What’s so cool about Blockchain?

Scott Grimes

Biography - 25+ Years in IT● Sr Systems Administrator + DevOps● Employer: IBM iX - Helping businesses with their digital experience

journey● SysAdmin: CentOS, Ubuntu, FreeNAS, VMware,

○ OS/2, SVR4, Solaris, AIX, Windows Server● DBA: Oracle, SQL Server, MySQL● Developer: HIPPA compliant web-based EMR● Been attending LinuxFest for 12+ years

HousekeepingThe open source security landscape is changing at a dizzying pace

● It is impossible for any one person to have all current knowledge● Thank you in advance for overlooking technical details that may be out of date

or wrong● I will talk TO the slides, but not read them verbatim● Audience: End-User, Developer, SysAdmin, etc

Please hold questions / comments to the end. I plan to leave time to answer a few.

Out of Scope● Blockchain != Bitcoin

In Scope● Overview● Real World Application/Examples● Limitations

A Physical Example - Blockchain√ Pony Express Transport Handoff

Signature + Timestamp

Mail Carrier HandoffSignature + Timestamp

Signature + Timestamp

Signature + Timestamp

Transport Handoff

DeliverySignature + Timestamp

A Physical Example - Ledger, Audit Trail

2018.09.01 12:21:00 + John Doe Signature

2018.09.02 14:11:00 + Sally Mae Signature

2018.09.05 15:01:00 + Freddy Mac Signature

2018.09.06 08:30:00 + Umpa Lumpa Signature

2018.09.11 10:15:17 + John Wayne Signature

“Owner”. Completely responsible for package

Advantages: Digitized Ledger & Audit Trail● Integrity => Wrap in cryptographically secured transactions● Immutable => Almost impossible to forge, fake, replay, alter the audit trail● Decentralize => Highly-Available, Redundant copies, Parallel processing● Standardize the Format● Accelerate => Faster transactions. Quicker settlement of “trades”

○ Verification, Reconciliation, & Clearance is in the digital record

● Reduced transaction cost ○ No fees to clearing houses or trusted third-parties

Single Block - Standardized Format

Unique, random number. Immutable discouraging faking, forgery, replay

Link to the previous block in the chain. Audit Trail

1 to many “transactions” per block. Digital Signature(s) : Transaction ID, Sender, Recipient, Terms, Signoff, Approver

Hash everything in green, creating a unique “key” for the whole block. Linked to by the next block. Integrity + Audit Trail

Your data HERE, wrapped in a “verification” hash. Integrity

Single Block - Physical Example

Signoff

Transaction ID

Your Data HERE

Sender / Seller

Timestamp

DIGITAL RECEIPT

Creating the chain of “ownership” & “changes”

Verification Attempted modification after the transaction block was completed.

Use Case => Healthcare (Integrity)

HIPPACompliantApp

DBA

Prison!5 Yrs

Use Case => Healthcare (Integrity)

DBA

!!! Happy Dance !!!

Use Case●

Medical Form

Medical Form in XML

Use Case Medical Form in XML

MD5 sum: 06 05 AA FD 67 91Doc ID: 789-4ABBL-10995-TX

SQL DB

Future

Block Transaction ID: AABC5F009514

Other Use Cases = Financial (Bitcoin)●

Use Case => Music Distribution (Ownership)●

Song: He is ExaltedDigital Copy: 117154File 117154.mp3:

Master

Transferring “ownership” of digital rights

Song: He is ExaltedOwner: Scott Grimes

Song: He is ExaltedOwner: Ray Perry

Song: He is ExaltedOwner: Ted Turner

Song: He is ExaltedDigital Copy: 117154File 117154.mp3:

Use Case => Land Parcels (Ownership)●

Parcel ID: 001 11259 46449 0055Pin 1: 53’ 46” latitude, 24’ 34” longitudePin 2: 55’ 17” latitude, 26’ 14” longitudePin 3: 57’ 12” latitude, 24’ 12” longitudePin 4: 55’ 09” latitude, 26’ 57” longitude

Use Case => Shipping Containers (Supply Chain)

Car: TILX 199176Product: Crude OilQty: 102,550.4 liters

Advanced Blockchain - Transaction

Transfer of ownership requires more than one Digital Signature

OwnerHome Owner’s AssociationBrokerBuyer

Advanced Blockchain - Transaction

Transfer of ownership can be completed by any one of these Digital Signatures

OwnerOR SonOR DaughterOR Trust Executor

Looking future...● Just scratching the surface of possibilities● Buy, sell, transfer, and audit at the speed of the cloud● Leading OpenSource Umbrella Prj => https://hyperledger.github.io/

○ Historical Comparison: JBoss for Java○ Production-ready Hyperledger Fabric 1.0

● Blockchain as a Service ( Google, AWS, Azure, Oracle, IBM )

Blockchain business opportunity?● Does my business network need to manage contractual relationships? ● Do we need to track transactions that involve more than two parties? ● Is the current system overly complex or costly, possibly due to the need for

intermediaries or a central point of control? ● Can the network benefit from increased trust, transparency, and

accountability in recordkeeping? ● Is the current system prone to errors due to manual processes or duplication

of effort? ● Is the current transaction system vulnerable to fraud, cyberattack, and human

error?

Limitation => Search Time● Bitcoin search + commit

○ 542,000 blocks ~= 10 min (As of Sep ‘18)● Minimize Impact

○ Store on SSD or NVMe○ Combine with traditional DB2 DB

● Network congestion @ billions of transactions per second

Search Time Distributed Search

Limitation => Code Changes● Blockchain is software● Software has bugs● Minimize Impact

○ “Version” the blocks

Incompatible code change

Limitation => User Acceptance● Early “malicious” transactions compromise the whole integrity chain.●●●●●●●●● Society “trust”

○ Security○ Ethical

● Privacy - your entire credit-card purchase history is “public domain”.

“Dirty” Data

Untrustworthy

There is a Blockchain in your future...Advantages

● Integrity● Accountability● Decentralized● Standardized● Accelerated Trades● Reduced Transaction Cost

Limitations

● Search Time● Network bandwidth● Compatible Code Changes● User Resistance

Act with Integrity - Thank You!

QuestionsScott Grimes

scgrimes@us.ibm.com

Website: None

Blog: NoneNEXT TALK - 5:00 PM Managing the IT

Security Octopus