Blockchain is a shared, distributed ledger technology that allows participants in a business network to view a single version of transaction records and asset ownership. It provides solutions to problems of trust, transparency and efficiency in business networks by creating an immutable record of transactions through consensus-based validation. Early blockchain applications include Bitcoin, which uses blockchain to enable digital currency transactions in a decentralized, anonymous yet verifiable way. Blockchain holds potential for business applications by enabling shared ledgers, smart contracts, privacy and low-cost validation of transactions across organizational boundaries.

2. Introducing Blockchain
A shared ledger technology allowing
any par3cipant in the business
network to see THE system of record
(ledger)

3. Problem - Difficult to monitor asset
ownership and transfers in a trusted
business network
Inefficient, expensive, vulnerable

4. Solu>on – a permissioned,
replicated, shared ledger
Consensus, provenance, immutability, finality

5. Blockchain underpins Bitcoin . . .
•
is unregulated, censorship-resistant
shadow currency
• Blockchain ensures “cash like” coin
passing
– unique,
– immutable,
– Final
• Bitcoin is the first Blockchain
applica>on
– Blockchain is not
• Digital currencies different from
cyptocurrency

6. Blockchain for Business
Shared
Ledger
Smart
Contract
Privacy Valida>on
Append-only distributed
system of record shared
across business network
Ensuring appropriate
visibility; transac>ons are
secure, authen>cated &
verifiable
Business terms embedded
in transac>on database &
executed with transac>ons
All par>es agree to network
verified transac>on
Broader par>cipa>on, lower cost, increased
efficiency

7. Shared Ledger
• Records all transac>ons across
business network
• Shared between par>cipants
• Par>cipants have own copy through
replica>on
• Permissioned, so par>cipants see only
appropriate transac>ons
• THE shared system of record

8. Smart Contract
• Business rules implied by the
contract . .
• . . embedded in the Blockchain &
• executed with the transac>on
• Verifiable, signed
• Encoded in programming language
• Example:
– Defines contractual condi>ons
under which corporate Bond
transfer occurs

9. Privacy
• Ledger is shared, but par>cipants require
privacy
• Par>cipants need:
– Transac>ons to be private
– Iden>ty not linked to a transac>on
• Transac>ons need to be authen>cated
• Cryptography central to these processes

10. Valida:on
• Transac>on verifica>on & commitment
• When par>cipants are anonymous
– Commitment is expensive
– Bitcoin cryptographic mining provides
verifica>on for anonymous par>cipants
but at significant compute cost (proof of
work)
• When par>cipants are known & trusted
– Commitment possible at low cost
• Mul>ple alterna>ves
– proof of stake where fraudulent
transac>ons cost validators (e.g.
transac>on bond)
– mul>-signature (e.g. 3 out of 5
par>cipants agree)
• Industrial Blockchain needs “pluggable”
consensus

11. Blockchain Benefits
Reduce costs and complexity
Improve discoverability
Trusted recordkeeping
Shared trusted processes

12. Blockchain – not for all . . .
NEGATIVE Indicators
1. Need high performance (millisecond)
transac>ons
2. Small organiza>on (no business
network)
3. Looking for a database replacement
4. Looking for a messaging solu>on
5. Looking for transac>on processing
replacement

13. Pa@erns for Customer Adop:on
(1) INTERNAL LEDGER
• Ledger for internal reporting, audit
and compliance,
• Consistent view of key business
assets, • Provenance, immutability &
finality more
important than consensus.
• Access to auditor and regulator
(2) CONSORTIUM SHARED LEDGER
• Created by a small set of participants
• share reference data between
themselves and consumers.
• Consistent real-time view of key
information
(3) INFORMATION HUB
• A ledger set up in a single organization
• Sharing of information between
participants
• (e.g. voting, dividend notification)
• Assets have information, not financial
value,
• Require provenance, immutability &
finality.
(4) HIGH VALUE MARKET
• Ledger for the transfer of high financial value
assets
• between many participants in a market.
• Requires all enterprise features of Blockchain

14. Use Cases

15. Use Case – Healthcare

16. Use Case – Le@er of Credit
What?
• • Bank handling letters of credit (LOC)
wants to offer them to a wider range of
clients including startups
• • Currently constrained by costs & the
time to execute
• How?
• • Blockchain provides common ledger
for letters of credit
• • Allows bank and counter-parties to
have the same validated record of
transaction and fulfillment
• Benefits
• • Increased trust
• Increase speed of execution (less than 1
day) • Vastly reduced cost

17. Use Case – Corporate Debt (or
Bond)
What?
• Bank holding a corporate debt would like to
pay vendors quickly for transactions validated by the client
allow the corporate client to see the payment is made
provide government with oversight of the process
How?
• Blockchain provides a common ledger for recording the
corporate debt / bond,
• available to bank, corporate client, vendors & government.
Benefits
• Speeds up vendor payments bigger net discounts
• Eliminates risk and accelerates decision making
• Owning bank can spread the cost across each market.

18. Use Case – Smart Refrigerator
What?
• Value of connected smart devices limited by ability to
interact with business systems
How?
• Blockchain to manage automated interactions with the
external world
• ordering and paying for food to arranging for its own
software upgrades and tracking its warranty.
Benefits
1. business value from connected technology
2. efficiencies in network and supply chains.
3. status transparent to all network members

19. Blockchain : Decentralized Database – First use is
Bitcoin