Blockchain for the Enterprise: Hyperlegder-fabric · 2017-04-28 · Blockchain for the Enterprise: Hyperlegder-fabric Dr. Elli Androulaki Research Staff Member Industry Platforms

© 2016 IBM Corporation

Blockchain for the Enterprise: Hyperlegder-fabric

Dr. Elli Androulaki

Research Staff Member

Industry Platforms and Blockchain

Athens, 28.03.2017

About IBM Research


The World is Our lab

3

3

BrazilBrazil

T.J WatsonT.J Watson

AlmadenAlmaden

AustinAustin IrelandIrelandZurichZurich

HaifaHaifa

AfricaAfrica IndiaIndia ChinaChina

TokyoTokyo

AustraliaAustralia

IBM invested $5.2B on R&D in

2015

More than 3,000 scientists and

engineers

World's largest information technology research

organization


The World is Our lab

Brazil

T.J WatsonAlmaden

Austin Ireland

Zurich

Africa India

Haifa

China Japan

Australia

Ten Medals of Technology

Five National Medals of Science

Six Turing Awards

Six Nobel Laureates

28 ACM Fellows

69 Members 123 IEEE Fellows

98 IBM Fellows

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ThreeKavli Prizes

IBM Research12 Labs on 6 Continents


US Patent Leadership: 24 Years and Counting

7355

IBM

Num

ber o

f Pat

ents

1757

0

2835

19561304 1136

668 614 432 115

8000

4000


IBM Research - Zurich

• Established in 1956• 45+ different nationalities• Open Collaboration:

• Horizon2020: 28 funded projects and 170+ partners• Two Nobel Prizes:

• 1986: Nobel Prize in Physics for the invention of the scanning tunneling microscope by Heinrich Rohrer and Gerd K. Binnig

• 1987: Nobel Prize in Physics for the discovery of high-temperature superconductivity by K. Alex Müller and J. Georg Bednorz

• Binnig and Rohrer Nanotechnology Centre opened in 2011 (Public Private Partnership with ETH Zürich and EMPA)

• 9 European Research Council Grants


About me (& Blockchain)• Graduate of Electrical & Computer Engineering, N.T.U.A, Athens • M.Sc., M.Phil., Ph.D on “E-Commerce & Privacy”, Columbia University, NY• Post-doctoral Researcher, ETH, Zurich• Currently, Research Staff Member, IBM Research - Zurich

• Research Focus: Applied Crypto, Cloud (Storage) Security, Blockchain Security

• Me & Blockchain:• Research on Security of Bitcoin since 2011 • IBM Global Technology Outlook 2014 (2013)• Authored Book on “Bitcoin and Blockchain Security” (2016)• Lead IBM contributions on security components of Hyperledger Fabric since its birth (2015)

Blockchain for the Enterprise: Hyperlegder/fabric


Blockchain systems

• Introduced in 2008

• Decentralized networks to decide on the order in which network transactions are validated & appended to a system-wide ledger

• Emerging:– Integrated in multiple businesses around the globe– Market sizes of Billions USD– An ecosystem around them

© 2015 IBM Corporation10

Client Validating EntitiesEnd-user

Alice

Peer

Peer

Peer Peer

Peer

Peer

Ledg

er

Ledg

erLedger

Ledg

er

LedgerLedger

Ledg

er

Transaction

• Transactions are payment transactions • Users and validating peers are the same set

− through self-generated pseudonyms• Miners “vote” with their computing power the executed result• Motivation for good behavior through the generation of BTC coins

Blockchain systems: the example of Bitcoin



Alice

Peer

Peer

Peer Peer

Peer

Peer

Ledg

er

Ledg

erLedger

Ledg

er

LedgerLedger

Ledg

er

Transaction

• Transactions can include smart contracts (solidity)• Users and validating peers are the same set

− through self-generated pseudonyms• Miners “vote” with their computing power the executed result• Motivation for good behavior through the generation of ETHER coins

Blockchain systems: the example of Ethereum

Blockchain for the Enterprise?


Problem: Existing electronic networks that transfer the ownership of assets between parties according to business rules are inefficient, expensive and vulnerable.

Counter-partyrecords Bank records

Party C’s Records Auditor records

Party B Records

Party A’s Records

System integrations grow x(x-1) with each additional party x

API-integrations

Hack


Solution: A trusted, distributed, permissioned ledger or otherwise a permissioned blockchainsystem

Counter-partyrecords Bank records

Party C’s Records Auditor records

Party B Records

Party A’s Records


Solution: Blockchain

Counter-parties Banks

Party C Auditors

Party B

Party A

Simple: no centralized control points; spread risk = lowered costs; hardened inside vs. perimeter

Shared replicated ledger: a peer-to-peer append-only transaction database, replicated across organizational boundaries/legal entities

Embedded crypto layer: supporting secure authenticated verifiable multi-party transactions via tokenization, digital identity, digital signatures

Business rules (evolving to Smart Contracts): ability to specify business logic, embed it in the transaction database, and couple execution of the logic with transaction processing


