Chapter 11
Getting Busy with IBM
IN THIS CHAPTER
Preparing for artificial intelligence blockchain apps
Building your IBM Fabric
Creating smart contracts
Deploying an Internet of Things solution
In this chapter, I introduce you to IBM’s blockchain initiatives, which IBM is merging with its other groundbreaking technologies, such as Bluemix, a full Platform as a Service (PaaS) for application building, and Watson, its super computer.
Blockchain technology creates a near-frictionless value exchange. Artificial intelligence accelerates the analysis of massive amounts of data. The merging of the two capabilities will be a paradigm shift that affects the way we do business and secure our connected electronic devices.
If you’re involved in the Internet of Things (IoT), health care, warehousing, transportation, or logistics industries, you will benefit from the information in this chapter. Also, if you’re an entrepreneur and would like to learn about the new capabilities that come with the integration of artificial intelligence (AI) and blockchain on a scalable app platform, this chapter is for you.
IBM Blockchain Platform
The IBM Blockchain Platform is a cloud-based platform for building, running, and managing blockchain networks. It’s designed to make it easier for organizations to adopt and use blockchain technology in their operations.
The IBM Blockchain Platform provides a range of tools and services for developing and deploying decentralized applications (dApps) on top of a blockchain network. It supports a variety of popular blockchain technologies, including Hyperledger Fabric, Ethereum, and Corda, and it can be used to build networks with different levels of complexity and scalability.
The platform also includes features such as automatic smart contract generation, real-time analytics, and network management tools, which can help organizations to more easily design, deploy, and maintain their blockchain applications. In addition, the IBM Blockchain Platform offers a range of security and compliance features to help protect against threats such as hacking, fraud, and data breaches.
Overall, the IBM Blockchain Platform is intended to provide organizations with a comprehensive, easy-to-use platform for building and running blockchain networks, with the goal of helping them to more effectively leverage the benefits of blockchain technology in their operations.
Supply chain
IBM has a Blockchain Solution for supply chain transparency. They understand that moving freight is a complex process involving different parties with different priorities. Modern supply chains are monitored through a network of IoT devices that scan products as they move from production to shipping and finally make it into the hands of the end user. IoT-enabled blockchain can store the temperatures, position, arrival times, and status of shipping containers as they move. Immutable blockchain transactions help ensure that all parties can trust the data and take action to move products quickly and efficiently. You can enable supply-chain transparency by leveraging an enterprise blockchain platform to transact with your supply-chain partners in a more trusted and efficient way.
IBM’s blockchain can help you share data with other parties. Sharing data across a blockchain can be good for business because it allows parties to collaborate and share transparently, with a clear record of what happened when. But if you do that publicly on a blockchain, it can be problematic because your competitors can use the data to get a leg up on your company. Sharing data on an enterprise blockchain platform is better because you decide who can see your data. With a supply-chain transparency solution, you can create an immutable, distributed, and shared ledger to transact with your supply-chain partners in a more trusted and efficient way. In a world where speed, accuracy, and compliance are paramount, blockchain provides a solution that can help you meet your goals.
Enterprise blockchain platforms like IBM Blockchain offer unique benefits for supply chain management, including:
- The ability to track goods throughout the supply chain from supplier to customer
- A shared view of the supply chain that all members can trust
- Enhanced visibility into the location and status of goods in transit
- Priority access to shipping container temperatures, positions, and arrival times
- Improved compliance with food safety regulations
- The ability to quickly resolve disputes with improved transparency into all aspects of the shipment
World trade
IBM has also developed a blockchain solution for trade finance. The world is currently in end-state globalization where nearly all countries and cultures are completely interconnected and interdependent. You experience this as having a distributed workforce, where you may be working with teams in China, India, and Europe as a regular part of your day. Your company may be completely reliant on the work done in another country. For example, 90 percent of the world’s advanced semiconductors are made in Taiwan. Without the work of people in Taiwan, the world would no longer be able to produce cheap electronics. The COVID-19 pandemic revealed one of the other characteristics of total globalization: the free movement of people across borders.
IBM is leaning into how the world is increasingly reliant on cross-border trade. Having a solution that fosters greater trust and transparency is more important than ever. That’s where IBM Blockchain’s experience in strategy, rapid product development, governance and regulation helps blockchain networks expand membership — an essential part of building a successful network. IBM Blockchain also offers a new class of transparent, risk-mitigated, and standardized trade finance and trade credit insurance solutions that can help you find new opportunities and markets while lowering risk and operational costs.
