Understanding Blockchain Building Blockchain Applications...–Closed ecosystem: members are invited...

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

Understanding Blockchain and How to Start Building Blockchain Applications

Emmanuel Abiodun, Architect Deepak Goel, Sr. Director, Product Development October 3rd, 2017


One of Today’s Most Disruptive Emerging Technologies

“The technology most likely to change the next decade of business is not the social web, big data, the cloud, robotics or even artificial intelligence. It is the blockchain…”

-Harvard Business Review

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$176 Billion business value-add of blockchain by 20252

10% of the Global GDP will be stored in blockchain technology by 20271

9 out of 10 enterprises will do a blockchain project2

1World Economic Forum: Deep Shift - Technology Tipping Points and Societal Impact, Sept 2015 2Blockchain: How Real Is The Market?, Gartner Webcast


Program Agenda

What is Blockchain?

Blockchain Platforms and Applications

Use Cases

Demo

Q&A

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2

3

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5

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Copyright © 2017, Oracle and/or its affiliates. All rights reserved. | Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

What is Blockchain?

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Copyright © 2017, Oracle and/or its affiliates. All rights reserved. | 6

Blockchain can bring greater transparency and accountability across complex business networks, enabling real-time tracking of assets. There is no central repository for data and privileged network participants can read and validate the ledger with no single point of failure.


Bitcoin & The Satoshi Whitepaper

• Anonymous Author

– Under Pseudo name, Satoshi Nakamoto

• Paper described a decentralized timestamping network used by a digital currency called bitcoin.

• PoW (proof of work provides BFT via process called “mining”.

• Network protected by incentives.

Released 2009

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A Bitcoin Transaction

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Image credit : https://bitcoin.org/bitcoin.pdf


A Bitcoin Block

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A Blockchain Is …..

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…… is a system for maintaining distributed ledgers in a way that allows organizations who do not fully trust each other to agree on the updates to the ledger using peer-to-peer protocols rather than a central 3rd party or an offline reconciliation process.


Four Key Properties of Blockchains

• Shared & Transparent

– All participants see consistent data.

– Updates replicated across participants.

– Authorized participants can access their data.

• Validation & Non-Repudiation – Consensus from a subset of nodes on

new blocks/transactions. – Existence and validity of the record

can not be denied.

• Immutable

– Each new block contains a hash of the previous block, giving a chain.

– Distributed among participants.

– Records cannot be undetectably altered or deleted, only appended.

• Can be Encrypted for Confidentiality

– All records are encrypted

– Only those authorized to have the corresponding keys can view the data

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Two Types of Blockchain

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• Public (a.k.a. “Permissionless”) – Anyone can join the network and have a copy of the ledger, e.g.,: Bitcoin, Ethereum

– This involves the computer resource intensive mining process to add blocks cryptographically

– Consensus models based on computationally expensive algorithms requiring the processing power of many nodes to ensure security.

• Permissioned – Closed ecosystem: members are invited to join and keep a copy of the ledger

– Who members are in the real (legal) world is known (to at least the operators of the blockchain, but not necessarily all participants)

– Consensus protocols depend on knowing who the members are, e.g., PBFT, for greater scalability


Blockchain Technology Disruptive Characteristics/Benefits

• Decentralized, peer-to-peer network – No central, controlling authority

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Eliminating intermediaries means reduced transaction costs and near real-time transaction execution

Increased confidence in the information and reduced fraud opportunities

• Immutable transaction history – Impossible to make changes to existing transactions in a blockchain without detection

Automated business processes in a trusted way. Represent any asset digitally.

• Smart contracts – Business logic deployed on a blockchain and shared and validated by participants.

Increased auditability and trust, reduce cost of fraud and audits

• Transparent – Transactions on a blockchain are visible to the authorized participants.

• Distributed ledger - All participants maintain a copy of the ledger

Eliminates manual efforts and delays due to reconciliation needs since data consistency is a key attribute of the distributed ledger


In Summary

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Blockchain Ties Together Many Existing Software Architectural Paradigms where Distributed Computing meets Microservices meets, Server-less Architecture, Meets Log Based Architecture….for Business Networks or Consortiums


Blockchain Platforms and Applications

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Components of a Permissioned Blockchain Platform

Confidential – Oracle Internal/Restricted/Highly Restricted 16

Nodes

Consensus

Smart Contracts

Ledger (World State)

Applications (D-apps)

Admin Console

Membership Service


Ethereum Corda Hyperledger Fabric

Governance Ethereum Developers R3 Linux Foundation

Security & Access Public Permissioned Permissioned

Transaction Validation Proof of work via

miners

Via notaries Peers

Smart-Contract Serpent & Solidity

(Touring Complete)

Kotlin, Java Java, Go…..

