Making Blockchain Real for Business · Financial Government Healthcare Insurance Manufacturing Letter-of-Credit Land Registry Medical records Claims processing Supply chain Cross

1Page© 2017 IBM Corporation© 2017 IBM Corporation

Making Blockchain Real for Business

Inspirations from Real World Use Cases & Deployments

[email protected]


Solving For Fundamental Problems of:

a. Time

&

b. Trust

Blockchain technology applied in various industries

Financial Government Healthcare Insurance Manufacturing

Letter-of-Credit Land Registry Medical records Claims

processing

Supply chain

Cross currency

payments

Vehicle Registry Medicine supply

chain

IoT integration

for policy

monitoring

Product parts

Mortgages Citizen ID Maintenance

tracking

Cross Industry

Shared reference data

Internal financial ledger

Audit and compliance

enablement

Regulatory view

Improved efficiencies

Innovation

Digital property

management

Client Examples

Trade Finance

BAMLHSBC

Identity management

CréditMutuel Arkéa

Food Safety

Low liquidity securities trading and settlement

JapaneseStock

Exchange

Settlements through virtual currency

MizuhoFinancial

Channel Financing

IBMGlobal

Financing

Contract Management

BTMU

FX Netting

CLS

Reward points management/IoT

CUP

Open Government

As Government agencies increasingly collaborate

with private sector and NGOs to drive economic

growth and vitality, the need for transparency and

trust in data becomes all the more important.

Cyber Security and Privacy As cyber attacks on Government agencies increase, security of Government systems

and data becomes fundamental to the Governments ability to provide safe

communities and protected critical infrastructure.

Regulations and Compliance Governments need to minimize regulations to enhance economic vitality while at the

same time ensure regulatory compliance. Governments will not only create but also

need to manage the implementation of policy changes at speed.

Three Government imperatives are underpinning the vision

McKinsey estimate that 7 sectors alone could generate more than $3tr-$5tr annually in additional value from Open Data

Cyberattacks Against the US

Government Up 1,300% Since 2006. Data

manipulation is biggest concern

20,642 New US Federal

Regulations Added in

2008-2016

The ability to share data is fundamental to Open Government

but current technologies create unique challenges

Data exists in silos

across stakeholders -

difficult to present it in

a single view.

The same data object

exists in multiple

systems with

different

identification

attributes so it is hard

to create a unique

identity for an

individual.

The sharing of data

makes that data

vulnerable to cyber

attacks, corruption

and misuse

Privacy can no longer

be assured as some

data is now outside of

Government control.

Changes to policy are

slow to implement

Auditing regulatory

compliance is costly

and time consuming

leading to incidences

of fraud and abuse

By 2018, governments have identified top

areas of investment in blockchains

Source: IBM Institute for Business Value analysis,

Asset

managemen

t

Regulatory

compliance

100% | 88% 100% | 90% 100% | 82% 100% | 92% 97% | 86% 97% | 91% 97% | 86% 93% | 85%

Identity

management

Contract

management

Financial

transaction

s

Voting

systems

Citizen

services

Borderless

services

Trailblazers All other governments

Trailblazer investment priorities


Blockchain Technology Landscape

9Page© 2017 IBM Corporation

Blockchain vendors – Offer specialization

Each vendor – Offers specialization

– Variant trust systems – Consensus,

Mining, Proof of Work, etc.

– Lock into single trust system

– Purpose built infrastructure components

for a specialized use case

– Design being field tested in form

of POCs

– Crates fragmented blockchain models

for enterprise

RippleNetwork

Blockchain Fabric

RippleTrust System

Purpose Build Application

EthereumNetwork

Blockchain Fabric

EthereumTrust System


Blockchain Variant Network

Blockchain Fabric

Consensus Variant



App A

Chain A

App B

Chain B

App C

Chain C

App D

Chain D

Inter-ledger

Inter-ledger

pBFT BFT PoW/PoS RAFT Custom

Crypto Encryption MgmtBlock / ledger

Blockchain

Trust Systems

Blockchain

Fabric /

Infrastructure

Hardware

Considerations

Application

Interface

Business

Domain

Trust

Intermediary

IBM

Blockchain

Platform

How can IBM Blockchain be different?

