The document provides an introduction to blockchain technology's applications in business, emphasizing its potential to enhance ecosystems, streamline processes, and reduce risks through transparency and a decentralized ledger. IBM highlights its engagement in multiple sectors using blockchain, including trade finance, supply chain, and healthcare, projecting significant economic benefits. Furthermore, it discusses the IBM blockchain platform and Hyperledger project, designed to develop and govern enterprise blockchain networks for improved collaboration and operational efficiency.

1. Blockchain Explained
An Introduction to Blockchain for Business
V5.07, 3 April 2018
Bill Lambertson
Global Director, Cloud Solutions
Telecommunications & Media Industry

2. Blockchain explained?
Blockchain for
business - examples
How can IBM help you
apply blockchain?

3. 3
Blockchain is creating extraordinary opportunities for
businesses to come together in new ways
Optimize Ecosystems
Streamline business
processes and the
exchange of value along
your ecosystem
Reduce Risk
Replace uncertainty
with transparency and a
trusted decentralized
ledger
Create New Value
Exploit new business
models and eliminate
inefficiencies

4. 4
IBM is making Blockchain real for business with over
400+ engagements and multiple active networks
Trade Finance Pre and Post Trade Complex Risk Coverage
Identity/ Know your customer (KYC) Unlisted Securities/ Private Equity Funds Incentive Program
Medicated Health Data Exchange Government Distributed Energy/ Carbon Credit
Supply Chain Food Trust Provenance/ Traceability

5. 5

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This could increase worldwide GDP by almost 5% and total trade volume by 15%

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46
Blockchain & AI
Artificial Intelligence-
driven analysis are
performed directly on
the blockchain, cross-
checking a myriad of
regulations and records
as well as supply chain
and IoT data, including
time, date stamps and
geospatial, as well as
visual information.
Source: IBM Research combines AI and Blockchain: https://www.ibm.com/blogs/research/2017/05/power-
blockchain-watson/
Interconnect 2017 – Everledger Diamonds Tracking on Blockchaiins - https://www.youtube.com/watch?v=-zYnYXpmtoc
Advanced computer
vision AI identifies a
diamond from its
natural properties,
which can’t be changed
Automatic generation
of smart contracts
from the Kimberly
Process certification
scheme
40 metadata points
Everledger Diamonds
www.pieroleo.com

8. 8
Benefits
Reduced dispute
resolution time
by 75%
Released
working capital
from $100m
Combine IGF
and Supplier info
to further expand
benefits
In production
since Sept 2016
Global Financing:
Dispute Resolution

9. 9
Financial Public Sector Retail Insurance Manufacturing
• Trade Finance
• Cross currency
payments
• Mortgages
• Asset
Registration
• Citizen Identity
• Medical records
• Medicine supply
chain
• Supply chain
• Loyalty
programs
• Information
sharing (supplier
– retailer)
• Claims
processing
• Risk provenance
• Asset usage
history
• Claims file
• Supply chain
• Product parts
• Maintenance
tracking
Additional blockchain examples:

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Blockchain use cases in the public sector
Source: Building Trust in government – Exploring the potential of blockchains

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Other examples of blockchain
Example of an unpermissioned, public ledger:
• The first blockchain application
• Defines an unregulated shadow-currency
• Bitcoin uses public-key cryptography, in which
two cryptographic keys, one public and one
private, are generated.
• Resource intensive
Blockchains for business are generally
permissioned and private, and prioritize:
• Identity over anonymity
• Selective endorsement over proof of work
• Assets over cryptocurrency

12. Blockchain explained?
Blockchain for
business - examples
How can IBM help you
apply blockchain?

13. 13
Blockchain for business explained…..
Blockchain
for
Business
A shared,
replicated,
permissioned
ledger

14. 14
Businesses never operate in isolation. They are
participants in a Business Network.
Business Networks benefit from connectivity
• Participants are customers, suppliers,
banks, partners , etc
• Cross geography and regulatory boundary
Wealth is generated by the flow of goods
and services across business network in
transactions and contracts
Markets are central to this process:
• Public (fruit market, car auction), or
• Private (supply chain financing, bonds)

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Transferring Assets, building value…
Ownership of assets pass across the network in return for payments, and
governed by contracts.
Anything that is capable of being owned or controlled to produce value, is an asset
Two fundamental
types of asset
Intangible assets
subdivide
Cash is also
an asset
• Tangible, e.g. a house
• Intangible, e.g. a mortgage
• Financial, e.g. bond
• Intellectual, e.g. patents
• Services performed
• Digital, e.g. music
• Has property of anonymity

