Blockchain and Internet of Things

| GRACE HOPPER CELEBRATION 2016 | #GHC16
PRESENTED BY THE ANITA BORG INSTITUTE AND THE ASSOCIATION FOR COMPUTING
#GHC16
2016
Blockchain and
Internet of Things
Valerie Lampkin
@vjlam30188
vlampkin@us.ibm.com
Sumabala Nair
sumapnair@us.ibm.com
Carole Corley
ccorley@us.ibm.com

PRESENTED BY THE ANITA BORG INSTITUTE AND THE ASSOCIATION FOR COMPUTING 2
Blockchain Technology
Blockchain and Internet of Things
The IBM Watson IoT Platform
Thought Leadership & Quick Links
Overview
Demonstration
Watson-IoT Blockchain Logistics use-case and demo

Blockchain
Technology

4
The Problem With Business Networks Built on
Traditional Databases
Transactions
Can be suppressed: Participants have to trust database
owners
Can be deleted: Database admin is all powerful
Cannot be modified: Database admin is all powerful
Security
Risk is concentrated on each database owner
Crash fault tolerant: If you are lucky
Visibility
Local only - at the individual database level
Costs
Integration Costs - Expensive security and integration costs
across many technologies

5
How Blockchain Solves This
Transactions
Cannot be suppressed: All participants see all
transactions and add them to their own copy of the
ledger
Cannot be deleted: Ledger is append only
Cannot be modified: Ledger is immutable – everybody
can check
Security
Distribution of risk:
Byzantine fault tolerant: Resistant to number of malicious
participants
Visibility
Global - at the fabric level
Costs
Integration Costs – Standardized secure technology and
lower integration costs in a single technology

Blockchain in a nutshell
Records all transactions
Each participants build his own copy
Append only
Immutable and cannot be changed
THE shared system of record
Smart Contract
Consensus
Privacy and
Confidentiality
Shared LedgerLedger is shared, but participants
require privacy
Participants need:
Transactions to be private Transaction validation &
commitment
Different to Bitcoin
Byzantine Fault Tolerant
Scalable
“pluggable” consensus for
different use cases
Business rules implied by the
contract
Embedded in the Blockchain
Executed with the transaction
Verifiable, signed
Encoded in programming
language
Identity not linked to a
transaction
Transactions need to be
authenticated
Cryptography central to these
processes

7
Blockchain – not for all . . .
POSITIVE Indicators
1. Managing contractual relationships
2. Complex business logic
3. Identity is important
4. Transactions need to be private
5. Market Approach needed
6. More than two parties
7. Looking to reduce costs
8. Want to improve discoverability
NEGATIVE Indicators
1. Need high performance
(millisecond) transactions
2. One organization involved (no
business network)
3. Looking for a database
replacement
4. Looking for a messaging or general
transaction processing

8
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/

9
Linux Foundation: Hyperledger Project
DECEMBER 17th 2015
Community + Code
6 Proposed Code contributions
170% Growth in 6 months
80 Members
2K+ Slackers
5 HackFests
60+ attendees per Hackathon
100 + Contributors
Ethereum
EVM?

10
Hyperledger Application Architecture

Blockchain and
Internet of Things
(IoT)

12
What is an IoT Platform?
12
Watson IoT Platform
Sensors &
Networks
Other
Data Sources
Weather
Map
01
0110
0010
001001
Devices Platform Applications
Other IoT platforms

Why?
• Very often, physical objects are used or
maintained by multiple parties
• Multiple parties need to agree on acceptable
usage
• Disputes between parties require some record
of what occurred in order to resolve disputes
• Physical objects of all sorts are used: equipment,
vehicles, buildings, transmission lines (water,
gas, electricity)
• Effects of the environment may also factor into
agreements between parties
• When the objects themselves can report on
their status, this can assist in processing
agreements between parties
Blockchain and IoT
What?
• Enable physical objects (e.g. shipping containers,
manufacturing parts, etc.) to participate in secure
blockchain transactions.
How?
• Route messages from any Watson IoT Platform
connected device to blockchain transactions.
• Devices can send sensor data and the identity of the
object as determined from barcodes, RFIDs,
embedded devices, etc.
• Works with existing devices - does not require
blockchain code to run on devices.
• Watson IoT Platform maps a device’s data format to
that required by the blockchain contract. Blockchain
contract does not have to know about the types of
devices sending data or understand their data format.

