blockchain with hyperledger (public version)

© CloudCorporation 1IBM CONFIDENTIAL

Presented by:

April 2016

Benjamin Fuentes

Blockchain

© IBM Corporation / Confidential 2

Introduction

But not only …

Why is everyone talking about Blockchain?


Introduction

Blockchain = Bitcoin?

One blockchain to rule them all?

Can I be totally anonymous on the network?

Is Blockchain a business ready technology?

Is Blockchain an open door to illegal markets? (=>Silk Road Affair)

Do Smart contracts a legal value?

Will Blockchain replace the Dollar?

Will Blockchain replace Stock Markets and (Central) Banks?

Will Blockchain replace Governments?

Will Governments kill Blockchain?

Frequently Asked Questions


Definitions

A block chain or blockchain is a distributed database, introduced by Bitcoin (2008) on Satoshi Nakamoto’s white paper, that maintains a continuously-growing list of data records that each refer to previous items on this list and is thus hardened against tampering and revision. Distributed systems answer to a problem called Byzantine Generals’ Problem described by Leslie Lamport (1982).

PERMISSIONED / PRIVATEPERMISSIONLESS / PUBLIC

It distributes identical copies of a ledger, but only to a limited number of trusted participants. As the network may have an owner(s), this methodology is better suited for applications requiring simplicity, speed, and greater transparency.

It allows anyone to contribute data to the ledger with all participants possessing an identical copy of the ledger. Since there is no single owner of the ledger, this methodology is more suitable for censorship resistant applications (e.g. Bitcoin)

Mesopotamian ledger

Blockchain


Definitions

• Don’t trust anyone! => slower (as need for waiting for consensus to validate a block and get an agreement on the network)

• Need a magic anti-hacking mechanism => need miners to maintain the network

• If more than 51% of the network is controlledby one group then it could be hacked• On-chain assets• Censorship resistant

• Trust everyone! => faster (only need validators on the network for an agreement)

• Need a central administrator to control entry to the network

• Off-chain assets• Better irreversibility and control

PROOFOFWORK

Permissionless vs Permissioned BlockchainsImplications and differences

PERMISSIONLESS / PUBLIC PERMISSIONED / PRIVATE


Definitions

PBFT & Zyzzyva

RAFTPAXOS

Mencius

A fundamental problem in distributed computing and multi-agent systems is to achieve overall system reliability in the presence of a number of faulty processes. This often requires processes to agree on some data value that is needed during computation.Consensus algorithms are used by a network to agree/validate on a computed result.

• TerminationEvery correct process decides some value.• ValidityIf all processes propose the same value v, then all correct processes decide v.• IntegrityEvery correct process decides at most one value, and if it decides some value v, then v must have been proposed by some process.• AgreementEvery correct process must agree on the same value.

Consensus


Definitions

Creation Phase Execution Phase

contract mortal { /* Define variable owner of the type address*/ address owner; /* this function is executed at initialization and sets the owner of the contract */ function mortal() { owner = msg.sender; }

Block n New block

LOGIC CODE

Block Block Block

events

Actions/executions

Smart contracts are computer protocols that : • facilitate and verify• enforce the negotiation• performance of a contract• make a contractual clause unnecessary

Smart contracts

Condition has been validated

here


IBM on Hyperledger

Hyperledger (or Hyperledger project) is a cross-industry collaborative effort to createblockchain-based open standard for distributed ledgers for globally conducted business transactions. The project has been started by Linux Foundation and backed by technological, financial, banking and supply chain companies worldwide.

The project aims to create an open-standard, public, decentralised public ledger based on blockchain technology to advance worldwide business transaction processing in terms of cost-effectiveness, speed and traceability.

Founding members of the initiative represent a diverse group of stakeholders:

• ABN AMRO• Accenture• ANZ Bank• Blockchain Ltd• BNY Mellon• Calastone• Cisco

• Deutsche Börse Group• Digital Asset Holdings• Fujitsu Limited• Guardtime• Hitachi• Wells Fargo

• CME Group• ConsenSys• Credits• The Depository Trust

& Clearing Corporation (DTCC)

• CLS

On Feb. 2nd 2016, IBM committed first 44K lines of code on

Github

• IBM• Intel• IntellectEU• J.P. Morgan• Red Hat• SWIFT

• NEC• NTT DATA• R3• State

Street• Symbiont• Vmware


IBM on Hyperledger Find Hyperledger on Bluemix

1. Click on “CATALOG”

2. Search “Blockchain” or scroll down the list


IBM on Hyperledger

SamplesSwagger APIBluemix Service

Deploying Marbles DemoOn Bluemix

Bluemix Blockchain : Service, API, Samples

A swagger API is available for each Blockchain project using the Bluemix service


IBM on Hyperledger

Advantages • Help implement a layer over the Blockchain network using Swagger API or a JS client• Easily add/remove new nodes (coming soon)• Easily deploy a worldwide network• Help on DevOps tasks, monitoring• Use Bluemix as a PoT environment and then deploy the network locally • (Detailed documentation is coming)

Prerequisites• Go language is needed for chaincode development (but Java and Javascript are on the pipe!)

Disadvantages• The service is still experimental (limited to 2 peers)

Remaining QuestionsThe Blockchain is a distributed system based on different peers on the network,not all are coming from the same platform owner … so how to sell it on a cloud like Bluemix (that is centralized by nature)?

Why building a Blockchain on Bluemix?


