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The concept behind blockchain technology borrows from the age-old business practice of using ledgers to record transactions.
In the case of blockchain, the parties have a replicated electronic ledger. Each party can access their authorized data on those replicated ledgers.
Blockchain could lead to sweeping changes in our economy when implemented along with modern technology. It has the potential to streamline the way payments are verified and contracts are validated. Blockchain could affect the process for everything from real estate and car title transfers to financial settlements and corporate debt offerings.
Earlier this month, IBM joined the Hyperledger Project formed by the Linux Foundation to encourage collaboration and create common structures around blockchain. Today, as part of the IBM Blockchain initiative, IBM announced it is contributing code to the project, opening new IBM Blockchain labs and offering new services to advance the technology.
As part of the announcement, IBM is offering IBM Blockchain code on IBM z Systems that will allow developers to create blockchain solutions with unprecedented speed, scale and security.
IBM z Systems and blockchain
IBM z Systems is poised to play a significant role in blockchain development because of its unique capabilities and position in the IT world. IBM z Systems is the system of record for major organizations around the globe, handling the most sensitive data and most critical transactions. Blockchain is a natural extension of IBM z Systems’ role and can utilize data and transactions already on the platform.
IBM z Systems has the potential to take blockchain performance to new levels with the world’s fastest commercial processor, a highly scalable I/O system to handle massive numbers of transactions, ample memory for blockchain operations and an optimized network between z virtual systems in a z box cloud that can speed up blockchain peer communications
Blockchain also can take advantage of IBM z Systems’ security capabilities. IBM z Systems has hardware accelerators which can speed encryption and hashing and tamper-proof security cards for key management. Isolated partitions can also be created in memory to keep ledgers separate and secure.
IBM Research is already exploring the ways IBM z Systems’ capabilities can provide new sophisticated enterprise solutions for blockchain. Smart contracts, in particular, are an area of focus with great promise. These contracts require that a series of actions are completed and agreed upon before a final transaction is validated. APIs can be used to securely access data and transactions on z, building on mission-critical applications already in place.
Blockchain and real-world challenges
Let’s take a look at how these smart contracts could solve a real-world challenge–simplifying the importation of parts in a global supply chain. The traditional process can involve more than 10 parties, 30 documents and weeks to verify. In addition to the companies buying and selling the goods, port authorities, customs, banks and transportation companies are involved.
A smart contract using blockchain can be used to verify each step of the process, allowing the transaction to be completed and payment sent as soon as the final step is completed. Using IBM z Systems for blockchain can speed each step, keep the data secure and leverage processes already in place at the parties involved by connecting them to the blockchain through APIs.
This is just one example of how blockchain and IBM z Systems can streamline the transaction process. The technology could be used for complex corporate finance deals, real estate transactions or tracking medical records–anywhere that transactions need to be validated with scale, speed and the highest levels of security.
If you’re not already exploring blockchain, you should be looking at how it could apply to your organization and finding out how you can use your existing IT infrastructure to support new blockchain initiatives. We’ve just begun to scratch the surface of what this new technology can do, but the potential is immense.
Update: Please visit this link on github for open-source code related to this post: “Building Open Ledger”
You can find out more about the IBM Blockchain initiative in this IBM announcement.