IBM Corp. won’t leave much doubt this week about its enthusiasm for blockchain, the distributed ledger technology that threatens to disrupt a wide swath of industries.
On Monday, as part of a raft of announcements at its InterConnect cloud show in Las Vegas, the company will announce what it says is the first commercial blockchain service designed for enterprise use. It’s also announcing partnerships to build a new digital identity network based upon IBM Blockchain and a platform for trading green assets based upon the Linux Foundation’s Hyperledger Fabric.
Blockchain is a protocol that enables the rapid exchange of digital assets — such as payments, photos and contracts — between two or more parties in a secure, verifiable and auditable process that doesn’t require a middleman. It’s best known as the technology foundation underlying the bitcoin currency, but its potential applications are far broader.
“This is the first assignment I’ve had where I can tell my kids we’re really helping to make the world a better place,” said Gennaro Cuomo (pictured), an IBM Fellow and vice president of blockchain technologies in IBM’s hybrid cloud group. (* Disclosure below.)
Because blockchain maintains a persistent record – or ledger – of every step in a series of transactions, it provides full visibility into the lifecycle of a product, supply chain or transaction. For example, “blockchain can help limit the outbreak of salmonella,” Cuomo said. “Imagine scanning the label of a sandwich at an airport and being able to see the lineage of every ingredient. If you get sick from eating the sandwich, you can track it back to the farm where the lettuce came from.”
Blockchain also enables data disclosure to be limited only to what is needed for a transaction. This could dramatically cut the incidence of identity theft, for example. Blockchain will also enable entirely new business models to emerge. Cuomo pointed to the example of Everledger Ltd., whose blockchain service is being used by diamond makers to ensure regulatory compliance. The company used its improved supply-chain visibility to offer insurance to its customers. “It’s a new business model,” he said.
The businesses that spin out of blockchain, along with other “cognitive” services such as IBM’s Watson artificial intelligence platform, could help provide a significant boost to IBM, according a report out last week from Morgan Stanley that said IBM’s cloud business is underappreciated. “What’s more, 20 percent upside in our base case may prove conservative if cognitive services like Watson and Blockchain deliver given the potentially higher value/higher margin characteristics of these businesses,” Morgan Stanley analyst Katy Huberty wrote.
The end of identity checks
“The days of long identity checks will be numbered,” Cuomo said, ticking off a list of benefits. “You”ll provide a fingerprint and your identity will be verified via the blockchain. Banks love it for dealing with regulations like anti-money laundering. We can make a dent in identity theft and rid the world of passwords.”
The new enterprise-focused blockchain service IBM is announcing this week is based on the Linux Foundation’s Hyperledger Fabric version 1.0. IBM said it will enable developers to quickly build and host secure production blockchain networks on the IBM Cloud, underpinned by the company’s LinuxONE secure Linux server. Hyperledger is a Linux Foundation-led open source collaborative effort by a group of large technology, financial and services business to build cross-industry blockchain technologies. IBM has a seat on the steering committee and has been a major contributor to the project.
The group is addressing shortcomings of the blockchain protocol in such areas as security and scalability. IBM said its commercial service will provide protection from insider attacks, compliance with the highest levels of regulation in industries such as government, financial services and healthcare, secure service containers and tamper-responsive hardware security modules.
IBM is focused in particular on creating management and governance tools for things like network naming, member management and group decision-making because “blockchain is a team sport,” Cuomo said.
IBM will also announce that it’s working with Beijing-based Energy-Blockchain Labs Ltd. on a ledger-based green assets trading platform and with SecureKey Technologies Inc. on a digital identity network. The network is intended to make it easier for consumers to prove they are whom they say they are.
(* Disclosure: SiliconANGLE Media’s video studio theCUBE is a media partner at InterConnect. Neither IBM nor other conference sponsors has editorial influence on content on theCUBE or SiliconANGLE.)