IBM on Hyperledger

Blockchain infrastructure does not replace company clouds, it is a democratized cloud between peers. This virtual network of decentralized computers are bound together with blockchain’s consensus rules where some logic code could be executed (like smart contracts)

In charge of the platform

In charge of auditing

Add/Feed executable logic code into the blockchain

ACTIVE MEMBERS

AUDITORS

BLOCKCHAINPROVIDER

ChainCode

ChainCode

Entering a new shape of infrastructure

One part of the network could be on-premise peersBilling based on logic code execution


Market Picture

Blockchain DUBLIN

HACKCOIN ATHENS

HACKCOIN MALAYSIA

HACKCOIN LONDON

WanXiang - Deloitte Blockchain hackathon

SHANGHAI

FinTech weekLONDON

Consensus

NYC

Blockchain visionPARIS

ETHEREUM Meetup LONDON

Arctic chain HackathonSWEDEN

Bitcoin Hackathon MIAMI

HACKCOIN MUMBAI

HACKCOIN HONG-KONG

GtecBERLIN

Chainthon ATHENS

DbsSINGAPOUR

Blockchain Trade Show TORONTO

Business Blockchain Conf TORONTO

Money 20/20COPENHAGEN

COINFESTWORLDWIDE

Blockchain Conf SAN FRANCISCO

Blockchain weekBARCELONA

Blockchain Summit ISLAND

Bitcoin Conf RUSSIA

Keynote2016DUBAIAdcca

SYDNEY

SIX Hackathon LONDON + ZURICH

Events : Hackathon, Chainthon, Conferences

EcoD participation!

Europe strong activity


Market Picture

Gennaro CuomoIBM Fellow

Craig YoungSWIFT CTO

Todd McDonaldR3 COO, cofounder

Blythe Masters(Board Chair)Digital Asset Holdings

Chris Ferris (TSC Chair)IBM Distinguished Engineer

Vitalik ButerinCreator, founder

Ming ChanExecutive Director

Jeffrey WilckeCofounder

Casey KuhlmanCEO

Preston ByrneCOO

Chris LarsenCEO

Blockchain communities

http://ibmblockchaingraph.mybluemix.net/


Market PictureBlockchain as a Service (BaaS)Competitors

Well, a lot is said about it but in reality is

still ongoing stuff …


Market Picture Blockchain Ecosystem

sourceIBM is more involved than it

can appear here


Business use casesOpportunities

SMART CONTRACTS FINANCIAL SECTOR

RECORD KEEPING DIGITAL CURRENCY SECURITIES

IBM potential Businesses



Land and property registry / proof of ownership• Land is often split into parts, Legal rules apply

Software contracts• Pricing rules based on CPU, users, etc… => consumption

Music rights for artists• Distribution based on diffusion

Medical history and reimbursements• Free access to authorized person, automatic health

redemption

IoT• Automatic triggering of smart objects coming from a

commercial contract negotiation

Smart contract and Record keeping niche



Who will disappear or will be transformed?• Clearing houses• Collateral management• Swift : Today Swift is the “trusted” network. It

transports, validates and rejects messages. It authorized banks access to the network. It gives proof and certifies message delivery between two peers.

Are banks ready to cooperate ?• Yes : reducing costs and risk, transparency with

authorities, being ahead on the competition.• No : specific country based sanctions,

complicated to set up, inherent blockchain coding complexity, fast evolution is a threat for their business. Fear of the unknown. How to hide balances and trades to the others ?

Financial sector



“No, I’m not suggesting the moonshot of immediately redoing our global financing, lending system on a blockchain. But we have now employed a shadow chain: my definition of shadowchain is it’s not replacing the primary business process, it’s being used to enrich that business process with a useful function that it currently doesn’t do.” --Jerry Cuomo, IBM

Success Stories around Blockchain

https://www.youtube.com/watch?v=F0P7NM7d-ps&nohtml5=False



Blockstream’s core area of innovation is sidechains, a technology focused on improving on the blockchain, the most powerful public utility for distributed trust systems.Sidechains are blockchains that are interoperable with each other and with Bitcoin, avoiding liquidity shortages, market fluctuations, security breaches and outright fraud associated with alternative crypto-currencies.


Montreal

https://blockstream.com/video/elements-gmaxwell.mp4



Everledger provides immutable ledger for diamond ownership & related transaction history verification for insurance companies, claimants.


Accelerator London Nice

https://www.youtube.com/watch?v=nK0_FZPkxPU



Dynamis is a smart contract for peer to peer insurance running on the Ethereum platform. It provides supplementary unemployment insurance by using the LinkedIn social network as a reputation system. Applicants for a new policy can use LinkedIn to verify their identity and employment status. Claimants can use their LinkedIn connections to validate that they are looking for work.


https://www.youtube.com/watch?v=8qCfVjV1YB4



InsurETH lets you insure your flight directly with an ethereum smart contractThe contract is resolved automatically on the Ethereum blockchain


London



Augur is a decentralized prediction market built on the Ethereum blockchain. It allows you to forecast events and be rewarded for predicting them correctly (Gambling)


San Francisco

https://www.youtube.com/watch?v=yegyih591Jo



OpenBazaar is an open source project to create a decentralized network for peer to peer commerce online— using Bitcoin — that has no fees and no restrictions.


https://www.youtube.com/watch?v=nuRgHbTU9pk



P2P trade system, commerce online : First class privacy, smart contracts, escrow protection, exceptional resilience, submarket design


https://vimeo.com/147665327



Community microgrids are a new approach for grid operations that achieve a sustainable, secure, and cost-effective energy system by providing long-term, locally generated power security prioritized for the community. Microgrids, have ability to separate from the larger electric grid during extreme weather events or other emergencies, providing the backbone for resilient, sustainable and more efficient energy production.


Brooklyn

https://vimeo.com/97805432

blockchain with hyperledger (public version)

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