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Blockchain for Modern Business Applications
March 20th, 2018
ABC Blockchain Breakfast UpdateAmerican Business CouncilCapital Club, DIFC
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The Business Value of Blockchain
"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’s the blockchain...“
—Harvard Business Review"The Impact of Blockchain Goes Beyond Financial Services,"
“$176 billion in added business value by 2025; that total reaches $3.1 trillion by 2030.”
“10% of the Global GDP will be stored in blockchain technology by 2027”1
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The Promise of Blockchain
"We are in the process of developing a new operating system for the planet.”
— Jeremy Wilson Vice Chairman of Corporate Banking
Barclay’s BankBlockchain for Finance conference,
October 2017
“$176 billion in added business value by 2025; that total reaches $3.1 trillion by 2030.”
“10% of the Global GDP will be stored in blockchain technology by 2027”1
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Blockchain OpportunitiesChallenges At the Enterprise Boundary
• Avoiding the cost and risks of intermediaries
• Manual, error-prone information exchange and
processes across enterprise boundaries
• High cost and delays of offline reconciliations
• Poor audit trail due to cross-ERP discrepancies
• High risk & cost of fraud in cross-company transactions
• Lack of real-time information visibility
Shipment• Exceptions• Paperwork
Customs• Acceptance• Compliance
Shipment• Exceptions• Paperwork
Associate Mfg.• Assembly• Test Certifications
• Acceptance• Payment
Vision Operations
Raw Materials Producer
EDIFTP
Simulator
SCM Cloud
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Similar Problems Exist Inside Enterprise
• Multiple silos of ERP or SOR systems
• Intercompany processing between multiple entities
• Lack of real-time information visibility between divisions or units in different countries or provinces
• Easier to tackle internal challenges first before trying to deal with other companies
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Blockchain is a system:
• That maintains a distributed ledger in a peer-to-peer network
• That allows multiple parties that may not fully trust one another to do business securely
• That reduces the need for third-party intermediaries
• That enables real-time & unalterable records replicated among participants
What is Blockchain?
DISTRIBUTED LEDGER
CONSENSUS
SMART CONTRACTS
PRIVACY
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Buzzwords You Might Hear
• Distributed Ledger Technology (DLT)• Smart Contract• Nodes• Immutable• Non-repudiation• Peer to Peer• Ethereum• HyperLedger• Corda• Decentralized• Consensus• Cryptocurrency
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Blockchain is decentralized in natureTraditional Database
When the central organization fails, the whole network can be become inaccessible
Blockchain
All data is connected and controlled by a centralized organization.
• Limited access by one or more person to same set of data
• Bottlenecks can occur with high traffic
• Highly dependent of network connectivity
Data is directly shared across boundaries of trust, without requiring a centralized intermediary or complex data transfer and reconciliation processes• Datastore can be directly shared by
multiple organizations• Every node in a blockchain
independently verifies and processes every transaction
Replicated data controlled by multiple organizations• No single point of failure• No single point of control (no
single SYSDBA) or potential for compromise
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Permissioned/Consortium Permissioned/Private Public
Access to Network Members invited to enroll One entity controls all nodes
Open Access, Permissionless
Validators Pre-authorized validators in R/W or R/O mode
Pre-authorized validators in R/W or R/O mode
Anonymous fully decentralized validation
Blockchain Technologies Hyperledger, Corda Hyperledger, Corda Bitcoin, Ethereum
Consensus
Transactions throughput 100’s -1000’s/sec 100’s -1000’s/sec 7-15/sec
Types of BlockchainsValidator Node
Read Only Node
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Three Major Blockchain Technology ComparisonsCharacteristic Ethereum Hyperledger Fabric R3 Corda
Description Generic blockchain platform Modular blockchain platform Specialized for banking
Governance Ethereum developer and banks via the EEA (Enterprise Ethereum Alliance)
Linux Foundation R3 Membership
Mode of Operation Permissionless (Public) or Permissioned (EEA)
Permissioned Permissioned
Consensus Mining PoW (Proof of Work) and others POS (Proof of Stake)Ledger Level
Multiple approaches (e.g., Kafka-based ordering service)
Specific understanding of consensus based on notary nodes
Privacy No Yes, confidentiality domains allow members to conduct private transactions over confidential channels
Mandatory, all transactions are visible only to participants
Smart Contract Languages
Solidity GO, Java Kotlin, Java
Currency Ether or Tokens via SC None built-in; Currency and tokens via smart contracts
None
Who is Using Fintechs, Banks, Enterprises Enterprises, Banks Banking only
Frothy ICOs (Initial Coin Offerings)
Yes No No
Oracle confidential
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Supply Chain Contract Manufacturing
Common Challenges• Product
• Where is it, where was it produced?
• Content and Specifications
• Are there banned materials included?
• Does it meet my specifications and export compliance rules?
• Financials
• When is ownership transferred?
• Does the invoice match & should I pay it?