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Blockchain is a distributed ledger that creates a permanent and
shared record of transactions
“At its core, blockchain is a
shared ledger that allows
participants in a business
network to transact assets
where everyone has control
but no one person is in
control.”
Leanne Kemp
CEO and Founder, Everledger
United Kingdom.
Shared
Ledger
Bank
AuditorOwner
Notary
Insurance
Company
Government
Source: IBV C-Suite study - Three ways blockchain Explorers chart a new direction – May 2017
… with consensus, provenance, immutability and finality

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Blockchain for business requires trust
Append-only
distributed system of
record shared across
business network
Business
terms
executed with
transactions
Transactions are
provably endorsed
by relevant
participants
Transactions
are secure with
appropriate
visibility
Privacy
Shared
ledger
Smart
contract
Proof
Increased efficiencies and cost reduction

18. 18
Shared ledger
Records all transactions across
business network• Shared between participants
• Participants have own copy through
replication
• Permissioned, so participants see only
appropriate transactions
• THE shared system of record

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Smart contract
Business rules associated
with the transaction
• Verifiable, signed
• Encoded in programming
language
• Example:
– Defines contractual conditions
under which a bond transfer
occurs

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Privacy
• Participants need:
– Appropriate privacy and confidentiality
between subsets of participants
– Identity not linked to a transaction
• Transactions need to be authenticated
• Cryptography is central to these
processes
The ledger is shared, but
participants require privacy and
confidentiality

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Proof
The ledger is a provable source
of information• Participants endorse transactions
– Business network decides who will
endorse transactions
– Endorsed transactions are added to the
ledger with appropriate confidentiality
• Assets have a verifiable audit trail
– Transactions cannot be modified,
inserted or deleted
• Achieved through consensus,
provenance, immutability and finality

22. Blockchain explained?
Blockchain for
business - examples
How can IBM help you
apply blockchain?

23. 23
IBM Blockchain Strategy
Drive the development of applications for specific business use-cases, to be
deployed to active blockchain networks
Solutions
Services
Ecosystem
Platform
Collaborate
with experts
from ideation
all the way to
production
Tap into our diverse ecosystem to develop strategic
partnerships and create your competitive advantage
Solve critical industry challenges by building and
joining new business networks and applications
Develop, govern and operate enterprise
blockchain networks with speed and security
A founding, premier member of Hyperledger, IBM is
committed to open source, standards & governance

24. 24
Hyperledger: A Linux Foundation project
• A collaborative effort created to advance
cross-industry blockchain technologies for
business
• Founded February 2016; now more than 230
member organizations
• Open source, open standards, open
governance
• Five frameworks and five tools projects
• IBM is a premier member of Hyperledger
www.hyperledger.org

25. 25
Hyperledger Members (230+)
Hyperledger is the fastest growing project in Linux Foundation history
Academia
Premier
Associate
General

26. 26
Distributed ledger fabric
• An implementation of blockchain technology that is a
foundation for developing blockchain applications
• Emphasis on ledger, smart contracts, consensus,
confidentiality, resiliency and scalability.
• V1.1 released March 2018
– Includes significant performance, security,
migration and smart contract improvements
• IBM is one of the many contributing organizations
http://hyperledger-fabric.readthedocs.io/
Hyperledger Fabric

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Hyperledger Composer:
Accelerating Time to Value
• Model your business networks, test and expose via APIs
• Expose a domain specific language and transaction processor
functions in Javascript,
• Applications invoke transactions to interact with business network
• Integrate existing systems of record
• Fully open and part of Linux Foundation Hyperledger
• Try it in your web browser now:
http://composer-playground.mybluemix.net/
• A suite of high level application abstractions for business networks
• Emphasis on business-centric vocabulary for quick solution creation
• Reduce risk, and increase understanding and flexibility
Hyperledger Composer
Hyperledger Fabric

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Introducing the IBM Blockchain Platform
Hyperledger Composer
DeveloperTools
IBM Cloud
OperationalTools
GovernanceTools
Blockchain application
Hyperledger Fabric
IBM Blockchain Platform is a fully integrated
enterprise-ready blockchain platform
• Designed to accelerate the development,
governance, and operation of a multi-institution
business network
• Developer tools that make use of Hyperledger
Composer to quickly build your blockchain
application
• Hyperledger Fabric provides the ledger, which is
managed through a set of intuitive operational tools
• Governance tools for democratic management of
the business network
• Flexible deployment options, including a highly
secure and performant IBM Cloud environment
http://ibm.biz/Platform_Demo
Try IBM Blockchain Platform @
https://www.ibm.com/blockchain/

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Getting started on your blockchain journey
Learn More About
IBM Blockchain
Schedule an IBM
Blockchain Workshop
Develop a Blockchain
Application
Activate and Grow your
Blockchain Network

30. Questions? Tweet us or
go to ibm.com/blockchain
@IBMBlockchain
IBM Blockchain
IBM Blockchain
Thank you
Bill Lambertson
Global Director, Cloud Solutions
Telecommunications & Media Industry

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