Platform Generic Blockchain

platform

Financial Services

Focused platform

Modular Blockchain

platform

Data Privacy None All transactions are

peer to peer

Channels

Currency Ether None None

Consensus Per transaction Notaries enforce

transaction finality

On ordering of updates

to the world state

Popular Open Source Blockchain Implementations


Oracle Blockchain Cloud Service Microservices Architecture Leveraging Cloud Native Platform

Infrastructure Services OPC & OCM running ACCS (Managed Docker Container service), IDCS (security/identity service),

EHCS (Kafka service)

Core Services Blockchain Cloud Service (BCS) core: Peers, Smart Contracts, REST Proxy,

Membership Services, Ordering Service

Integration Services BCS REST APIs for Operations

and Ledger Queries/Transactions

Data Services OPC Storage Cloud –

Object Store

Administration and Operations Support (Ops) OPC Operations and BCS Administration Console with REST APIs

Oracle Blockchain Cloud Service (BCS)

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Pre-assembled Managed service Production-ready Public or private cloud


Oracle Blockchain Cloud Service Ecosystem

Infrastructure Services OPC & OCM running ACCS (Managed Docker Container service), IDCS (security/identity service),

EHCS (Kafka service)

Core Services Blockchain Cloud Service (BCS) core: Peers, Smart Contracts, REST-Proxy

Membership Services, Ordering Service, .

Integration Services BCS REST APIs for Operations

and Ledger Queries/Transactions

Data Services OPC Storage Cloud –

Object Store

Administration and Operations Support (Ops) OPC Operations and BCS Administration Console with REST APIs

Oracle Blockchain Cloud Service (BCS)

ACCS

PROCESS

INTEGRATION

APP BUILDER

DEVELOPER

SOA

MOBILE

PaaS

JCS

IaaS

COMPUTE CONTAINER

ON-PREM

ERP CX HCM SCM EPM IoT SaaS

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Use Cases

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Blockchain Use Cases

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• Blockchain is not a solution to all problems!

• A few questions to ask to determine blockchain applicability

– Is my business process pre-dominantly cross-departmental/cross-organizational?

– Is there a trust issue among transacting parties?

– Does it involve intermediaries, possibly corruptible?

– Does it require periodic reconciliations?

– Is there a need to improve traceability or audit trail?

– Do we need real time visibility of the current state of transaction?

– Can I improve business process by automating certain steps in it?


Blockchain Applications in Financial Services

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Retail payments

• Parallel currency systems (traditional & crypto currencies)

• Remittances

Wholesale payments

• Correspondent banking networks

• Cross-border FX

Capital markets & securities servicing

• Securities settlement

• Asset/collateral documentation

Trade finance & transaction banking

• Supply chain and receivables finance

• Commodities trade finance

From: Blockchain in Capital Markets: The Prize and the Journey, February 2017 Copyright© 2017 Oliver Wyman and Euroclear.


Other Use Cases: Government, Healthcare, Supply Chain…

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Government and NGOs

• Release and storage of

• Birth and death certificates

• Business licenses

• Property ownership (land titles and deeds, cars, yacht, plane, etc.)

• Passports

• Digital voting

• Universities use blockchain for college transcripts

Healthcare

• Electronic Health Record

• Secure storage and sharing

• Clinical trials: store trial results in a tamper proof way

• Anti-counterfeit drugs

• Integration with IoT devices monitoring health

Supply Chain

• Genealogy and traceability of parts, components, ingredients in Life Sciences, Food & Beverage, Electronics, Automotive through electronic records

• Electronic compliance records

• Quality control records

Others

• Baggage tracing across connections

• Loyalty programs for associations of SMEs

• Tamper-proof IoT sensor data, non-repudiation of monitored activities


Trade Finance - Letter of Credit: Current Process

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Buyer Seller

Challenges • Each participant has its own view of

the transaction

• Reconciliation is slow, delaying payments

• Tracking problem shipments is manual and expensive


Buyer Seller

Trade Finance - Letter of Credit: Process With Blockchain

Benefits • Direct exchange of documents, e.g.

letter of credit and bill of lading

• Automated process reduces time taken and reduces human errors, possibility of fraud

• Each participant can view current status of the transaction

• Future possibility of leveraging IoT/blockchain integration by using smart devices to tracks goods


Blockchain in Action: A Demo

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Solving Procurement Problems

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To increase tractability of vehicle parts for a more efficient recall process, a major automaker recently integrated Blockchain with their ERP software. 4 dealerships recently became participants to this network, each integrating their own ERP software enabling them to share information on the Blockchain.


Manufacturer

Network Setup

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Dealer A

Dealer B

Dealer C

Dealer D

Channel 2

Channel 1

Channel 4

Using Channels Organizations can only read the ledgers they are granted access to.

Channel 3


Q&A

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Safe Harbor Statement

The preceding is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

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Understanding Blockchain Building Blockchain Applications...–Closed ecosystem: members are invited...

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