With IBM Blockchain, businesses can enjoy greater trust and transparency in cross-border trading. That’s because blockchain creates a shared, immutable record of all transactions within a network. This means that every member of the network can see every transaction that has taken place — which helps to foster transparency and trust. In addition, blockchain enables businesses to verify the authenticity of documents quickly and easily — such as bills of lading, contracts, and invoices — which can help to reduce fraud and save time and money.
Another way that IBM Blockchain is helping to establish leadership in the new era of trade is by helping to create new trading hubs around the world. By convening new trade networks and bringing together buyers and sellers from different geographies, IBM Blockchain is helping to create new opportunities for cross-border trade. In addition, by lowering the barriers to entry for small businesses, IBM Blockchain is opening up new markets and creating more inclusive global supply chains.
Finally, with its transparent, risk-mitigated and standardized solutions for trade finance and credit insurance, IBM Blockchain is helping businesses find new opportunities while lowering risk and operational costs. For instance, companies can save time and money by automating the entire credit application process on the blockchain while reducing the risk of fraud. In addition, by using blockchain to track transactions from start to finish, companies can gain insights into client financial positions and transaction histories — which can help to lower risk or optimize financing terms.
In today’s interconnected world, cross-border trade is more important than ever. But with this increased reliance on cross-border trade comes increased pressure on businesses to foster greater trust and transparency. So, as you’re considering a solution to meet your needs in trade finance, you should look at what IBM can do for you.
Health care
IBM’s blockchain technology has been used in the health care and life sciences industries to address various challenges, including the lack of interoperability between different systems, concerns about data privacy, and the need for better traceability in supply chains. These issues have become even more pressing with the COVID-19 pandemic, as health-care organizations have had to adapt their supply chains to meet the demand for protective equipment and have worked to develop treatments, tests, and vaccines. IBM’s blockchain technology has been used to help address these challenges by providing a secure, decentralized platform for storing and sharing data. It has also been used to facilitate communication between different electronic health record systems and to help combat drug counterfeiting.
The growing healthcare market using blockchain technology is expected to be worth $126 billion by 2030. There are many ways that it can be used in health care, such as helping to prevent drug counterfeiting, making it easier to share and manage medical information, and tracking shipments of medical supplies. It has also been used during the COVID-19 pandemic to help with things like contact tracing and sharing research data. IBM has four primary ways they are supporting healthcare tech using blockchain:
- IBM is helping to secure personal protective equipment (PPE) supply chains by tracking the provenance and authenticity of PPE products.
- IBM is working on a project to allow patients to control access to their health data.
- IBM is collaborating with pharmaceutical companies and distributors to address counterfeit drugs.
- IBM is helping to streamline the clinical trial process by validating participant identity and ensuring regulatory compliance.
Blockchain is particularly well-suited for addressing health-care and life-sciences challenges because it’s secure, tamper-proof, decentralized, and transparent. It can help to ensure the authenticity of PPE products, track the provenance of drugs, protect patient privacy, and streamline clinical trials.
The pandemic highlighted the many challenges faced by the health-care and life-sciences industries. But it also showed the potential for blockchain technology to help address some of those challenges. IBM Blockchain is just one example of how this technology can be used to secure supply chains, protect patient privacy, streamline clinical trials, and more. As we continue to grapple with the pandemic, it’s important that we explore all the ways that blockchain can help us overcome these challenges.
IBM Blockchain has the potential to transform the healthcare and life sciences industries by solving some of their most pressing challenges. Blockchain technology can create a decentralized database of patient health information, a traceable medication supply chain, and digital credentials for healthcare professionals. This would improve interoperability, privacy, and supply-chain traceability while also ensuring that patients receive safe and effective medicines.
Business Blockchain on Bluemix
IBM is now offering blockchain technology that integrates with its traditional offerings, such as IBM Bluemix. Bluemix is an open-standards, cloud-based PaaS for building and managing applications. IBM has integrated a blockchain stack from Hyperledger, which is part of the Lynx foundation and is establishing best practices in blockchain technology.
