Do you need a ledger database or a blockchain - SVC208 - Atlanta AWS Summit.pdf

© 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?
Darin Briskman
Amazon database, analytics, machine learning, and blockchain
S V C 2 0 8

There are different types of purpose-built databases
Relational Key-value Document In-memory Graph Time-series Ledger
Referential
integrity, ACID
transactions,
schema-
on-write
Low-latency,
key lookups
with high
throughput and
fast ingestion
of data
Indexing and
storing
documents with
support for query
on any attribute
Microseconds
latency, key-
based queries,
and specialized
data structures
Creating and
navigating
relations
between data
easily and quickly
Collecting,
storing, and
processing time-
series data
Complete,
immutable,
verifiable history of
all changes to
application data
Lift-and-shift, EMR,
CRM, finance
Real-time bidding,
shopping cart,
social
Content
management,
personalization,
mobile
Leaderboards, real-
time analytics,
caching
Fraud detection,
social networking,
recommendation
engine
Internet-of-Things
(IoT) applications,
event tracking
Systems
of record,
registrations,
supply-chain,
financial

Need for a ledger with centralized trust
DMV
Track vehicle
title history
Manufacturers
Track distribution of a
recalled product
HR and payroll
Track changes to an
individual’s profile
Healthcare
Verify and track hospital
equipment inventory
Ledgers with
centralized trust
1

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

S U M M I T © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
NEW
Amazon Quantum
Ledger Database (Amazon QLDB)
Fully managed ledger database with a
central trusted authority

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

Why do immutability and verifiability matter for
customers?
Reduce risk: Ensure safeguarding of critical system-of-record applications where a data loss could
potentially cost millions in lost dollars
Improve data tracking: Helps you or any parties that have access to the system to quickly and
accurately track data’s entire lineage, improving efficiency in tracking the source of issues (e.g.,
manufacturing defects, maintenance of supply-network-data hygiene)
Auditability: Helps reduce downtime caused due to audit and compliance issues, saving hundreds
of productivity hours for your team
Reduce implementation effort: Building immutability and verifiability in a traditional way is time-
consuming, complex, and expensive

How Amazon QLDB works

An example of ledger operations
1
Traci buys a car on August 3, 2013
DMV QLDB database will
add Traci’s record
2
Traci sells car to Ronnie on
September 10, 2014
DMV QLDB database will
add Ronnie’s record
Journal Current stateDMV scenario
3
Ronnie’s car gets in a collision and is
totaled
DMV QLDB database adds new
row called “delete”
DELETE
DATE: 09/02/2016
ID Manufacturer Model Year VIN Owner Date of Purchase
1 Tesla Model S 2012 123456789 Traci Russell 8/3/2013
1 Tesla Model S 2012 123456789 Ronnie Nash 9/10/2014
Indexed history
Indexed history
Current state
3 Deleted
Indexed history
Current state

Uses cryptography to create a digest of change history, acts as a proof
You can use the digest to prove integrity of any transaction
Cryptographic
technique
Digest
Customer, Ronnie can
verify the date Traci sold
the car to him was indeed
7/16
Cryptographic verifiability

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

Customer problems with complex business networks
• Many existing business networks rely on central authorities, which can be
inefficient and expensive, and requires time-consuming auditing
• A consortium could achieve better outcomes by sharing information but cannot
agree on how data can be securely and fairly shared
• Multiple organizations need to independently verify transaction history and
need a single, up-to-date, accurate view of data
• Business logic among multiple organizations could be simplified through
automation
• Asset transfers require an expensive and inefficient escrow
• A public network needs a way to maintain a tamper-proof history of
transactions and global state

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

Blockchain components: Distributed ledger database
The journal records an immutable log of all transactions
and is maintained by nodes in the blockchain network
Block 61
Block hash: 000044bf2efe32
Previous block hash:
000087ea2ffe94
Timestamp
Transaction
Transaction
Block 60
Block hash: 000087ea2ffe94
000057ec2fda71
Timestamp
Transaction
Transaction
Block 59
Block hash:
000057ec2fda71
0000d68b2f0a3b
Timestamp
Transaction
Transaction