• Exceptions
• How to handle them?
Shipment• Exceptions• Paperwork
Customs• Acceptance• Compliance
Shipment• Exceptions• Paperwork
Associate Mfg.• Assembly• Test Certifications
• Acceptance• Payment
Vision Operations
Raw Materials Producer
EDIFTP
Simulator
SCM Cloud
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Supply Chain Contract Manufacturing
Blockchain establishes a trusted business network between the organizations
• Peer nodes representing each entity
• All transactions that need to be shared are reflected real-time in the DLT without offline reconciliations or centralized 3rd parties
• Tamper-proof records available in their local peer nodes to all authorized participants
• Smart contracts executed in the blockchain verify the information , take action or send back events to enterprise systems.
Shipment• Exceptions• Paperwork
Customs• Acceptance• Compliance
Shipment• Exceptions• Paperwork
Associate Mfg.• Assembly• Test Certifications
• Acceptance• Payment
Vision Operations
Raw Materials Producer
Simulator
SCM Cloud
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Components of a Blockchain Platform
15
Validating Nodes / Peers
Ordering Service
Smart Contract/ Chaincode
Ledger (World State)
Applications
REST Proxy
Membership Service
Admin Console
REST Proxy
Users and ApplicationsUsers and
ApplicationsApplications(SDK based)
Users and ApplicationsUsers and
ApplicationsApplications(REST API)
Vendor Managed Platform
Peer Node
Smart Contract
Ordering Service
Distributed Ledger
Membership Service
Blockchain Network Console
Smart Contract
Peer Node
Gateway
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Components of a Blockchain Cloud ServiceValidating Nodes /
Peers
Ordering Service
Smart Contract/ Chaincode
Ledger (World State)
Applications
REST Proxy
Membership Service
Admin Console
REST Proxy
Users and ApplicationsUsers and
ApplicationsApplications(SDK based)
Vendor Managed Platform
Peer Node
Smart Contract
Ordering Service
Distributed Ledger
Membership Service
Blockchain Network Console
Smart Contract
Peer Node
Gateway
Users and ApplicationsUsers and
ApplicationsApplications(REST API)
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Business Applications
Procurement
Sales and Service
Supply Chain Manufacturing
Finance HR
REST Proxy
Users and ApplicationsUsers and
ApplicationsApplications(SDK based)
Vendor Managed Platform
Peer Node
Smart Contract
Ordering Service
Distributed Ledger
Membership Service
Blockchain Network Console
Smart Contract
Peer Node
Gateway
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• Birth and death certificates
• Business licenses
• Property ownership (land titles & deeds, cars, yacht, plane, etc.)
• Driver licenses
• University transcripts/degree certifications
• “KYC” for security cleared citizens
• Customs documentation, certifications
• Taxes & dues
• Quality control inspection reports
• Food genealogy and provenance tracing
• Pharmaceuticals production & importation
• Bids transparency and tracking
• Fulfillment tracking linked to bids
• Taxes across jurisdictions
• Benefits/welfare digital wallets
• Citizen records updates for multiple jurisdictions
18
Blockchain Conversations in Public Sector
Government Records Regulatory Certifications
Procurement
Citizen ServicesCustoms
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• Intra-Bank Cross Border Payments/Remittances
• Bank-to-Customer Trade Transactions
Supplier / Vendor Finance
Invoice Factoring
• Component Lifecycle Tracking
• Farm-to-table food provenance
• Country of origin traceability
• Electronic compliance records
• Quality control records
• Roaming traffic across networks
• Inter-telco cost/revenue netting
• Electronic Health Record
• Service provider credential management
• Clinical trials
• Recruitment – background checks
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Blockchain Conversations in Private Sector
Financial Services
Manufacturing and Retail
Telco
Healthcare
Cross Industry
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Autonomous Business Processes
Order
InvoiceCustomer
25
Use case: Customer Invoice Factoring
Factoring Proposal
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Autonomous Business Processes
Order
InvoiceCustomer
26
Use case: Customer Invoice Factoring
BlockchainEnabled BusinessServices
Factoring ProposalAutonomous Automated Processes
Artificial Intelligence
Machine Learning
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IncreaseBUSINESS VELOCITY
• Rapid on-boarding of local and global partners to a trusted business network
• Real-time information visibility across partner ecosystem
• Accelerate transactions, eliminate reconciliations and optimize business decisions
• Enable new business models and revenue streams by reaching untapped markets
• Speed up existing business processes through blockchain integration accelerators
• Securely integrate on-prem ERP or SaaS applications with BlockchainServices.
Drive INNOVATION
• Eliminate intermediaries and related costs, delays, and risks
• Protect against single points of failure and insider attacks
• Reduce downtime risks with a resilient, enterprise-grade as-as-service offering
• Outsource to Oracle the burden and risk of keeping up with rapidly evolving technology
ReduceCOST & RISK
Business Value
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