IBM — Blockchain Revolution From the $140 Billion Company

IBM — Blockchain Revolution From the $140 Billion Company


What happens when one of the world’s largest
tech giants starts leveraging the power of blockchain? We are talking about a company
with over 350,000 employees and operations running in 177 different countries. In 2018
alone, this company registered $79.5 billion of revenue. IBM, also known as Big Blue, is
using blockchain as a tool to disrupt business models across multiple industries, from shipping
companies to service providers to banks. We met with IBM blockchain representatives at
Sibos in London, who told us how Big Blue is using blockchain to radically change how
businesses store, share and verify data. What is putting data on the blockchain mean
for businesses? Two things. If it’s in the blockchain, if
it’s on a chain, that means: a) you can have trusted shared access. So think about you
as a supplier. Perhaps if you’re a producer or supplier, there’s a sort of supply chain
there. Right now, you have many steps along a supply chain with a consumer being at the
end of that. Think if you have trusted shared access, you don’t have to make phone calls,
look at emails and check and see where something is in the supply chain. You could all have
access, trusted access by just looking at it. And then when you saw that data and you
had access, you’d know it was right. A supply chain consists of all the processes
for the creation and distribution of goods. Typically, these processes consist of hundreds
of stages happening at different times in different parts of the globe and involving
multiple entities. Thanks to its transparency and immutability, blockchain can keep track
of all data involved in this process, making it easily accessible for all parties involved
in minimizing the costs. Interesting thing about blockchain, as we
said, it goes cross industry, it goes across geographies. You’re gonna see a lot obviously
based on some of what I said as a consumer, you’re gonna see in the financial service.
Financial services is where first it took off. You’ll see it in industrial. Any place
where there’s a lot of people process and paperwork. So that’s probably most industries,
right. So what we’re seeing is more interesting is not which industry but which industries
come together. We think about one of them, the production networks we’re working on now
project with the U.S. FDA. It’s also tied to Merck, it’s also tied to Walmart as a retailer
with IBM, KPMG as an advisory. I just went across multiple industries in one blockchain
network. In ancient times, supply chains were relatively simple
since commerce was only happening on a local level. Today, in the era of global commerce and growing connectivity, supply chains have grown increasingly complex. That linear step has now become very dynamic,
almost three dimensional, because a supplier can also be a buyer. A buyer can then be a
shipper. It all changes. It’s past of what you have instead of this step, step, step.
It’s actually three dimensional and you have this value that’s in a sphere that says, look,
I could be today a buyer of goods. And then tomorrow all the data that I have around those
goods could bring value to the consumer knowing that it is, in fact, the good it’s supposed
to be. I’ve consumed this much of it and here’s how it’s flowing through the supply chain.
So that thought of changing the value of data has now changed how the ecosystem is evolving. One of the main sectors IBM is focusing on
is the food industry. IBM Food Trust is using the blockchain to track food products from
their original source all the way to the consumers, thus ensuring the freshness and safety of
those products. Think about the world’s largest retailer,
even the world’s largest grocer, which is Walmart, when it used to take them seven days
to take a trace and track something that could have a foodborne illness. And of course, food
is guilty until proven innocent. So they are throwing that food away for seven days. They
were able to shrink that time to 2.2 seconds. Two seconds on the blockchain. So think of what that changes where you had
the luxury of seven days. But now it’s only two seconds. So if you can do that across
multiple industries and shrink that timeframe and get information when you need it, think
of what business models that that could open up. The IBM blockchain platform is built on Hyperledger
Fabric and open source blockchain network hosted by the Linux Foundation and designed
to streamline business processes across multiple industries. Hyperledger Fabric is a permission
blockchain, which means all its components and members have precise identities and all
transactions happen via validation checks. This is what makes Hyperledger very different
from traditional blockchains, which are usually focused on anonymity and rely on computing
power to validate blocks. We don’t mind, we don’t spend the extra energy,
but this requites another technology that we put in place. And another way to protect
from non-honest participants. So if you’re not mining and there’s no proof-of-work,
what does that do for the scalability of the network? So the difference between mining scalability
and the consensus algorithm we are using is actually that with consensus algorithms you
can have much better throughput of transaction, so you can insert much more transactions,
and that’s why permission networks are much closer transactional systems than the proof-of-work
networks. On the other hand, the usual amount of participants there is not like in Bitcoin
where you have thousands or tens of thousands. You have a much smaller scale. You know, let’s say up to 100 of participants
and they will all do the transactions. But the work IBM is doing with blockchain goes
beyond supply chain. It expands to identity management, governance, trading and finance.
And, of course, cross-border payments. That’s what blockchain is delivering as a
capability on the forefront. Then we think about all of the extra. Guess what else? Depends
on data. IOT. So the Internet of Things, if you’re trying to make sure that that device
is that device and it’s saying how something’s going to… it’s using data as well. AI also
is using data, automation using data. All of these things are now being empowered by
this new catalyst of capability, which is blockchain.

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6 thoughts on “IBM — Blockchain Revolution From the $140 Billion Company”

  • Am I in an alternate universe here?? Their block chain is not immutable. Not even close. I feel like I’m in bizarro world listening to this video

  • Yes! IBM is always at the forefront. Like when they sold the punch card machines to the Nazi's, so the Nazi's could better track their prisoners — keep up the good work IBM!

  • That's fine, but I'd rather have every politician's bribe tracked through the bitcoin blockchain.
    Also all government spending, including military and secret agencies. It's called accountability. Track it!
    The rest of us, who aren't pushing around millions and billions, should be free to use privacy features, if we want, just to keep government in its place – serving the public.

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