Blockchain to empower people — IBM

So, my name is Olga Kravchenko and I’m senior blockchain consultant in IBM Norway, and I’m part of the European blockchain team, focusing on strategy and business value design on blockchain. Winston Yong, chief architect for blockchain services in Europe. And my job as a chief architect is to make sure the projects that we implement on emerging technologies are fit for purpose when it goes into business production. Perfect. So, let’s go through questions. And the first question, as I said: blockchain, not Bitcoin, or Bitcoin, not blockchain? Your thoughts? It’s better for him to start. So, Bitcoin is only one implementation of blockchain. Where IBM has decided to focus on is to make sure that the other characteristics of Blockchain, such as traceability, provenance is going to be useful to help society, and that is more important for IBM. Hence, we have focused a lot on permissioned ledgers, where we are able to create supply chain efficiencies. Right. In other words, we see blockchain as the two ways, the open and the closed ones, and within the open the application would be a Bitcoin. Within the closed blockchains, you can name a lot of the technologies that are good to have, like, a Hyperledger Fabric that would host a lot of their applications on top. And if we only focus on things like cryptocurrency, then we are also using a lot of energy, generating all the energy to do the mining, to do the algorithmic calculation. Such energy, in the IBM’s view, could be better harnessed to be good for the planet. Is it correct to call permissioned networks or permissioned ledgers a blockchain? Is it correct from technical side? Yes, I believe so. Okay, so you don’t believe that real blockchain or blockchain is suitable only for cryptocurrencies? So, there are other obligations? Yes. And if you think back about the time that Satoshi Nakamoto wrote his white paper, right? It describes the way blocks are chained together, and when he released the code for Bitcoin, it was only his first application for it. And where we have now seen these people taking the base technology and applying it for other areas of good, such as asset management, provenance of food and supply chain of machineries, we’ve used it for digital identity and also for economic matching. So we think that there are a lot more good that can come out of it than just cryptocurrency. Finish my thought. Blockchain will empower… The people. – Empower the people. And your version? I mean, you can say whatever: empover the people, empower economies, empower transactions, empower countries. It just depends how you use it, really, at the very end. Because it’s just the technology, as any other technology, as an AI. What you do with it, what is the design, what is the intention – that’s what’s the most important, ’cause you can use it for good or you can use it for profit or you can use it for whatever. It depends how you use it. So, you said I can use it for good. Can I use it for bad? That’s something we will never… we kind of would reserve from answering your question. Okay. So, is it correct to call Sawtooth Supply Chain a blockchain application rather than framework? I think a framework is good from, let’s say, a technical perspective. You can have a framework, like a whole data architecture that caters for the different type of food: food production, food packaging and inside there. But when it comes to the network, we may see multiple networks for different purposes, different use cases inside there. And eventually, these different networks will talk to each other, and it is a concept… in IBM we are exploring a lot on the concept of network, of networks. Is it correct that there was an internal conflict between Intel and IBM for the approvement of this framework, is that correct or… Which framework? – Sawtooth Supply Chain. No, we’re… – We are not aware of that. Okay. So, do you agree that IBM domination on the governing council of Hyperledger is a threat to the independence of the organization? So, there are six out of eleven people in the committee that approves frameworks, these guys are from IBM. And other five are from other organization. And some guys from, I don’t remember the exact entity, said that it’s a problem. – State Street. So, it is first and foremost, IBM is very interested in it. So we’re making these investments to be able to progress it. And where we see people wanting to adopt it and come in and maintain us, we are highly encouraging of them. And it is only when… Sometimes, you know, it’s about the skills and expertise, because we invest in the R&D, sometimes we may put more of our people inside there to help push it forward. And in many cases we are also getting our work, people that we represent not necessarily just to engage at the protocol level, which is Hyperledger, but at the application level. Important is the governance of these networks that are built using Hyperledger. So, we do encourage multiple people also to participate as governance inside the application itself. And you might see some of the new concepts, such as trust anchors, inside there, where we provide a governance for how the networks will operate onboarding and the offboarding of people. Okay. Answering your questions in a way, first of all, I don’t think we’re in a position to answer it. But the way how I understand the Hyperledger Linux Foundation works is that in order for you to be promoted to the governing position, it is done by the majority of votes. You need to be contributing, you need to be contributing with the code, with the checks, with everything. So you grow up to be recognized as the trusted adviser first and foremost, that has enough of the technological know-how and knowledge to be promoted up there to be deciding. So, if the community has decided, I don’t think it’s in a particular matter for a company to say “yes” or “no”. Okay. You mentioned the governance issue. So, why IBM decided to join the governance council for Hedera Hashgraph? And is Hedera Hashgraph a blockchain or it’s something else? Is there any centralization trade-off in Hedera? Do you know something about it? I am not sufficiently expert in that to comment on it. Okay. – Same here. – Same, okay. So, are IBM blockchain services based exclusively on Hyperledger Fabric? No, it isn’t. But of course, we start off with Hyperledger Fabric, because of our expertise and our availability of resources to do it, but we do do work in other type of chain codes as well. Particularly, we respond to clients. Yeah, like Stellar, for example, right? We work with Stellar, we worked with Ethereum, but it’s sort of… we go with what we believe is the best fit for the use case. And then, of course, we have a quite heavy consultancy expertise on Hyperledger Fabric, of course, and the frameworks around that. Okay, imagine that I am enterprise and I would like to use some blockchain services. Why should I choose IBM blockchain services rather than… Corda Enterprise. Is there some sufficient differences between, for example, Tradeline Solutions and Corda