03 Blockchain mit IBM z Systems - Norbert Schädler · Source: [1] 2013 Global Digital Disruption Executive Study Q18. To what extent do you agree with the following statements about

Norbert Schädler, IT Architect, IBM Blockchain Compentence Center

07. – 08. November 2016 @ IBM z Systems Mainframe Event 2016

Blockchain

Why Blockchains now?

Tackling the challenges of our times

To create the experience being demanded by many markets, a new type of economic organization is required – the ecosystem

71% of executives believe consumers will demand more complete experiences1

64% of executives believe new business models will profoundly impact their industries2

Ecosystems are emerging, attracting new flows of value and economic activity

Source: [1] 2013 Global Digital Disruption Executive Study Q18. To what extent do you agree with the following statements about customer behavior and expectations today, and in five years? Rate on a scale of 1 to 5, where 1 = Strongly disagree and 5 = Strongly agree.[2] 2013 Global Digital Disruption Executive Study Q12: “Please rate the extent to which the following trends will have an impact on your business” (n = 1089)

Disruption is already here Change will only accelerate Ecosystems are emerging

10 November 2016

Time

Many business transactions:

§ are time sensitive

§ require much settlement andreconciliation time

§ are process-delay prone

Cost


§ include overheads frommultiple intermediaries

§ are costly to manage and execute

§ require extensive documentation

Risk


§ are ambiguous and non-verifiable

§ are prone to errors and tampering

§ have no single source of truth

©2016 IBM Corporation 10 November 20164

As a result of frictions many business transactions remain inefficient, expensive and vulnerable

Source: IBM Institute for Business Value analysis


Every participant keeps their own ledger updated with their transactions


An incident in one organization can propagate across the network



Each organization in thenetwork has complex silosthat require reconciliation



Each organization in thenetwork has complex silosthat require reconciliation

©2016 IBM Corporation

Parties in the property records network access different information, which is also proneto tampering


How blockchains propel us forward

Engineered for motion


Blockchains shift the paradigm from information held by a single owner to the lifetime history of an asset or transaction

Instead of messaging-based communications, the new paradigm is state-based: Information that was once obscure now becomes transparent

Blockchains use a replicated ledger shared by all participants



©2016 IBM Corporation

Cryptographically secure, the shared ledger is updated by consensus and becomes an immutable and indelible

record of all transactions

Transactions are validated by consensus and become indelible records of the transaction

Participants share a ledgerthat is updated with everytransaction



1 | Distributed and sustainableThe ledger is shared and replicated among participants. Blockchains are not owned by any one organization.

2 | Secure and indelibleCryptography ensures that network participants see only the parts of the ledger relevant to them, and that all transactions are authenticated and verifiable. If a transaction was in error, a new transaction must be entered.

3 | Transparent and auditableDue to participants having access to the same records,transactions are verified in real time

4 | Consensus-based and transactionalParticipants in the network must confirm that a transaction is valid. Achieved using consensus algorithms. Because business rules and smart contracts can be built into the platform at any time, blockchains can be extended beyond their original purpose, across an end-to-end business process and a wide range of activities in a business network.

5 | Flexible and orchestrated

Five key attributes enable building powerful business applications on a shared ledger



Full transformation value kicks in when a variety of industries and activities come together

Supply chains are prime examples of blockchain’s potential for transformation that spans industries

The value derived from something as fundamental as a blockchain-enabled bill of lading ripples out beyond the port of entry to span many industries


Reduces Time

Business transactions can be conducted in near real-time

SavesCost

Business networks caneliminate intermediaries and scale easily

MitigatesRisk

Business transactions become verifiable and auditable


Opens NewBusiness ModelsBusiness networks reshaped and profit pools are redefined

As industries grow blockchain use, fundamentals change and new business models enter the stage


New possibilities for business models

Towards perpetual motion


Where is the opportunity? Examining the Ecosystem

As the world became more connected, enterprises faced increasing difficulty competing as solo entities; a new economic equation favoring transparency and collaboration led to the emergence of ecosystems

Enterprises participate in multiple ecosystems, play different roles in different ecosystems and evolve their roles as ecosystems evolve

