1. Hyperledger Fabric Making Blockchain Real for Business
Thanks, pleasure etc.
There is much hype around Blockchain.
Most of this relates to the use of Blockchain to underpin the Bitcoin crypto currency.
Whilst IBM are not interested in Crypto currency, we are very interested in exploring the broader business application of Blockchain technology. This is a transformational opportunity for many of our clients
This touches most all industries – we are making Blockchain REAL for business.
© 2016 IBM Corporation

2. Linux Foundation’s Hyperledger Project
Open Ledger Project announced December 17, 2015 with 17 founders, now over 80 members
Hyperledger Project rebrand in February 2016
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
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
Enable adoption of shared ledger technology at a pace and depth not achievable by any one company or industry
Steering Committee

3. Samsung have just announced they will be joining – like airbus this shows cross industry support
© 2016 IBM Corporation
Pag 3
As of 07 September 2016

4. Blockchain for business …
Shared ledger
Smart
contract
Append-only distributed system of record shared across business network
Business terms embedded in transaction database & executed with transactions
Ensuring appropriate visibility; transactions are secure, authenticated & verifiable
All parties agree to network verified transaction
Privacy
Consensus
… Broader participation, lower cost, increased efficiency
So Blockchain technology comprises these four main blocks, that can lead to increased efficiencies, and cost reduction across the business network.
We will “unpack” CONSENSUS PRIVACY & SMART CONTRACT in the next couple of slides.
Shared LEDGER has been already covered, and a SMART CONTRACT enables the business rules implied by the contract to be embedded in the Blockchain and executed with the transaction

5. Records all transactions across business network
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

6. Smart contract
Business rules implied by the contract … embedded in the Blockchain and executed with the transaction
Verifiable, signed
Encoded in programming language
Example:
Defines contractual conditions under which corporate Bond transfer occurs

7. Ledger is shared, but participants require privacy
Participants need:
Transactions to be private
Identity not linked to a transaction
Transactions need to be authenticated
Cryptography central to these processes
Not every member of business network can see all of the Blockchain
Cryptography controls who can see what
Implies user registration process to build trust network and access permission via certification management

8. … the process by which transactions are verified
Consensus
… the process by which transactions are verified
Anonymous participants
Bitcoin cryptographic mining provides randomized selection among anonymous participants
Significant compute cost (proof of work)
Known & trusted participants
Commitment possible at low cost
Byzantine fault tolerance (BFT)
Multiple alternatives
Proof of stake, where influence is determined by risk of validators
Multi-signatures, validation needs consent from 3 out of 5 validators
Industrial Blockchain needs “pluggable” consensus
CRYPTOGRAPHIC consensus needed to support participant anonymity – this is NO TRUST system
This is expensive, giving a COST to anonymity.
When there is TRUST in a business network this become less, in the limit superfluous
So as TRUST increases then cost of consensus decreases or in the limit can be eliminated
Once participants identity

9. Hyperledger Overview: System Context
Roles & Participants
Membership & Network Entities
<uses >
<to access>
Solution Provider
Network Proprietor
Membership Service
<is-a>
End User
<is-a>
Register Users
Issue Certificates
E-Cert
T-Cert
Chain Transactor
Chain Validator
Manage User Certs.
Chain Network
Validating
Node
Construct Transactions
<node in>
Initiate Transactions
Query
Transactions
Validate
Transactions V
Forward Transactions
Audit
Transactions
<node in>
Non-Validating
Node
Maintain Ledger
Chain Network
<types of>
Execute Consensus & Update Ledger
Industry Network
Regional Network
Application Network
<is-a>
Network Auditor
Chain Auditor

10. Hyperledger Reference Architecture
Hyperledger Interface is REST APIs
Secured and lightweight way to sandbox the “Smart Contract” execution on the validating nodes.
SDK with support for Go, Java and Node.js
Managing identity, privacy, confidentiality and auditability
PKI-based infrastructure to enable a permissioned Blockchain
Manage the distributed ledger through a peer-to-peer protocol, built on HTTP/2. Pluggable consensus algorithm.
Default consensus based on PBFT/Sieve

11. Hyperledger Security Overview
Audit Support
Permissioned Blockchain: PKI-based Certificates
Privacy-preserving Authentication
Transaction Confidentiality
Crypto
Secured
Identity & Role Management: Two Level (E-Cert, T-Certs)
Transaction Privacy:
Anonymity + Un-linkability
TLS Certificates for System-System Messaging

12. Hyperledger Chaincode implements Smart Contract
Chaincode is application code deployed as a transaction to be distributed in the network, managed by validating nodes, and implemented as Docker containers. Chaincode implemented in Go language.
Deploying Chaincode
Chaincode State
World State V
PUT_STATE
GET_STATE
DEL_STATE
RANGE-QUERY_STATE
Deploy Transaction
Chaincode
States
<launch> V
Chaincode
<gRPC Link>
Chaincode
Invoke
Query
Register with Validating Node using ChainCodeID
Call Invoke on Chaincode Interface to initialize
Each Chaincode can define its own persistent state variables (key-value)
Chaincode can update the state based on Invoke Tx
World state refers to collection of states of all deployed chaincode
Organized as a bucket-tree to enable efficient crypto-hash

13. Hyperledger Ledger Message Block{ } Message BlockTransactions{ }
<Hash>
Linked List of Blocks }
Message BlockTransactions{
List of Tx
World State Hash }
Hash of the Block based on FIPS 202

14. Hyperledger Pluggable Consensus Framework
Practical Byzantine Fault Tolerance (PBFT)
If there are f failures then need 3f+1 replicas in an asynchronous network to ensure data integrity
Interfaces all consensus plugins need to implement
consensus
Identifies consensus plugin used by validating peers
SIEVE
controller
Extends PBFT to handle non-deterministic transactions by leveraging Execute-Verify (EVE) replication mechanism.
Enables consensus plugin to interact with OBC stack (e.g. message handling)
helper

15. membership peer orderer
Hyperledger Fabric v1.0 Architecture
membership
keys
Endorser
Committer
Ledger
Events
Chaincode
state
Proposal
enroll
No SPoF
No SPoT
peer
SDK
Submit Tx
orderer
Order TXs in a
batch according
to consensus
Relay
Batch

16. Thank you!
© 2016 IBM Corporation

17. IBM & Hyperledger – Selected References
HSBC, Bank of America, IDA
Trade Finance - Letter of Credit
ABN AMRO
Financial Restructuring & Recovery
Crédit Mutuel Arkéa
Consortium Shared Ledger
Japan Exchange Group (JPX)
Post Trade
Mizuho
Digital Currency
IBM Global Finance
Shadow Chain for Dispute Resolution
Everledger
Diamond provenance
Bank of Tokyo – Mitsubishi UFJ
Business Partner Contracts
CLS
Bilateral netting service
UBS
Digital trade finance
COMPLETE LIST with references. Master list is here >
HSBC, Bank of America, IDA:
ABN AMRO:
Crédit Mutuel Arkéa:
JPX:
Kouvola Innovation:
London Stock Exchange:
Mizuho:
IBM Global Finance:
Everledger
Bank of Tokyo Mitsubishi
China UnionPay
CLS
UBS
IBM GF:

18. Further Information – Use case Links
HSBC, Bank of America, IDA:
ABN AMRO:
Crédit Mutuel Arkéa:
JPX:
Kouvola Innovation:
London Stock Exchange:
Mizuho:
IBM Global Finance: