Blockchain success starts here

Now in its 3rd edition, IBM’s Blockchain for Dummies has introduced blockchain to more than 68,000 readers.

What’s inside:

  • Grasping blockchain fundamentals
  • How blockchain works
  • Blockchain in action: use cases
  • Hyperledger, hosted by the Linux Foundation
  • Ten steps to your first blockchain application

What is blockchain and why is it important?

Blockchain fundamentals

Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, a car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.

The need for blockchain

You can gain a deeper understanding of blockchain by exploring the context in which it was developed: the need for an efficient, cost-effective, reliable, and secure system for conducting and recording financial transactions.

The shortcomings of current transaction systems

Throughout history, instruments of trust, such as minted coins, paper money, letters of credit, and banking systems, have emerged to facilitate the exchange of value and protect buyers and sellers. Important innovations (for example, telephone lines, credit card systems, the Internet, and mobile technologies) have improved the convenience, speed, and efficiency of transactions while shrinking — and sometimes virtually eliminating — the distance between buyers and sellers. 

In spite of this, many business transactions remain inefficient, expensive, and vulnerable, suffering from the following limitations:

  • Cash is useful only in local transactions and in relatively small amounts.
  • The time between transaction and settlement can be long.
  • Duplication of effort and the need for third-party validation and/or the presence of intermediaries add to inefficiencies.
  • Fraud, cyberattacks, and even simple mistakes add to the cost and complexity of doing business, exposing all participants in the network to risk if a central system — such as a bank — is compromised.
  • Credit card organizations are walled gardens with a high price of entry. Merchants must pay the high costs of onboarding, which often involves considerable paperwork and a time-consuming vetting process.
  • Half of the world’s people don’t have access to bank accounts, requiring them to develop parallel payment systems to conduct transactions.
  • Limited transparency and inconsistent information hinder the efficient movement of goods in the shipping industry.

Transaction volumes worldwide are growing exponentially and will surely magnify the complexities, vulnerabilities, inefficiencies, and costs of current transaction systems. The growth of ecommerce, online banking, and in-app purchases, coupled with the increasing mobility of people around the world, have fueled the growth of transaction volumes. And transaction volumes have exploded with the rise of Internet of Things (IoT) — autonomous objects, such as refrigerators that buy groceries when supplies are running low and cars that deliver themselves to your door, stopping for fuel along the way.

To address these challenges and others, the world needs faster payment networks that provide mechanisms to establish trust, require no specialized equipment, have no chargebacks or monthly fees, and offer a collective bookkeeping solution for ensuring transparency and trust.

IBM Think 2020: See how blockchain is transforming business‎

See select sessions from Think 2020 to learn how our clients are using blockchain for new ways of working, managing risk, controlling costs, and maintaining customer satisfaction. Available on demand.

Key elements of a blockchain

Distributed ledger technology

All network participants have access to the distributed ledger and its immutable record of transactions. With this shared ledger, transactions are recorded only once, eliminating the duplication of effort that’s typical of traditional business networks.

Records are immutable

No participant can change or tamper with a transaction after it’s been recorded to the shared ledger. If a transaction record includes an error, a new transaction must be added to reverse the error, and both transactions are then visible.

Smart contracts

To speed transactions, a set of rules – called a smart contract – is stored on the blockchain and executed automatically. A smart contract can define conditions for corporate bond transfers, include terms for travel insurance to be paid and much more.

Blockchain 101 in five minutes

Understanding the basics of blockchain technology can be challenging. But our friends at IBM Food Trust™ – the blockchain network that’s building a safer, smarter food supply – make it easier with these short videos.

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What is Blockchain?

Step inside the basics of blockchain technology: how blocks contain data representing anything of value, how they’re chronologically connected in an immutable chain, and the differences between blockchain and cryptocurrencies like Bitcoin.

Blockchain Expanded

Learn how the decentralized nature of blockchain sets it apart from traditional record-keeping, the value of a permissioned blockchain for business transactions, and how blockchain promotes new levels of trust and transparency.

A Traceable Supply Chain

The food industry is just one of many being transformed through blockchain technology. Learn how it can trace when, where and how food has been grown, picked, shipped and processed – all while protecting network-participant data.

Blockchain Builds Trust

Blockchain creates trust because it represents a shared record of the truth. Data that everyone can believe in will help power other new technologies that dramatically increase efficiency, transparency and confidence.

Types of blockchain networks

There are several ways to build a blockchain network. They can be public, private, permissioned, or built by a consortium.

Public blockchain networks

A public blockchain is one that anyone can join and participate in, such as Bitcoin. Drawbacks might include substantial computational power required, little or no privacy for transactions, and weak security. These are important considerations for enterprise use cases of blockchain.

Private blockchain networks

A private blockchain network, similar to a public blockchain network, is a decentralized peer-to-peer network, with the significant difference that one organization governs the network. That organization controls who is allowed to participate in the network, execute a consensus protocol and maintain the shared ledger. Depending on the use case, this can significantly boost trust and confidence between participants. A private blockchain can be run behind a corporate firewall and even be hosted on-premises.

Permissioned blockchain networks

Businesses who set up a private blockchain, will generally set up a permissioned blockchain network. It is important to note that public blockchain networks can also be a permissioned. This places restrictions on who is allowed to participate in the network, and only in certain transactions. Participants need to obtain an invitation or permission to join.

