smart

Contracts

Shared Ledger

Up to 30x improvement with

Linux on z Systems technology

Up to 10x improvement with

Linux on z Systems technology

Infrastructure matters more than ever with Blockchain: Sustained performance

Protocol REST

Programming

Language

Database

Container

Linux

Virtualization

IBM z Systems

GOLang 1.6rc2 linux/s390x

RocksDB 5.4.0

Docker 1.8.0.3

Suse SLES12 SP1Packages: gflags 2.0 (from tar file), snappy 1.1.1 (from tar file), zlib-devel

(from distrib), libz1 (from distrib), libbz2-devel (from distrib)

z/VM 6.3, Dirmaint, RACF

4x IFL(SMT2), 8GB

4x CPACF for Crypto

LAB Environment

Yellow Network

(OpenVPN)

Open Block Chain

Hyperledger Stack on LinuxONE

Bluemix Blockchain Garages

URL

URL

URL

URL

1. Discuss Blockchaintechnology

2. Explore customer business model

3. Show BlockchainApplication 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 or face to face Remote or face to face Face to face Face to face

Free of charge Free of charge For fee For fee

Let’s

TalkBlockchain

Hands-onFirst

ProjectScale

Engagement model overview

© 2016 IBM Corporation

Thank you!