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Deep dive on Amazon Managed Blockchain

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Amazon Managed Blockchain is a fully managed blockchain service that makes it easy for customers to create and manage scalable blockchain-based transaction networks (blockchain networks) using the popular open source blockchain frameworks Hyperledger Fabric and Ethereum. Blockchain technologies enable groups of organizations, oftentimes in financial services and manufacturing, to securely transact, run application code, and share data without a trusted central authority. We will explore the components of blockchain technology, discuss use cases, and do a deep dive into capabilities, performance, and key innovations in Amazon Managed Blockchain.

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Deep dive on Amazon Managed Blockchain

  1. 1. S U M M I T L o n d o n
  2. 2. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Building enterprise solutions with blockchain and ledger technology Dr. Andrew Kane Principal Solutions Architect Amazon Web Services
  3. 3. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T How do we think about blockchain?
  4. 4. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Need for a ledger with centralized trust DVLA Track vehicle title history Manufacturers Track distribution of a recalled product HR & Payroll Track changes to an individual’s profile Healthcare Verify and track hospital equipment inventory LEDGERS WITH CENTRALIZED TRUST1
  5. 5. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Challenges customers face Building ledgers with traditional databases Difficult to manage and scale Impossible to verify Error prone and incomplete Resource intensive Blockchain approaches Designed for a different purpose Adds unnecessary complexity
  6. 6. S U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Amazon Quantum Ledger Database (Amazon QLDB) Fully managed ledger database with a central trusted authority PREVIEW
  7. 7. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Do you need a ledger database or a blockchain? Michael Labib Principal Solutions Architect Amazon Web Services
  8. 8. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Amazon QLDB (Preview) Fully managed ledger database Track and verify history of all changes made to your application’s data Maintains a sequenced record of all changes to your data, which cannot be deleted or modified; you have the ability to query and analyze the full history Immutable Uses cryptography to generate a secure output file of your data’s history Cryptographically verifiable Easy to use, letting you use familiar database capabilities like SQL APIs for querying the data Easy to useHighly scalable Executes 2–3X as many transactions as ledgers in common blockchain frameworks
  9. 9. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Need for running transactions with decentralized trust 2 Financial institutions Peer-to-peer payments Mortgage lenders Process syndicated loans Supply chain Transact with suppliers and distributers Retail Streamline customer rewards TRANSACTIONS WITH DECENTRALIZED TRUST
  10. 10. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Customer problems with complex business networks 1. Networks rely on central authorities 2. Cannot agree on how data can be securely and fairly shared 3. Multiple organizations need a single, up-to-date view of data 4. Business logic among multiple organizations could be simplified 5. Asset transfers require escrow 6. Public networks needs a tamper-proof history of transactions
  11. 11. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Blockchain builds trust in a network Eliminates the need for central authority in business networks Three main components: distributed ledger, consensus mechanism, and “smart contract” execution environment Together these elements allow two parties to transact with one another by ensuring other parties consent to the transaction and record the transaction. This provides immutability and trust
  12. 12. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T New Transaction Blockchain components: Distributed ledger database Block 59 Transaction Previous Block Hash: 0000d68b2f0a3b Timestamp Block 60 Transaction Previous Block Hash: 000057ec2fda71 Block Hash: 000087ea2ffe94 Timestamp Transaction Block 61 Previous Block Hash: 000087ea2ffe94 Block Hash: 000044bf2efe32 Timestamp Transaction Transaction Block Hash: 000057ec2fda71 Transaction The journal records an immutable log of all transactions and is maintained by nodes in the blockchain network New Block Hash: 0000473acb123
  13. 13. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Blockchain components: Consensus mechanism Some important attributes • Byzantine fault tolerance requirements • Transaction rate, energy consumption • Hardware requirements • Security
  14. 14. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Blockchain components: “smart contracts” Smart Contracts • Rules embedded in app • Verified execution of code • Conditional operators • Application writes to ledger • Contract can interact with components outside of the blockchain network (off-chain) Traditional Contracts • Require human action • Open to manipulation • Verified an enforced by third parties