Consortium blockchains

Multiple organizations can share the responsibilities of maintaining a blockchain. These pre-selected organizations determine who may submit transactions or access the data. A consortium blockchain is ideal for business when all participants need to be permissioned and have a shared responsibility for the blockchain.

See how these industries are using blockchain

Food: Tracing fresh seafood from the moment it’s caught

IBM Food Trust is helping Raw Seafoods increase trust across the food supply chain by tracing every catch right from the water — all the way to supermarkets and restaurants.

Financial services: Improving cryptocurrency security

INBLOCK issues Metacoin cryptocurrency, which is based on Hyperledger fabric, to help make digital asset transactions faster, more convenient and safer.

Healthcare: Transform outcomes with blockchain

The IBM Blockchain Platform can change the way your ecosystem ensures trust, data provenance and efficiency to improve patient care and profitability.

Supply chain: Fresh thinking in blockchain, AI and IoT

Learn how Golden State Foods is using the immutability of blockchain to trace goods through their supply chain and help ensure food quality.

IBM Blockchain offerings to help make your network a success

Build on a platform designed for today’s multicloud world

Technical innovators turn to the IBM Blockchain Platform, the leading Hyperledger Fabric platform, to build, operate, govern and grow blockchain solutions across any computing environment through Red Hat® OpenShift®.

Be part of the new era of trust in the food industry

IBM Food Trust helps growers, distributors and retailers build trust and make our food safer, by enhancing visibility and accountability in every step of the food supply. Customize with a suite of solutions that can help contribute directly to your bottom line.

Co-create with guidance from our experts

As the top-ranked blockchain services provider, IBM Blockchain Services has the expertise to help you build powerful solutions, based on the best technology. More than 1,600 blockchain experts use insights from 100+ live networks to help you build and grow.

Join an existing network for a fast start

Embracing an IBM Blockchain solution is the fastest way to blockchain success. IBM has convened networks that make onboarding easy as you join others in transforming the food supply, supply chains, trade finance, financial services, insurance, and media and advertising.

Learn more with IBM Blockchain Pulse

Podcasts

Grab your earbuds and fill your head with knowledge from blockchain innovators. Hear how blockchain is helping individuals take back control of identity, fight global poverty and pollution, and much more.

Webinars

Blockchain becomes much easier to understand when you learn about it from the experts. This is mandatory viewing for anyone who wants to understand how blockchain is changing the way the world works.

Blog

There’s no shortage of blockchain content online. But for more than 1 million readers, the IBM Blockchain Pulse Blog is one of the most trusted sources for blockchain thought leadership and insights.

Go even deeper with IBM insights

The IBM Institute for Business Value produces some of the world’s most-read blockchain thought leadership reports. Continue your blockchain education with their latest perspectives.

Blockchain FAQ

What’s the difference between blockchain and bitcoin?

Bitcoin is an unregulated, digital currency. Bitcoin uses blockchain technology as its transaction ledger.

This video illustrates the distinction between the two.

How are the IBM Blockchain Platform and Hyperledger related?

The IBM Blockchain Platform is powered by Hyperledger technology.

This blockchain solution can help turn any developer into a blockchain developer.

Visit the Hyperledger web site for details.

What are smart contracts?

Smart contracts are an integral part of blockchain technology. They automatically execute transactions and record information onto the ledger without human intervention.

Conditions of smart contracts are mutually agreed on by network members. They’re a key component for establishing trust and efficiency between parties.

Smart contracts eliminate essentially all the paperwork, streamlining the entire process and saving time and money.

To help you learn more about smart contracts, Nigel Gopie, PhD, the IBM Food Trust Global Marketing Leader - IBM Blockchain, has written a blog post that explains smart contracts in more detail.

How can blockchain impact an entire industry?

Blockchain enables businesses to rethink the way they work.

In the diamond industry, for example, each party can access:

  • High-resolution photos
  • Immutable payment records
  • Certificates of authenticity and more.

Can I deploy on any cloud I want?

IBM Blockchain Platform software is optimized to deploy on Red Hat® OpenShift®, Red Hat’s state-of-the-art enterprise Kubernetes platform.

This means you have more flexibility when choosing where to deploy your blockchain network components, whether on-premises, in public clouds, or in hybrid cloud architectures.

I need more detailed information. Where is it?

For a more detailed look at how a blockchain network operates and how you can use it, read the Introduction to distributed ledgers.

→ Learn more from the blockchain tutorial on developerWorks.


Explore the capabilities of the IBM Blockchain Platform - the only fully integrated enterprise-ready blockchain platform designed to help you accelerate the development, governance and operation of a multi-institution business network.

→ Register to download the IBM Blockchain Platform white paper.


Get the details on Hyperledger Fabric and discover what’s unique  about it, why it matters to business networks, and how to start using it.

→ Visit the Hyperledger page on developerWorks.


The quick-start guide for developers explains how to build a kick-starter blockchain network and start coding with the IBM Blockchain Platform Starter Plan.

→ View the quick start guide for developers.

What can we solve together?

Discover how clients around the world are using IBM Blockchain to transform business now.