Automation of trusted processes

Cost-effective Discoverability Trusted record-keeping

BlockchainShared

replicatedledger

Crypto logic

Business logic

Blockchain for the enterprise


Automation of trusted processes

Cost-effective Discoverability Trusted record-keeping

BlockchainShared

replicatedledger

Crypto logic

Business logic

Accountability/non-repudiation Auditability Strong identity

management Privacy Performance

Blockchain for the enterprise

Blockchain for the enterprise: Hyperledger-fabric


Chairman Blythe Masters/DAH

Executive Director Brian Behlendorf

Technical Chair Chris Ferris/IBM

Contribution 44,000 lines of code in February 2016

Sprint to one codebase with unified thinking

Staged releases

Hyperledger and Hyperledger-fabric

19

Open-source collaboration under Linux Foundation www.hyperledger.org

Hyperledger Founded in Dec ‘15 150+ members Collaborative effort 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

Open source, open standards, open governance Code contributions from several members

Hyperledger-fabric (former Open-Blockchain) Donated by IBM to the open-source community Actively developed by IBM, LSEG, DAH, others https://gerrit.hyperledger.org


QUICK FACTS

Chairman Blythe Masters/DAH

Executive Director Brian Behlendorf

Technical Chair Chris Ferris/IBM

Contribution 44,000 lines of code in February 2016

Sprint to one codebase with unified thinking

Staged releases

AssociateUpdated Jan 2017

PremierGeneral

Hyperledger Project Members


fabricClient Validating Entities

Peer

Peer

Peer Peer

Peer

Peer

Ledg

er

Ledg

er

Ledger

Ledg

er

LedgerLedger

Ledg

er

fabricClientEnd-user

Bob

Transaction(invoking contracts)

• Permissioned system; strong identity management• Pluggable & easily extensible membership framework

• Client library to allow applications to embed their logic to fabric transactions • Business logic incorporated into transactions by means of chaincode• Pluggable consensus protocol, currently CFT Kafka, prototype implementation of pBFT

PermissionIssuer

ApplicationAlice

Hyperledger-fabric modelTransaction

(defining contracts)


AccountabilityNon-repudiation

Strong identity management

Privacy / Access Control Audit support

Compatibility with standards

Performance

Scalability

Pluggable Components

Selective participation to authorized users

User activity & contract logic concealable to unauthorized entities

Entities are accounted for the transactions they create, cannot forge others’ transactions

AuthorizedExecution

Logic is executed only after authorized entity request Liveness

ConsistencyCorrect & consistent transaction execution among members, e.g., dealing with non-determinism

Optimizing transaction throughput,

parallelization

Viable system for

large number of participants

Hyperledger-fabric: Our team’s involvement

IBM & Blockchain

© 2015 IBM Corporation24Page© 2016 IBM Corporation

IBM & Hyperledger Fabric in action

Technology

Hosting and Support

Making blockchainreal for clients

High Security Business Network IBM Bluemix

EngagementGarages

Linux Foundation Hyperledger Fabric Fabric Composer


1. Discuss Blockchaintechnology

2. Explore customer business model

3. Show BlockchainApplication demo

1. Understand Blockchain concepts & elements

2. Hands on with Blockchain on Bluemix

3. Standard demo customization

1. Design Thinking workshop to define business challenge

2. Agile iterations incrementally build project functionality

3. Enterprise integration

1. Scale up pilot or Scale out to new projects

2. Business Process Re-engineering

3. Systems Integration

Remote or face to face Remote or face to face Face to face Face to face

Free of charge Free of charge For fee For fee

Let’s Talk

BlockchainHands-on

First Project

Scale

Engagement model overview


Blockchain: How to decide whether to use it?

26

1By design, no one party can modify, delete, or even append any record without consensus, making the system useful for ensuring the immutability of contracts and other legal documents.

Smart contracts aim to provide security superior to traditional contract law and to reduce other transaction costs associated with contracting.

When everyone on an exchange can view the same ledger, it is easy to broadcast an intention (or offer) by appending it. For example, in a trading network, all ask and bids would be visible to every network participant.

Blockchain networks allow each participant to create customized solutions using their own proprietary business logic while running on the same common ledger.

2 3 4

Very high Performance(sub)Millisecond Transactions?

Are You Managing Contractual

Relationships?

Consider Alternative

Approaches

Do You Need to Keep Your Transactions

Private?

Does Identity Matter?

Does it Require Greater Than Two Parties?

Does This Require a Market Approach?

Are You Looking to Reduce Costs?

Are You Looking to Improve

Discoverability?Let’s Talk

Are you working with Complex Business

Logic?