  15. 15. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Challenges with existing blockchain solutions Complicated to manage Setup is hard Hard to scale Expensive
  16. 16. S U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Amazon Managed Blockchain Fully managed blockchain service, supporting both Hyperledger Fabric and Ethereum frameworks NEW
  17. 17. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T © 2019, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Amazon Confidential and Trademark Announcing General Availability of Amazon Managed Blockchain
  18. 18. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Hyperledger Fabric available today and Ethereum coming soon AMB is now ready for production workloads with availability in US East (N. Virginia) • Customers can simply go to the AWS Management Console and get started • For more info go to https://aws.amazon.com/managed- blockchain
  19. 19. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T What is Amazon Managed Blockchain? Amazon Managed Blockchain is a fully managed service that makes it easy to create and manage scalable blockchain networks using popular open source frameworks: Hyperledger Fabric and Ethereum
  20. 20. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Amazon Managed Blockchain features Low cost Only pay for resources used Open-source variety Support for two frameworks Integrated Send data to Amazon QLDB for secure analytics Fully managed Create a blockchain network in minutes Reliable & secure Backed with Amazon QLDB technology Decentralized Democratically govern the network
  21. 21. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T How Amazon Managed Blockchain works Amazon Managed Blockchain Create a network Choose an open source blockchain framework, set up a new blockchain network and your membership in your AWS account with just a few clicks Invite members Invite other AWS accounts to join the network Add nodes Create and configure blockchain peer nodes that store a copy of the distributed ledger Deploy applications Create and deploy decentralized applications to your network through your per nodes. Transact with other members on the network
  22. 22. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Hyperledger Fabric • Create permissioned networks with channels to limit the transactions on the ledger each member can see • Chaincode (smart contracts) written in Go and are executed in Docker containers • Validation policy for executing chaincode is configurable • Does not require a native cryptocurrency for chaincode execution
  23. 23. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Ethereum • Create smart contracts using the Solidity language that run across nodes in the network • Very scalable • Create permissioned networks or use public Ethereum network • Configured to use Proof-of-Work consensus algorithm for public network and Proof-of-Authority for private networks • Anyone who can access the network can see all data on the ledger
  24. 24. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Who ”owns” the network? • Networks are decentralized and can remain active even after the initial creator leaves • Inviting members to join: members vote on who to invite and remove • Network-wide settings: members can vote on network-wide settings and configure the actual voting rules (e.g., majority rules or one member decides) • Each member pays for their resources • Amazon Managed Blockchain manages shared components like the ordering service and networking settings
  25. 25. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T • Pay-as-you-go with no upfront costs • Hourly rates billed per-second • Each member pays for their own resources and the data it writes to the network • VPC endpoints created to access resource endpoints are billed separately • Standard data transfer rates Pricing dimensions
  26. 26. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Starter edition and standard edition Starter edition • Test and small production networks • Up to 5 members/network • Up to 2 peer nodes/member • bc.t3.small and bc.t3.medium • Ordering service provisioned has lower transaction throughput and availability than that in a Standard Edition network Membership pricing rate is different for each edition Standard edition • Production networks • Up to 14 members/network • Up to 3 peer nodes/member • bc.t3, bc.m5, and bc.c5 instance families • Ordering service provisioned has higher transaction throughput and availability than that in a Starter Edition network
  27. 27. S U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
  28. 28. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Transaction flow with Hyperledger Fabric Verify policy Peer-1 Peer-n Transaction simulation Ordering service Submitting-client 2 5 6 Transaction delivery to peers Transaction proposal1 Endorsement signature3 Broadcast endorsement4
  29. 29. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Augmented Hyperledger Fabric Ordering service • Core component of a Fabric network to guarantee delivery and order of transactions • Production grade networks using open source will utilize Apache Kafka for this component • Managed Blockchain uses Amazon QLDB technology, increasing durability and reliability Certificate authority • Open source uses a “soft” HSM • Managed Blockchain uses AWS Key Management Service (AWS KMS) to secure the Certificate Authority service
