IBM launches grand blockchain strategy, trying to reconstruct the blockchain system

Rage Comment : This time, IBM has promoted blockchain technology with unprecedented force and combined a series of its products with blockchain, including Z series servers, Watson IoT platform and development workgroup project Bluemix Garage. It is very interesting that IBM announced that their current blockchain technology is different from any existing blockchain technology, and has carefully built a new consensus algorithm. IBM said that this algorithm improves privacy protection and auditability, and commercial customers can create blockchain applications at an unparalleled speed. From this, it can be seen that IBM is seeking to create standards for the blockchain industry and trying to stand at the top of the industry. Considering that IBM itself already has a large customer base, from this point of view, it has a great advantage over many blockchain startups. However, blockchain technology itself has the characteristics of decentralization, and whether IBM has the opportunity to become the center of this decentralized technology may be a very interesting attempt.

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Yesterday, IBM unveiled its comprehensive blockchain strategy, culminating weeks of blockchain technology. For the first time, IT giant IBM has conducted in-depth research on business solutions based on the emerging blockchain technology.

Although IBM has previously led the Linux Hyperledger project and opened its own papers to other technology providers, this announcement can be said to be an all-out attack, marking that IBM has entered the blockchain industry at full speed, and the depth and breadth of its research are unique in the industry.

At the heart of IBM's revealed strategy is a multi-year strategic plan that includes integrating blockchain as a service (BaaS) with the company's existing assets, such as IBM z System, which is the core IT system for the world's top 100 banks; Watson Internet of Things (IoT) platform; and its development workgroup project Bluemix Garage.

With this news, IBM became the second technology giant to launch BaaS services. The other is Microsoft. Microsoft announced its sandbox development plan in October last year, which set off a storm in the blockchain industry.

In the interview, Jerry Cuomo, vice president of IBM Blockchain Technology, elaborated on the special features of the company's market strategy. He believes that IBM's blockchain project services, which allow users to quickly test blockchain networks, complement Microsoft, but emphasized what he believes is the biggest potential difference.

Jerry Cuomo , Vice President of Technology

Cuomo believes that Microsoft is more open on existing blockchain networks, but for IBM's BaaS service, business customers will use the IBM blockchain structure because it is a patent-protected public service carefully crafted by IBM.

Cuomo told CoinDesk:

"What we're doing is choosing a particular structure and a particular view. We're not interested in all institutions. We're looking for structures that can support commercial applications. We have a particular view on what kind of structure is needed."

Cuomo described IBM’s new consensus algorithm, which he said improves privacy and auditability, and will allow business clients to build blockchain applications for a wider range of use cases at unmatched speed.

Initial users of the platform include some well-known corporate institutions such as the London Stock Exchange (LSE), Kouvola Innovations and the Japan Exchange. The operator of the Tokyo Stock Exchange believes that due to the participation of the above large institutions, many corporate users have also resonated.

The DNA of blockchain

Perhaps considering the size of the announcement, Cuomo was eager to explain the terminology surrounding the release, explaining how the IBM Blockchain architecture differs from other established blockchain networks.

Cuomo said the term “fabric” refers to the “DNA of blockchain” and a business network in which transactions can be replicated and user members have access to a shared ledger.

“The ledger has three characteristics. First, it is replicable. When you input data, the data is replicated in all ledgers, that is, all ledgers are synchronized. Second, it has special permissions. You can only browse limited ledgers within the scope of your permissions, and you can only perform business operations on these ledgers.”

The last feature is that with this blockchain structure, users can create transactions that contain logic, such as programmable contracts that can automatically manage an asset under specific conditions within a specific time period.

He added,

“This structure enables distributed ledgers and enables the creation of networks.”

In this release, IBM detailed the technical details. The development of this service can play a major role in the "pluggable structure". Users will experience multiple software models; encrypted identity management tools and smart contracts written in Java and Golang. In addition, through privacy and confidentiality control operations, users can set permissions to clarify who can browse the ledger and who can execute smart contracts.

This feature is very different from current public blockchains, such as Bitcoin and Ethereum, where anyone can join the network and participate in operations. IBM's smart contracts are written in a development language that is more familiar to the public, while Ethereum is written entirely in a new language.