Example Use Cases

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.
Benefits
• trust increased no authority "owns” provenance
• improvement in system utilization
• recalls "specific" rather than cross fleet
Use Case: Asset Management - Parts Tracking/History

16
What?
• Knowing that a vehicle has been maintained according to the required schedule is
difficult today. E.g. maintenance records, work performed, vehicle use, damage
• Many interested and dependent parties, with contrasting/conflicting goals e.g.
Manufacturer/owner/insurer
How?
• Use IoT blockchain as a shared ledger of vehicle history, from usage, maintenance,
warranty work, replacement parts
Benefits
• Greater transparency of true history: Proof of good parts, completed maintenance
and certifications, clean documents.
• Greater confidence and safety because replacement part provenance and all service
is indelibly recorded.
• Safety Certifications and Auditability
• Greater trust since no single authority "owns” the whole story
• New business opportunities for insurers, lenders, warranty services
Use Case: Asset Management - Warranty

The IBM Watson
IoT Platform

Run Your Apps
The developer can chose any language runtime or bring their
own.
DevOps
Development, monitoring, deployment and logging tools
allow the developer to run the entire application.
APIs and Services
Broad catalog of IBM, 3rd party, and open source, APIs and
services to compose an application in minutes.
Cloud Integration
Build hybrid environments. Connect to on-premises systems
of record plus other public and private clouds. Expose your
own APIs to your developers.
Built on IBM SoftLayer
No need to worry about provisioning or managing
infrastructure.
Composable services development, runtime and operations for your IoT apps
IBM Bluemix environment for IoT development

19
IBM Watson IoT Platform - Connect
Connect and manage devices, networks, and gateways
IBM Watson IoT Platform - Information Management
Integrating information, structured and unstructured, from devices,
people, and the world around us
IBM Watson IoT Platform - Analytics
Gaining insights from information using Realtime, Predictive and
Cognitive analytics
IBM Watson IoT Platform - Risk Management
Ensuring you leverage the right information from the right sources,
and the right software runs where you need it
Everything you need to transform with IoT
The IBM Watson IoT Platform
www.ibm.com/iot

Bluemix (Hosted)
Hyperledger
Client
Watson IoT Blockchain End-to-end flow with Analytics
Watson IoT Platform
Analytics
Blockchain Proxy (Data Mapping)
IBM Blockchain
Hyperledger
Peer
Hyperledger
Peer
Hyperledger
Peer
Smart Contract
Smart Contract
Hyperledger
Peer
Smart Contract
Smart Contract
Database Integration
Hyperledger
Client
Connect (Messaging & Device Mgmt)
Information
Management
Risk
Management
Consensus
Database
(modeling,
reporting)
Retrieve data
and store
analytic
triggered
events
Modeling &
Runtime analysis
Device Connector Bridge
Device
Conditional Off-chain storage with
hash stored in the blockchain.
Optional
Device
platform
send commands
Device Data
Analytics Application
PMQ
Use database for
modeling and
runtime analysis
Device
Instructions
Register Device,
Listen to events,

IBM IoT Blockchain
Demo

22
Use Case: Trade, Logistics, Shipping
What?
• Currently Freight logistics involve many different parties: manufactures, forwarders, shippers,
custom agents, insurers.
• Most of these parties use different systems to track shipments
Manufacturer/shipper/insurer
How?
• Use IoT enabled blockchain as a shared ledger to record shipping containers as they move through
system
• Automatically update the “smart contract” and blockchain through the IoT Foundation.
Benefits
• Greater transparency and of shipment progress improves efficiency
• Greater trust since all transactions are indelibly recorded
• Greater accuracy and lower cost, through IoT participation.
• Ability to optimize and automate business processes through IoT.
• Future vision allows for ‘freight autonomy’

ibm.biz/iot_bc_demo

Thought Leadership
& Quick Links

Thought Leadership
2016 2015 2015 2014
ibm.biz/businessofthings ibm.biz/economyofthings ibm.biz/empoweringtheedge ibm.biz/devicedemocracy