How do we differentiate?

– Open design

– Providing flexibility with pluggable and modular trust system

– Open for specialized blockchains, e.g., Ripple

– Trust intermediary – a trust system provisioning layer

– Enterprise blockchain platform concept

– Separate business domain with technology that supports it


Blockchain – Transaction processing vehicle

Enterprise integration considerations

– Integration with incumbent SoR

– Compliance and regulatory requirements

– Data formats – ISO20022, EDI 820 etc.

– Blockchain to enable transaction processing, and preserve the enterprise SoR systems

– Design intent

• Path of least disruption

• Accelerate enterprise adoption

App A

Chain A

App B

Chain B

App C

Chain C

App D

Chain D

Inter-ledger

Inter-ledger

pBFT BFT PoW/PoS RAFT Custom

Crypto Encryption MgmtBlock / ledger

EnterpriseChain

Connectors

Enterprise

Transaction

System /

SoR

Compliance

BI / Data /

Analytics

Chain as Transaction Processing

System


What would enterprise chain infrastructure look like?Integrated enterprise will need more

than one specialized use case

– Driving synergies between blockchains

– Invisible blockchain infrastructure

– Inter- and Intra-enterprise connections

– Concept introduction

• Interledger

• Intraledger

– Cross the trust systems for transactions

– Fractal visibility of ledger data

– Enterprise visibility – control systems

Enterprise Chain

Infrastructure

Payments

Mortgage Initiation

Securitization

Trade Finance

Crowdfunding

Identity

Partner

Enterprise /

DAO

Interledger / ILP

Conditional Contracts



Thank you!


Enterprise Systems

BI / Data

Enterprise Systems

BI / Data

Vision – ‘Interprise Synergy’Enterprise chain infrastructureDesign that enables new

business models

– Invisible enterprise chain

infrastructure will provide foundation

– Use of connectors, APIs to enable

incumbent systems chain aware

– Conditional contracts between

chains – ‘Interprise Synergy’

– New business (e.g., P2P

lending, crowdfunding)

solely on blockchain

Enterprise Chain

Infrastructure

Payments

Mortgage Initiation

Securitization

Trade Finance

Crowdfunding

Identity

Partner

Enterprise /

DAO

Interledger / ILP



Enterprise Systems

BI / Data

Enterprise Systems

BI / Data

Enterprise Systems


Blockchain security – Layered approach

Trust System Layer – Consensus

Blockchain Middleware Layer

Physical – IT Infrastructure Layer

pBFT, BFT, PoS,

PoW, Ghost, Paxos,

RAFT, Custom

HSM, EAL,

Crypto Accelerator,

Private Cloud,

Isolated Network,

EAL5, etc.

Ledger, SSL, Crypto

Modules, Sub Ledger,

Encryption, ECC,

ECDSA, ECDH,

ECIES, etc.


Enterprise Impact

and Industry Impact

Meaningful issues

should revolve

around significant

costs to enterprise

and industry

Use Case

Identification

Business

Blueprint

Technology

Blueprint

Enterprise

Integration

Existing business

process is distilled

down to blockchain-

based model

Reinventing the

business based on

a trust system

Technology to align

with the business

imperatives

Technology design

decisions and

deployment options

Integration with

down stream

transaction systems

reflecting on critical

business systems

First

Project

Path to enterprise adoption


HSBC, Bank of America, IDA Trade Finance - Letter of Credit

ABN AMRO Financial Restructuring & Recovery

Crédit Mutuel Arkéa Consortium Shared Ledger

Japan Exchange Group (JPX) Post Trade

Mizuho Digital Currency

IBM Global Finance Shadow Chain for Dispute Resolution

Everledger Diamond provenance

Bank of Tokyo – Mitsubishi UFJ Business Partner Contracts

CLS Bilateral netting service

UBS Digital trade finance

IBM & Hyperledger – Selected references

Documents

Making Blockchain Real for Business · Financial Government Healthcare Insurance Manufacturing Letter-of-Credit Land Registry Medical records Claims processing Supply chain Cross