Blockchain components: Consensus mechanism
Some important attributes
• Byzantine fault-tolerance requirements
• Transaction rate, energy consumption
• Hardware requirements
• Security

Blockchain components: “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)

Challenges with existing blockchain solutions
Complicated to
manage
Setup is hard Hard to scale Expensive

NEW
Amazon
Managed Blockchain
Fully managed blockchain service, supporting both
Hyperledger Fabric and Ethereum frameworks

What is Managed Blockchain?
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

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 and scalable
Backed with Amazon QLDB technology
Decentralized
Democratically govern the network

How Managed Blockchain works
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

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

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

Who ”owns” the network?
• Networks are decentralized and can remain active even after the
initial creator leaves
• Members vote on who to invite and remove
• Network voting rules to determine how a proposal is approved
• Each member pays for their resources
• Managed Blockchain manages shared components like the
ordering service and networking settings

• 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
• Virtual private cloud (VPC)
endpoints created to access
resource endpoints are billed
separately
• Standard data transfer rates
Pricing dimensions

Starter edition and standard edition
Starter edition
• Test- and small-production networks
• Up to five members/network
• Up to two peer nodes/member
• bc.t3.small and bc.t3.medium
• Elastic peer node storage
• 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 three peer nodes/member
• bc.t3, bc.m5, and bc.c5 instance families
• Elastic peer node storage
• Ordering service provisioned has higher
transaction throughput and availability than
that in a Starter edition network

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

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

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

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

Network 1 – Managed Blockchain
VPC endpoint
VPC endpoint
Account A
Account B

Customer use cases

Customers are experimenting in many industries
Proof of Ownership
Digital Security Trading
Documents and Contracts
Enterprise Platforms
Financial
Insurance
Mortgage Loans
Voting Mechanisms
Patient Records
Corporate Governance
Healthcare and Life Sciences
Real Estate
Legal
Agriculture
Gaming
Media and Entertainment
Transportation
Digital Advertising
Power and Utilities
Retail
Capital Markets
Cloud
OwnershipPrivate markets
Derivatives
Wagers
Global payments
Remittance
Notarization
Equity
Microfinance
Intellectual property
Title record
Escrow
Digital rights
Ecommerce
Debt
Crowdfunding
P2P lending
Healthcare
Voting
Trustees
Smart
contracts
Digital
currency
Securities
Record
keeping
Blockchain
technology

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

Blockchain in financial services

“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

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 (DvP) 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

Summary

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 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

Use the Managed Blockchain service or other compute services as
the foundation for your blockchain infrastructure
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 Amazon 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 Elastic
Compute Cloud
(Amazon EC2)
Amazon Elastic
Container Service
(Amazon ECS)
Amazon Simple
Storage Service
(Amazon S3)
Amazon Elastic
Block Store
(Amazon EBS)
Blockchain solution building blocks on AWS
AWS
CloudHSM
Amazon
Redshift
AWS
LambdaAmazon
DynamoDB
Amazon
Kinesis
Amazon
API Gateway*
Amazon Simple
Queue Service
(Amazon SQS)
Amazon Simple
Notification Service
(Amazon SNS)
Amazon
IoT
Managed
Blockchain
Amazon QLDB

AWS blockchain customers

Next steps
Learn more about our services and sign up for our preview today!
Managed Blockchain
• Managed Blockchain webpage: https://aws.amazon.com/managed-blockchain
• Preview sign-up: https://pages.awscloud.com/AmazonManagedBlockchain-preview.html
• 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
• Amazon QLDB webpage: https://aws.amazon.com/qldb
• Preview sign-up: https://pages.awscloud.com/QuantumLedgerDatabase-preview.html

Thank you!
Darin Briskman
briskman@amazon.com

Do you need a ledger database or a blockchain - SVC208 - Atlanta AWS Summit.pdf

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