Blockchains at IBM

Earth globe within a locked cage

img_6985-2I attended IBM Edge 2016 (videos available here, login required) this past week and there was a lot of talk about their new blockchain service available on z Systems (LinuxONE).

IBM’s blockchain software/service  is based on the open source, Open Ledger, HyperLedger project.

Blockchains explained

1003163361_ba156d12f7We have discussed blockchain before (see my post on BlockStack). Blockchains can be used to implement an immutable ledger useful for smart contracts, electronic asset tracking, secured financial transactions, etc.

BlockStack was being used to implement Private Key Infrastructure and to implement a worldwide, distributed file system.

IBM’s Blockchain-as-a-service offering has a plugin based consensus that can use super majority rules (2/3+1 of members of a blockchain must agree to ledger contents) or can use consensus based on parties to a transaction (e.g. supplier and user of a component).

BitCoin (an early form of blockchain) consensus used data miners (performing hard cryptographic calculations) to determine the shared state of a ledger.

There can be any number of blockchains in existence at any one time. Microsoft Azure also offers Blockchain as a service.

The potential for blockchains are enormous and very disruptive to middlemen everywhere. Anywhere ledgers are used to keep track of assets, information, money, etc, that undergo transformations, transitions or transactions as they are further refined, produced and change hands, can be easily tracked in blockchains.  The only question is can these assets, information, currency, etc. be digitally fingerprinted and can that fingerprint be read/verified. If such is the case, then blockchains can be used to track them.

New uses for Blockchain

img_6995IBM showed a demo of their new supply chain management service based on z Systems blockchain in action.  IBM component suppliers record when they shipped component(s), shippers would record when they received the component(s), port authorities would record when components arrived at port, shippers would record when parts cleared customs and when they arrived at IBM facilities. Not sure if each of these transitions were recorded, but there were a number of records for each component shipment from supplier to IBM warehouse. This service is live and being used by IBM and its component suppliers right now.

Leanne Kemp, CEO Everledger, presented another example at IBM Edge (presumably built on z Systems Hyperledger service) used to track diamonds from mining, to cutter, to polishing, to wholesaler, to retailer, to purchaser, and beyond. Apparently the diamonds have a digital bar code/fingerprint/signature that’s imprinted microscopically on the diamond during processing and can be used to track diamonds throughout processing chain, all the way to end-user. This diamond blockchain is used for fraud detection, verification of ownership and digitally certify that the diamond was produced in accordance of the Kimberley Process.

Everledger can also be used to track any other asset that can be digitally fingerprinted as they flow from creation, to factory, to wholesaler, to retailer, to customer and after purchase.

Why z System blockchains

What makes z Systems a great way to implement blockchains is its securely, isolated partitioning and advanced cryptographic capabilities such as z System functionality accelerated hashing, signing & securing and hardware based encryption to speed up blockchain processing.  z Systems also has FIPS-140 level 4 certification which can provide the highest security possible for blockchain and other security based operations.

From IBM’s perspective blockchains speak to the advantages of the mainframe environments. Blockchains are compute intensive, they require sophisticated cryptographic services and represent formal systems of record, all traditional strengths of z Systems.

Aside from the service offering, IBM has made numerous contributions to the Hyperledger project. I assume one could just download the z Systems code and run it on any LinuxONE processing environment you want. Also, since Hyperledger is Linux based, it could just as easily run in any OpenPower server running an appropriate version of Linux.

Blockchains will be used to maintain the system of record of the future just like mainframes maintained the systems of record of today and the past.

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