Enterprise… There is no such thing as Corda Enterprise at the moment, there is no… Marco Polo, is it the Corda? Marco Polo. – I believe so. – Yeah, Marco Polo, right? It’s not live. They started plus-minus… it’s not live. Let’s put it there. The significant emphasis for IBM is about industrializing and making things production ready. And that is one of the key emphasis that we have in blockchain services, that we help our clients get industrialized, to move away from proof of concepts or just experimentation. When it becomes productionizing things, it is very significant that it relies on other areas, which are non blockchain-specific as well, such as security, penetration testing, latency, of all of these kind of things. Support, to be able to support people as they take on new ways of working with blockchain, these are core expertise of IBM. To be able to provide stability to new platforms that are coming on to play. Do you see Ethereum Enterprise Aliance as a competitor or no? I think that the world of blockchain is growing so fast that there is space for all. Yeah, exactly. And it’s also like… I mean, nobody sees in the future that you’re gonna be sided. The future is interconnected. The future was us and other companies working on the interoperability centers and patterns, and there is a reason for that, because it’s silly to believe that everyone in the world is going to join either us or someone else. So, of course, it’s going to be somehow sided and splitted. So, you need to connect, eventually, and that’s why I think that the question of “why should they choose us vs anothers?” in the general terms is incorrect in the way. You don’t come to just whoever, whatever, and just say: “Hey, give me a blockchain!” So, you come because you have a business idea. So, the business problem, the pain point, the functionality is what drives you. And then, of course, there are certain preferences companies have. It could be simply “who do you have the most business with?”, “what cloud do you use?”, “who do you trust most?”. And that differs from geography to geography and industry to industry. That would drive a lot of the engagements, frankly. – And also from a technical, architecture perspective, when you move blockchain projects away from experimentation into production, the main thing that you have to work with is the system of records, where are the data coming from. And those kind of things, they exist outside of the world of blockchain. The core banking system, the core insurance system, the warehousing system from SAP or sales ordering management system from Oracle. All of these are individual systems of records that you have to integrate and interface into a system for blockchain. And for us, IBM believes that our key differentiator is our ability to integrate conventional technology with emerging technology. Right. And the core skills are… I mean, we have done already, was it five or six platforms that are live? Their skillset in the know-how, the best practice just behind the blockchain in addition to the functional skillset within the functional area that the companies come to us, whether is it straight finance or is it the shipping or is it the food provenance or what is it, where the core application originates. So, it’s a combination of factors that drives the engagement and that makes it successful, really. And it’s wrong to position blockchain as a separated factor. Yeah. I know that Hyperledger consortium has agreement with Ethereum Enterprise Aliance on common standards – for blockchain applications, for blockchain frameworks. Do you plan similar agreement with R3 Corda? I think… out of basis that we are all going to have to share standards, there are constantly, always discussion between all the different players in the market about making things more interoperable, particularly around sharing data standards. So more and more of that discussions will happen. It doesn’t take away the fact that we remain competitive, but above all we need to be interoperable. But that sort of goes back to, once again, we are not in a position to answer that. Well, I definitely don’t have a direct contact with Corda, but… I have another question for you. So is it correct to say that IBM blockchain services are focused more on Europe than any other regions? Is IBM, a blockchain unit, is focused more on… on progress in the Europe than any other regions? No. – I wouldn’t say that it is because IBM put the focus on there. But it has been our privilege to respond to the clients, and we found a client in Europe much more willing to adopt blockchain technology. And so, by default, we see the largest part of business being in Europe, leading our blockchain… – For now. – Yes, for now. But also, I mean… once again, yes, sure thing, but you take IBM Food Trust. Their origins are in the US. You take TradeLens, sure, origins are in Denmark. But it is a global business and the companies that are joining are across the globe, same as with Food Trust. You take, which is the trade finance, it is purely European play, but that in the future will grow global as well. So I think it sort of depends, who had the idea, who had declined, how was it developed further on, and also the appetite. So, sort of, blockchain is a bit of the “how do you regulate and how do you upgrade the business and how do you change the current status quo with the innovation”. And it seems like in the beginning there was a lot of interest in Asia, and now it’s more and more, at least on our side, interest in Europe. And we just follow the client. Alright. If I say that the main blockchain use case for now is supply chains, am I right? If I were to go around and I started to count all the different projects that we see our clients involved in, I would say a large majority of them are to do with supply chain and the provenance of goods or service. Yeah, that’s correct. And then you can also say, like, financial services, a lot, identities, a lot. And sort of how do you coordinate inbetween. But supply chain, that’s probably the most tangible that you can go to. It’s something that everybody understands, something that everybody appeals to, because supply chains are global, and then the need for the trusted source of data and, in a way, put together source of data becomes more and more obvious for the parties. Okay, so, the last question is very simple. Do you have any clues why IBM is called “Big Blue”? There are many reasons and hypotheses for that, and I think one of the main reasons is our corporate color is blue. And… we have been a large company that has gone through a 108 years of existence and a lot of transformation. So I think our work, our corporate colour… Yeah, I was gonna say, because of the blue-chip, as the stock… it has been extremely stable and high-valued growth stock. Lately, when we were going through this transformation, it was slightly… would grow and then drop, but now it’s growing again. So I think the fact of the blue-chip. “Big Blue”. So, that’s all. Thank you very much. – Thank you too!

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