You’ll want to prepare for rapid and fundamental changes within IBM’s blockchain initiatives. The technology is very new and still under incubation, both within IBM and Hyperledger.
Hyperledger has several different subprojects in development. As of this writing, IBM is using Fabric, but it may open up Bluemix to other projects. Fabric is open source and under active development within Hyperledger. You can start testing Fabric on Bluemix by using Hyperledger Fabric v0.6. However, IBM warns against running any valuable transactions directly on Fabric v0.6 or any earlier version.
Bluemix is the newest cloud offering from IBM. It’s an implementation of IBM’s open cloud architecture based on Cloud Foundry, an open-source PaaS.
Bluemix enables you to rapidly and easily come up with applications, deploy them, and manage them. Bluemix offers enterprise-level services that can integrate with applications without needing to know how to install or to configure them.
Figure 11-1 shows how IBM relates different aspects of blockchain and IBM systems. You can find out more at https://goo.gl/12Q6no.
FIGURE 11-1: How IBM Bluemix and IoT are merged with IBM Watson.
IBM Bluemix provides four core things:
- Computing infrastructure based on your apps’ architectural needs
- The ability to deploy apps to a Bluemix public or dedicated cloud
- Dev tooling, such as code editors and managers
- Access to third-party open-source tools in their service section
Bluemix gives you everything you need to build your app. It’s now offering blockchain infrastructure to test as well.
They have a service for integrating your applications with the Bluemix blockchain. As of this writing, there are two pricing models. A free account gets you what you need to test your idea. You get four peers and a cert authority to sign transactions, as well as a dashboard with logs, controls, and APIs.
The enterprise plan is priced at $10,000 a month and offers higher security and speed than the free model.
Two remarkable entrepreneurial pioneers are using Bluemix and the Hyperledger Fabric integration:
- Wanxiang: The largest China-based automotive components company, Wanxiang is working with IBM to deploy a private blockchain. They’re embedding property rights into things like electric cars. The goal is to reduce the costs to consumers for leasing equipment. Wanxiang will use its blockchain technology to track the lifespan of the components and refurbish used batteries. Bluemix will take care of everything else.
- KYCK!: The financial technology (fintech) startup KYCK! is utilizing IBM’s blockchain integration as a novel way to address Know Your Customer (KYC) needs for brokerages. This expense is limiting and costly for banks and other financial services. KYC is done to prevent money laundering and illicit trade, and to combat terrorism. KYCK! is building a video conference and encrypted document submissions platform. It will allow brokers to work with and authenticate clients the company has not met in person.
IBM has also built out three simple Chaincode applications that let you play with the IBM Blockchain network:
- Marbles: Marbles is an application that demonstrates transferring marbles between two users. It lets you see how you can move assets on a blockchain.
- Commercial Paper: Commercial Paper is a blockchain trading network implemented on IBM Blockchain. You can create new commercial papers to trade, buy and sell existing trades, and audit the network.
- Car Lease: Car Lease is a lot like the Marbles demo. It’s designed to allow you to interact with assets. You can create, update, and transfer. It also allows a third party to view the history.
Watson’s Smart Blockchain
IBM’s supercomputer, Watson, is also available on the Bluemix platform. Watson is a cognitive computing artificially intelligent computer system. It can analyze structured and, more impressively, unstructured data at incredible speed.
This technology is still developing, and customers have complained about its true ability to understand unstructured written language.
Watson can answer questions posed to it through natural language and learn as it absorbs more information. The implication of this technology, when married with blockchain technology, is astounding. One of the first implementations is within the IoT space. There is a strong need to secure data that is emitted from these devices and then make it actionable and intelligent.
Watson’s cognitive computing is simulating human thought processes and using the MQTT protocol. Like a human mind, it grows over time. Its self-learning systems use data mining, pattern recognition, and natural language processing to mimic the way your brain works. Watson processes at a rate of 80 teraflops per second (one teraflop is a trillion floating-point operations). To put this into context, that replicates — and in some cases surpasses — a high-functioning human’s ability to answer questions. Watson is able to do this by accessing 90 servers with a combined data store of more than 200 million pages of information, which it processes against six million logic rules. Watson is about the size of ten refrigerators, but it’s been getting smaller and faster.
Figure 11-2 shows how IBM Watson relates different aspects of blockchain and IBM systems. Dive deeper at IBM https://goo.gl/12Q6no.