  30. 30. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Channels and private data for access control Channels allow isolation of transactions among specific members in the network Create or update a channel with configuration transaction (configtx) Private data enables sub- channel access control Member 1 Member 2 Member 3 Channel 2 Ledger Channel 1 Ledger Hyperledger Fabric ordering service Channel 2Channel 1 Member 2 Peer Member 3 Peer Member 1 Peer
  31. 31. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Endorsement policies Endorsement policies allow chaincode to specify which members (or how many) need to validate a transaction before submitting Endorsed transactions then get submitted to the ordering service and assembled into blocks Member 1 client Hyperledger Fabric ordering service Ledger LedgerMember 2 Peer Member 1 Peer 1 3 2 1 3
  32. 32. Network 1 – Managed Blockchain VPC endpoint VPC endpoint Account A Account B
  33. 33. S U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Customer use cases
  34. 34. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Customers are experimenting in many industries Proof of Ownership Digital Security Trading Documents/Contracts Enterprise Platforms Financial Insurance Mortgage Loans Voting Mechanisms Patient Records Corporate Governance HCLS Real Estate Legal Agriculture Gaming M & E Transportation Digital Advertising Power/Utilities Retail Capital Markets Cloud OWNERSHIPPRIVATE MARKETS DERIVATIVES WAGERS GLOBAL PAYMENTS REMITTANCE NOTARISATION EQUITY MICROFINANCE INTELLECTUAL PROPERTY TITLE RECORD ESCROW DIGITAL RIGHTS E-COMMERCE DEBT CROWDFUNDING P2P LENDING HEALTHCARE VOTING TRUSTEES SMART CONTRACTS DIGITAL CURRENCY SECURITIES RECORD KEEPING BLOCKCHAIN TECHNOLOGY
  35. 35. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Blockchain in supply chain • Each organization has a trusted copy of the supply chain data • Payments can be automated through smart contracts • Identity of components are immutably tracked as they move through the supply chain • Quality of products can be monitored and immediately acted on
  36. 36. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Blockchain in financial services
  37. 37. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T “Given our vast partner ecosystem, we are exploring the decentralization and immutable tracking benefits of blockchain for potential applications in our insurance business. We believe blockchain can improve the transparency and efficiency for stakeholders in these networks to transact, while still maintaining an independently verifiable lineage of activities. However, blockchain frameworks are complex and difficult to operate. With Amazon Managed Blockchain, we can now easily create Hyperledger Fabric blockchain networks to test and learn without worrying about managing the underlying infrastructure, networking, and software configuration.” —Daniel Johnson CTO and Head of Innovation, Guardian Life Insurance Company
  38. 38. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Who is Singapore Exchange A diversified exchange group that runs key market infrastructure including the Singapore stock market and a pan-Asian derivatives exchange covering all major asset classes. High annual dividend of 28 cents for the past 5 years Strong cash-flow with debt-free balance sheet Anchored in Singapore, an AAA-rated economy London Tokyo Mumbai Singapore Hong Kong Shanghai Beijing Chicago New YorkSan Francisco Headquarter Office
  39. 39. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Singapore Exchange blockchain use case Challenges with existing financial systems: • Lack of trust between multiple banks for settling trade transactions, and thus require an intermediary financial institution • Inefficient processes for sending data across each other as extra hops result in delays, especially for international transfers • API divergence is expensive and cumbersome to maintain as banks communicate with each other using API integrations from disparate systems
  40. 40. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Singapore Exchange blockchain use case Amazon Managed Blockchain Benefits of implementing a blockchain • Efficient transfer of data and transactions without intermediaries • Enables distributed trust and allows for significant reduction in settlement time on trade by trade basis • Compliance enforcement through smart contracts reduces costs (no more API spaghetti across disparate banking systems • Easy to add new participating members
  41. 41. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T About —a multiphase journey Project Ubin is a collaborative project between Singapore Exchange, the Monetary Authority of Singapore (MAS) and the industry to explore the use of blockchain for clearing and settlement of payments and securities. Source: http://www.mas.gov.sg/Singapore-Financial-Centre/Smart-Financial-Centre/Project-Ubin.aspx Domestic Delivery vs Payment for Securities Settlement Use of digital currency in Real-Time Gross Settlement (RTGS) Achieved gridlock resolution and liquidity savings mechanism (LSM) on a distributed system without compromising on privacy Phase 1 Phase 2 Current phase Delivery vs Payment vs Payment (DvPvP) for Cross-border settlement of payments and securities Payment vs Payment (PvP) for Cross-border settlement Current Phase Future Phase Trading Post Trade Clearing Settlement DepositoryCapital Raising