Many ecosystems have grown to be largely oligopolistic with few trusted intermediaries

Blockchains have the potential to create greater transparency in ecosystems, and also transform our notions of trust and ecosystem transactions



Where is the opportunity? Examining the Economy

Economic wealth is generated by the flow of value across marketplaces: value is created when assets can participate in efficient marketplaces

Economies across countries and industries are vastly different in how efficiently they create wealth

Many assets remain “dormant”: unable to participate in the creation of economic wealth due to inaccessibility of marketplaces or prohibitive transaction costs

Blockchains can vaporize transaction costs, enable more efficient marketplaces, and accelerate the flow of capital for more efficient creation of economic wealth


Putting blockchains to work for you

IBM‘s Point of View

Blockchains in practice

16Page© 2016 IBM Corporation

It‘s not...

Chart Source: Hype Cycle for Blockchain Technologies and the Programmable Economy, 2016Published: 27 July 2016, GartnerBlockchain — Don’t Believe In MiraclesQuote Source: The Technology Is Unlikely To Live Up To The Claims Made For ItPublished October 16, 2015, Forrester

Blockchain: Broad applicability but beware the hypeIdentified use cases by industry

4%

2% 2%3%

5%

8%

10%

15%

52%

Others

Education

Energy&Utilities

Retail

Healthcare

Government

Legal

Media

FSS

§ 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



Benefits1. 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

Provenance use case –Vehicle maintenance


Benefits1. 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

Immutability use case –Financial ledger


Benefits1. 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

Finality use case –Letter of credit

Letter of creditRepublic of A

Buyer’s bank issues LC and sends to seller’s

bankA Plus Bank

Bank B

Seller’s bank authenticates LC and credits Company B

Sales contractCompany B: Seller/beneficiary

Company A: Buyer/applicant

B-land

Buyer applies for LC


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


It takes a community: Hyperledger

A collaborative effort created 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.

https://www.hyperledger.org/


Linux Foundation’s Hyperledger Project

– Open Ledger Project announced December 17, 2015 with 17 founders, now over 80 members

– Hyperledger Project rebrand in February 2016

– 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, open standards, open governance

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

Technical Chair Chris Ferris/IBM

Contribution 44,000 lines of code in February 2016

Sprint to one codebase with unified thinking

Staged releases

www.Hyperledger.org

©2016 IBM Corporation 10 November 201625 25

IBM’s Point of View on Blockchain

§ Open source standard to lower adoption risk

§ Encourage Innovation through modular architecture

§ IBM Supports Linux Foundation’s Hyperledger project

q Enable more optimized forms of consensus to keep the ledger in sync

q Privacy, confidentiality, auditability, performance and scalability.

q Engage with governments and regulators to encourage the broad adoption of blockchain in industry

IBM Blockchain is conducting business in 2016 across three areas:1. 1. Community development of blockchain fabric (Hyperledger project)2. 2. Cloud deployment which expands Hyperledger with value added features3. 3. Client engagements and transformative solutions

•

• Ensure greater trust by provisioning only permissioned members and users

BLOCKCHAIN ≠ BITCOIN

BUILT IN THE

OPEN

PERMISSIONED

ENTERPRISE READY

IBM is building blockchains for business!

2016 Market Making Announcements with z Systems and LinuxONEWould you run your blockchain on a cloud that didn’t have these security features?

2626

What Differentiates z and LinuxONE over All Other Platforms

27

5 key differentiators 1. Secure key management — protects transaction keys and ensures

peers on the blockchain are not at risk of being compromised.

2. High Evaluation Assurance Level protection between

environments — enables blockchain peers to run in protected

environments isolated from other peers and other parties. This

prevents leaks into another party's environment through shared

memory or other key shared hardware.

3. Highly auditable operating environment — allows complete

auditing for all transaction logs to support forensics and compliance.

4. Crypto optimization — supports an environment that moves

hashing and the creation of digital signatures to optimized

accelerators

5. Protection from system administrators and root users—

blockchain operating environments protected from access by system

administrators and root users. These credentials could have been

falsely obtained by hackers. Hardware prevents malware installation.