IBM is applying these amazing capabilities to IoT data feeds that utilize Chaincode implementation. Chaincode is a Hyperledger smart contract system. Here’s how Watson-enabled blockchain for IoT devices will work:
- IoT devices send data to your private blockchain ledgers for inclusion in shared transactions as a tamper-resistant record marked in time.
- Partners and third-party service providers can access and supply IoT data as well, without the need for central control and management.
- All parties can sign and verify data, limiting disputes and ensuring each partner is held accountable for their individual performances.
FIGURE 11-2: How Bluemix integrates clients, peers, and IBM Watson.
This is a simple implementation that does not take advantage of all the functionality and capabilities of Watson. Watson’s ability to learn and make suggestions, and update out-of-date information will truly make it a powerful blockchain-enabled application in the future.
You can integrate Watson’s IoT Platform with Fabric from Hyperledger. This integration allows you to execute Chaincode contracts through cognitive computing oracles. Watson’s IoT platform has built-in capability that lets you add selected IoT data to your own private blockchain to create an oracle. This helps you protect the data from being viewed by unauthorized third parties.
When you’ve established a Bluemix workspace, you can add selective services, including the IoT Platform that integrates several technologies. Fabric is the blockchain technology that provides the private blockchain infrastructure for distributed peers that replicates the device data and validates the transaction through secure contracts.
Watson IoT Platform translates existing device data, from one or more device types, into the format needed by the smart contract APIs. Watson’s IoT Platform filters out irrelevant device data and only sends the required data to the contract. Figure 11-3 shows how IBM Watson integrates with IoT devices and APIs. Watson acts as the Chaincode oracle and allows you to control what information is known to the parties involved in the contract. This functionality is important for privacy.
FIGURE 11-3: The Watson/API/device flow.
Building Your Starter Network on Big Blue
IBM’s blockchain technology and IoT Platform offer new promising tools and can be leveraged to address many problems facing companies that are trying to scale:
- Security: The huge volume of data that’s collected from millions of devices raises information privacy concerns. Also, hacked IoT devices have been used by nefarious organizations to cripple websites with distributed denial of service attacks.
- Cost: The high volume of messages, data generated by the devices, and analytical processes are going up as more devices come online and utilize that data.
- Architecture: Centralized cloud platforms remain a bottleneck in end-to-end IoT solutions and a central point of attack.
IBM’s open-standards-based distributed IoT networks can solve many of the problems associated with today’s centralized, cloud-based IoT solutions. Connected devices communicate directly with distributed ledgers. Data from those devices is then used by third parties to execute smart contracts, reducing the need for human monitoring.
The IBM Watson IoT Platform with a Fabric integration replicates data across a private blockchain network and eliminates the need to have all IoT data collected and stored centrally. Decentralized blockchain networks also improve the security of IoT devices. Unique digital identities are built for each device over time. This new way of creating and securing identity is exceptionally hard to spoof.
These new blockchain identities allow IoT devices to sign transactions that allow smart contracts to execute. A practical application of this would be an insurance product that was fed data from a smart car on the driving behavior of different individuals. The car would send data to be published in Fabric; the insurance product built with Chaincode would then recognize the new data and the identity of your car and update your policy.
The possibilities are nearly endless, and IoT has introduced huge opportunities for businesses and consumers, especially in the areas of healthcare, warehousing, transportation, and logistics.
There are three main tiers of IBM cloud-supported IoT solutions that meet the needs of different IoT business problems:
- Device Gateway: Device Gateway is for smart devices or sensors that collect data about the physical world. This could be things like weather sensors, temperature monitoring for refrigerated containers, or vital statistics data for a patient. These IoT devices send their data through the Internet for analysis and processing.
- IBM Watson IoT Platform: IBM combines its supercomputer with its IoT Platform to collect data from IoT devices and then analyze the data and take subsequent actions to solve problems. Watson provides machine learning, machine reasoning, natural language processing, and image analysis that enhance the ability to process the unstructured data collected from the sensors.
- IBM Bluemix: Bluemix is an open-standards-based cloud platform for building, running, and managing applications and services. It supports IoT applications by making it easy to include analytical and cognitive capabilities in those applications.
You can learn more about the IBM solution at https://developer.ibm.com/technologies/blockchain.