26
Explore & Experiment!
 Learn more about IoT and Blockchain
 https://discover-iot-blockchain.eu-gb.mybluemix.net/
 Learn more about IBM Blockchain
 http://www.ibm.com/blockchain/
 https://console.ng.bluemix.net/catalog/services/blockchain/
• t an overview of what IBM Blockchain is, how it relates to the general blockch
• IBM Blockchain DOCS - All necessary instructions to get up and running. There is no need to
deploy IBM Blockchain separately from those instructions.
• IBM Blockchain API - Get an understanding of the IBM Blockchain API
• IBM Blockchain for Developers - Get an overview of how blockchain fits into your
development environment, and get started with some walk-throughs, all of which feature
live demos and code that is deployable to run on IBM Bluemix.

See us Today at IBM Booth #1607

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Backup

Business Networks benefit from connectivity
• Connected customers, suppliers, banks, partners
• Cross geography & regulatory boundary
Wealth is generated by the flow of goods &
services across business networks
Transactions are the basic unit of interaction
Contracts are the constructs that regulate
transactions
• When they are valid
• How they are reconciled
Business Networks and Markets

Business / MRO Networks benefit from
connectivity
• Connected Manufacturers, Assemblers,
Maintainers, OEMs, Operators, and
Regulators
• Cross geography & regulatory boundaries
Trust is generated by the transparent and
auditable flow of information
Collaboration is central to this process:
• Public transactions, visible to all
• Private transactions between individual
parties
IoT View: Operations and Maintenance Networks

32
Dramatically reducing business transaction
costs
Blockchain
Now that we have a secure and reliable view of
the world captured in a blockchain
Smart Contracts
We can automate smart contracts on top
Search and information costs reduced
Policing and enforcement costs reduced
Bargaining costs reduced

33
Blockchain will impact many business ecosystems
• Itlowersthecostofbusiness transactions throughtheautomationofsmart contracts
built ontopofanappend only distributed ledger
• Visibility at any point in time -> Supply chain provenance, Regulated part
life cycle, Industry 4.0, Service LevelAgreements, Facility management,
Auditable machine decisions, Certificate transparency, IoT Membership,
Independent and distributed decision making ,
• Asset management -> Identity management, Resources, Registries,
Currency, Goods, Rights

34
Hyperledger Next / Hyperledger 1.0 Proposed
Architecture

35
Hyperledger-Fabric Proposed Roadmap &
Releases

What?
• Knowing that a piece of equipment (e.g. engine, measuring system, instrument) has been used per the specifications or in
accordance with regulations for the equipment. e.g. work performed, amount of use, type of use, mis-handling events, etc.
Manufacturer/owner/regulator/inspector/insurer
• Processes, such as the manufacturing or transport of drugs, have regulatory requirements for tracking history and maintaining
those records for years and providing to regulatory agencies as well.
How?
• Use IoT blockchain as a shared ledger of equipment/process history, from usage, maintenance, warranty work, replacement
parts, out-of-tolerance or regulation situations.
Benefits
• Greater transparency of true history: indelible log of equipment sensor readings, or situations logged by the device and
reported, process events and history
• Safety Certifications and Auditability
• Greater trust since no single authority "owns” the whole story – or said another way – many parties all keep the same record of
events/data
• New business opportunities for insurers, regulators, etc.
Use Case: Regulatory Compliance

Blockchain and IoT
Watson IoT Platform
Connect
IoTP Device
Client
(MQTT client)
Query &
DevOps
REST
APIs
IBM Blockchain
(Bluemix Service)
Pee
r
Pee
r
Blockchain
Contract
Blockchain
Contract
Client
Blockchain
Application
Blockchain Proxy
MQTT
Client
Data
Mapping
Device Data
Mapped to
Blockchain Contract
format
Risk
Management
Information
Management
Analytics
Device Data
(identity + state)

Blockchain and Internet of Things

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