Smart contract integration with SoR on z


IBM Blockchain Offerings

Docker

Hyperledgerfabric

IBM managed on IBM cloud self managed

Support for Hyperledger Fabric

Generally Availablehttps://hub.docker.com/r/ibmblockchain/fabric/

*.* any Docker environment

all running Hyperledger fabric:

IBM Blockchain Starterfor Developers

Public Betaprovision now on IBM Bluemix!

IBM Blockchain forHigh Security Business Networks

Generally Available

Available on IBM Bluemix!

High Security Business NetworkStarterStart writing chaincode in seconds

High performance and reserved capacity

Integrated dashboard, logs and tools Best in Industry security,

isolation and spec support

Proven Audit environment for compliance and forensics

Community samples, tutorials, and quickstarts

IBM offers technical support for x86, Power and System z


Starter PlanFour peer starter network with Developer dashboard, tools and samples

3

2

IBM Blockchain on Bluemix

Key Capabilities:Starter NetworkFour connected peers and a CA for a complete permissioned blockchain network with PBFT

Tools and SamplesDeploy, customize and utilize samples. Integrated tools for invoking fabric APIs and managing your deployment

IBM Beta

Developer DashboardDashboard for developer control of network activities, logs and monitoring

Fabric Version ManagementEasily manage the lifecycle of the network and stay current on Hyperledger fabric version updates


High Security Business Network PlanBusiness network running on dedicated high security compute

3

2

IBM Blockchain on Bluemix

Key Capabilities:Dedicated ComputeFour connected peers and a CA in an isolated partition on dedicated compute

SecureKey and HSMOn board HSM with tamper resistant cards providing up to FIPS 140-2 Level 4 security

IBM

Secure Service ContainerProtection from horizontal and vertical tampering with all code running in a secure virtual appliance

Performance OptimizedCrypto acceleration, high speed network all running on the worlds fastest Linux system


IBM Blockchain on Bluemix Plans

Starter High Securityfor Developers for Enterprise

4 peers and a Cert Authority ü üDeploy and test chaincode ü üDashboard with logs, controls, and APIs ü üSample apps with source code ü üIsolated environment on dedicated compute üOptimized performance and high speed network üAdvanced Security: HSM, Secure Service Container and more

ü


• Target Audience: Enterprises• List price of $10k per month for a 4 peer network hosted on IBM cloud

• 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• Partitioned peers have 10g network connectivity• Meets strictest requirements for Governments, Healthcare and Finance

High Security Business Network Plan


Key clients we’ve been working with using HSBN

Client Industry Solution (why blockchain)

IBM Global Finance Global Finance Dispute ResolutionManage disputes between business partners and suppliers

Global Trade Company Europe Global Trade Reduce Inefficiencies in Global TradeReplace paper bills of lading (describe goods)

Major Retailer USA Retail Supply Reduce efficiencies in Retail Supply Chain (joint with major goods supplier and major transportation company)

Everledger UK, High value assets Address Provenance, fraud: tracking high value assets with initial focus on the diamond industry.

Wells Fargo USA Banking Global Banking: Inter-bank Banking paymentreconciliation and settlement


• Target Audience: Enterprises • wanting an on-premises /self managed HLF network with technical

support• Customers with data residency requirements in a location not currently

serviced by IBM cloud

• Benefits and features include:• IBM certified images with additional tests run by IBM on community code• Docker Compose script to setup a blockchain network in a known,

supported configuration• IBM’s industry leading support available in different plans up to 24x7x365• Access to IBM deep expertise as a significant HLF contributor to reduce

risk in keeping your blockchain deployment up

Support Offerings for Hyperledger Fabric



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

Let’s Talk

BlockchainHands-on

First Project

Scale


Design Thinking(2 days)

Sprint 0(- 5 days)

Sprint 1( 2 weeks )

Sprint 2( 2 weeks )

Sprint N( 2 weeks )


Client

IBM

ProductOwner

Subject MatterExpert

Architect& Facilitator

UX-DesignerSubject MatterExpert

Blockchain Developer

Thank you!

Documents

03 Blockchain mit IBM z Systems - Norbert Schädler · Source: [1] 2013 Global Digital Disruption Executive Study Q18. To what extent do you agree with the following statements about