IBM Blockchain Foundation for Developers – The business backdrop by IBM #1

[MUSIC] So let’s get started
with the first section. We observed that businesses
never operate in isolation. They always work together with other
businesses, with governments, with banks, with all types of
organizations within markets. And effectively, wealth is
generated by the flow of goods and services across these business networks. The undermarkets could actually
also be of two different types. We can actually have an open market
such as an auction, or a private market such as some things like a supply
chain financing or bonds exchange. So effectively these business networks
are fundamental to the application of Blockchain, as I’ll kind of describe as we
go through the rest of the presentation. So assets are transferred
across the business network. And we also observed the assets are of
two different types, fundamentally. There are tangible assets
like your house or your car. And there intangible assets like
a piece of digital music, or a financial instrument such as a bond,
or a piece of intellectual property. These would be examples
of intangible assets. And we also observe,
on the right hand side of the screen, that cash is also an asset which has
the interesting property of anonymity. Effectively, I don’t know if I’m given a
five Euro note, where that five Euro note came from and also where it’s going
to go to after I’ve owned it. So, ledgers are the key to effectively
recording the flow of assets in and out of an organization. The ledger´s updated every
time a transaction occurs. And for example, if I´m passing an asset
between myself and another member of the business network, we both update our
ledger when that transaction occurs. Usually, the flow of the asset, the transfer of the asset
is governed by a contract. We also observe that these contracts
can actually be very simple. Like, I give my car to another party or they could also be governed by a slightly
more complicated form of contract. But effectively, as I said,
ledgers are the key to this. They record which assets flow into and
out of an organization. Now we haven’t talked about
Blockchain very much up to now. Let’s actually bring
Blockchain into the picture. Blockchain at the very highest level is
a trusted, distributed ledger which has a shared set of business processes across
all the members of the business network. That’s it. If someone asks you in the elevator,
what is Blockchain? This is what we should actually
effectively be telling them. [MUSIC]

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