Yes

Yes YesNo

4

No

Yes3

Yes

YesYes1

Yes2

Yes

No

27© 2017 IBM Corporation

Benefits1. Trust increased, no authority

"owns” provenance

2. Improvement in system utilization

3. Recalls "specific" rather than cross fleet

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

Example:Supply chain


Benefits1. Lowers cost of audit and

regulatory compliance

2. Provides “seek and find” access to auditors and regulators

3. Changes nature of compliance from passive to active

What • Financial data in a large organization dispersed throughout many divisions and geographies

• Audit and Compliance needs indelible record of all key transactions over reporting period

How • Blockchain collects transaction records from diverse set of financial systems

• Append-only and tamperproof qualities create high confidence financial audit trail

• Privacy features to ensure authorized user access

Example:Audit and compliance


Low liquidity securities trading and settlement

Reward points management

Contract Management

FX Netting Settlements through digital currency

Identity management

Food Safety Trade Finance Channel Financing

Selected References


Summary

Blockchain …– is a shared, replicated, permissioned

ledger technology– can open up business networks by

taking out cost, improving efficiencies and increase accessibility

– addresses an exciting and topical set of business challenges, which cross every industry

IBM …– supports the Linux Foundation

Hyperledger open standard, open source, open governance Blockchain

– has an easy to access, proven and incremental engagement model giving customers the confidence to get started NOW


References

HSBC, Bank of America, IDA: http://www.coindesk.com/hsbc-bank-america-blockchain-supply-chain/ABN AMRO: https://www.abnamro.com/en/newsroom/blogs/arjan-van-os/2016/walking-the-walk-exploring-the-power-of-blockchain.htmlCrédit Mutuel Arkéa: http://www.coindesk.com/ibm-completes-blockchain-trial-french-bank-credit-mutuel/JPX: http://www.ibm.com/press/us/en/pressrelease/49088.wss and http://www.jpx.co.jp/english/corporate/research-study/working-paper/b5b4pj000000i468-att/E_JPX_working_paper_No15.pdfKouvola Innovation: http://www.ibm.com/press/us/en/pressrelease/49029.wssLondon Stock Exchange: http://www.ibtimes.co.uk/linux-foundation-blockchain-consortium-digital-asset-ibm-credits-london-stock-exchange-board-1533798Mizuho: http://www.coindesk.com/mizuho-digital-currency-powered-blockchain-settlement/IBM IGF: http://www.coindesk.com/ibm-building-blockchain-dispute-resolution-system/Northern Trust: http://www-03.ibm.com/press/us/en/pressrelease/51655.wssMaersk: http://www.reuters.com/article/us-usa-blockchain-ibm-idUSKBN16D26QEverledger: www.everledger.io


Community + CodeLinux Hyperledger Project

Open Source Code: Blockchain for business;Consensus | ProvenanceImmutability | FinalityOpen Governance – 100 member cross industry board

CloudIBM Blockchain

IBM managed Blockchain service on IBM Cloud and z Systems;Identity | Consensus | System Integration | Hardware-assist for Performance & SecurityIBM Blockchain on Bluemix

ClientsBlockchain SolutionsBlockchain Garage

Making Blockchain real for businessBlockchain Garage; New York | London | Singapore | TokyoBlockchain Services Practice

Blockchain for Business – Our Point of View


Supporting serious blockchain deployment!

Hyperledger fabric on Docker Hub

Fastest development of blockchain solutionsCertified Hyperledger fabric instancesSupported by IBM – available cross platform

High security business blockchain on Bluemix

Dedicated compute power – isolated partitionSecure key management (FIPS 140-2 Level 4)

Tamper resistant service containerPerformance optimized (Operating System & Privacy Services)

Bluemix blockchain service

Fast blockchain network on Bluemix – also now ChinaSamples for deployment, customization & usageTool support for development and deployment

Blockchain now


Benefits1. Consolidated, consistent

dataset reduces errors

2. Near real-time access toreference data

3. Naturally supports code editing and routing code transfers between participants

What • Competitors/collaborators in a business network need to share reference data, e.g. bank routing codes

• Each member maintains their own codes, and forwards changes to a central authority for collection and distribution

• An information subset can be owned by organizations

How • Each participant maintains their own codes within a Blockchain network

• Blockchain creates single view of entire dataset

Example:Shared reference data


Blockchain systems: concepts of interest

35


Alice

Peer

Peer

Peer Peer

Peer

Peer

Ledg

er

Ledg

er

Ledger

Ledg

er

LedgerLedger

Ledg

er

Transaction

Transactions – Transaction Validation• Simple, e.g., payment transactions (Bitcoin)• More complex, e.g., arbitrary logic (Solidity)

Participant identities:• Clients-peers can be the same

entities• Self-generated pseudonyms• Other

Underlying (order) agreement protocol:• Can be PoW (e.g., Bitcoin,

Ethereum)• Can be pBFT, CFT• Other

Rules / Ledger content:• All tx-s included• Validity-based• Other


… inefficient, expensive, vulnerable

Participant C’s records

Auditor records

Regulator records

Participant A’s records

Bank records

Participant B’s records

Problem…


… A trusted, distributed, permissioned ledger

Participant C’s records

Auditor records

Regulator records

Participant A’s records

Bank records

Participant B’s records

Blockchain

Solution …

Documents

Blockchain for the Enterprise: Hyperlegder-fabric · 2017-04-28 · Blockchain for the Enterprise: Hyperlegder-fabric Dr. Elli Androulaki Research Staff Member Industry Platforms