  42. 42. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Our pilot on Amazon Managed Blockchain Single region, single country deployment Arbitrator Fabric Certificate Authority Bank A Peer Node VPC Endpoint Fabric Client Node VPC Endpoint API Server Fabric Client Node API Server (Ordering Service) Fabric Certificate Authority Bank B Peer Node Fabric Certificate Authority RMO Peer Node Fabric Certificate Authority Central Bank Peer Node Amazon VPC PrivateLink Blockchain X Arbitrator VPC Endpoint Fabric Client Node API Server VPC Recognized Market Operator (RMO) Hyperledger Fabric Network by Amazon Managed Blockchain VPC Central Bank / FIs VPC Bank B Buyer/Seller VPC Bank A Buyer/Seller Digital Asset Digital Currency
  43. 43. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Our conclusions “Higher investor confidence” Design for arbitrator role • Designing for arbitrator’s role provide avenue for recourse for disputed transactions • Maintains a central role to monitor and facilitate market functionalities Potential for round-the- clock operations Underlying DvP Design can be further explored for cross-border transactions where time-zone differences could mean a delay in settlement time, exposing participants to unnecessary FX fluctuations and principal risks • Smart contracts can be used to apply obligations and rights consistently and coherently • Compliance enforcement through smart contracts reduces costs “Flexibility to reduce Settlement time” Tokenized currency coupled with smart contracts allows for significant reduction in settlement time on trade by trade basis 1 2 3 4 5 6 • Distributed control prevents account compromise • Layered security with blockchain- independent transfer of secret Enhances investors’ security Multi-Sig, off-chain, out-of-band secure secrets Project DvP’s underlying design, architecture & benefits can be scaled for other asset classes beyond central bank-issued digital currencies including securities, corporate bonds, commodities etc. and other investor types such as retail etc. Potential broadening of asset classes & investor types “Consistently” applied rights and obligations
  44. 44. S U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Summary
  45. 45. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Identifying the right AWS blockchain service Owned by a single, trusted authority Addresses core need of a immutable and verifiable transactional log It’s a database, so its fast, as it doesn’t require consent from members Amazon QLDB Amazon Managed Blockchain No single owner of the ledger. Joint ownership by multiple parties Addresses core need of enabling multiple parties to transact transparently and with trust with each other Removes intermediaries when a group of members needs to transact. So it makes business processes more efficient Ownership Addresses Need Key Benefit
  46. 46. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Use AWS’s managed blockchain service or other compute services as the foundation for your blockchain infrastructure Amazon API Gateway lets you create custom REST API to power your blockchain apps Use CloudHSM to manage blockchain participant’s secret keys Connect IoT devices with unique identities to a common underlying data layer Utilize S3 as your off-chain data storage for high availability Perform analytics and gain insights from your blockchain’s data in near real time Leverage off-chain database solutions to support blockchain applications and store metadata Send notifications or leverage serverless compute to respond to events programmed into blockchain smart contracts AMAZON EC2 AMAZON ECS AMAZON S3 AMAZON EBS Blockchain solution building blocks on AWS AWS CLOUDHSM AMAZON REDSHIFT AWS LAMBDAAMAZON DYNAMODB AMAZON KINESIS AMAZON API GATEWAY* AMAZON SQS AMAZON SNS AMAZON IOT AMAZON MANAGED BLOCKCHAIN AMAZON QLDB
  47. 47. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T AWS blockchain customers
  48. 48. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Next steps Learn more about our services! Amazon Managed Blockchain (Generally available) • Amazon Managed Blockchain webpage: https://aws.amazon.com/managed-blockchain • Deploying a sample application: https://aws.amazon.com/blogs/database/build-and-deploy-an-application-for- hyperledger-fabric-on-amazon-managed-blockchain/ • Documentation: https://docs.aws.amazon.com/managed-blockchain/latest/managementguide/what-is-managed- blockchain.html Amazon QLDB (Apply for preview) • Amazon QLDB webpage: https://aws.amazon.com/qldb • Preview sign-up: https://pages.awscloud.com/QuantumLedgerDatabase-preview.html
  49. 49. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I T Thank you! S U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved. Dr. Andrew Kane Principal Solutions Architect Amazon Web Services
  50. 50. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.S U M M I TS U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.

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