Interacting with Hyperledger

Some features of the BaaS service overlap with those of the Hyperledger project, another collaborative effort that has brought together more than 30 industry stakeholders, including startups, traditional financial institutions and potential end-users of the technology, with the same goal: to create an open source blockchain service.

Cuomo commented that IBM’s consensus algorithm will use the 44,000 lines of code that IBM contributed to the Hyperledger project, but will be different because of the value-added services.

“All we’re using is based on that code, not the value on top of that code,” Cuomo said. “What we’re adding is the capacity of a carefully crafted blockchain network, and a set of samples and a set of services.”

As an example of a testing environment, IBM uploaded a sample blockchain application to its website where developers can test asset transactions.

“One of our sample applications, called the ‘Marbles App,’ allows developers to create and trade marbles. The application helps developers understand the basic features of the blockchain, the definition of an asset, in this case marbles of different sizes and colors, and the ability to trade assets between members,” Cuomo said.

IBM is trying to provide more content on its website. There is an interface that has not yet been opened, which includes a "smart contract researcher" that developers can use to experience smart contracts, and a "car rental" interface that provides everyone with a panoramic view of blockchain-based supply chain applications.

Be open to collaboration

Cuomo described the service as a technology that allows users to collaborate in the cloud, and he said users can use it to communicate with other peers.

Like the Azure service, the technology is still in the beta stage, first open to developers, then scaled up, and finally publicly released as a production version of the blockchain.

Cuomo mentioned that Japan Exchange has such a goal, and Japanese companies are working on proof of concepts (POC) aimed at innovating trading systems for low-liquidity assets. "They are using our testing services for the purpose of grading," he added.

The Japan Exchange plans to publish a report on its initial findings from a study of its work later this year, according to Nikkei, while the London Stock Exchange (LSE) said it was launching several risk management projects and promoting transparency in global markets.

Here, Cuomo acknowledged that there is overlap between the Hyperledger project and IBM’s work, and that the Japan Exchange has also joined the Hyperledger technology research and development. In fact, it was at the request of the Japan Exchange that the regulator joined the project.

Cuomo said:

“Exchanges that join want their regulators to have access to the code, so regulators are also participating in the Hyperledger project. But our working relationship with regulators is a managed service.”

Cuomo went on to say that he believes IBM’s commercial business with the consensus algorithm and Hyperledger project sends a positive signal to regulators that they want their projects to meet the requirements of government agencies around the world.

He added:

“That’s another reason why you want to be in an open environment. Regulators don’t want to endorse all blockchain structures, but we hope that by doing this, maybe they will endorse one or two structures.”

Quickly get to market

Cuomo said the key to IBM's service is that it can leverage existing service systems, such as IBM z Systems, which is IBM's system of mainframe computers and distributed server technology.

On its website, IBM touts its z system as taking blockchain to “a new level” because it can handle “massive amounts of transaction data.”

We read in the “What IBM can do for you” interface on IBM’s blockchain website:

“By interfacing transaction record systems and accessing existing data on System Z, we can speed up valuation time and reduce costs, streamlining the process.”

Cuomo said that through the z System, users can "adapt their own structures" to encrypt transactions as they pass information around the network and seek verification from peers.

He added,

“System z is known for its high-volume cryptographic capabilities, so if you run a blockchain system on System z, it will scale very easily. System z is designed for this kind of workload.”

IBM will soon launch the IBM Blockchain DevOps Service, and Cuomo said clients will be able to create a micro blockchain network in 12 seconds.

Meanwhile, to help potential customers better understand these aspects of its technology, IBM is launching IBM Bluemix Garages in London, New York, Singapore and Tokyo, which are designed to provide individual support to developers looking to design and implement blockchain proofs of concept.

As a result, Cuomo said, IBM will offer clients the opportunity to participate in "90-minute interactive sessions" with subject matter experts who can help them quickly implement their ideas. Telepresence and web conferencing will also be available to clients.

Cuomo believes clients will find value in this, and they will be able to leverage his team’s knowledge to get the technology adopted as quickly as possible.

He concluded,

“We take our design team and … when we leave the garage, we take with us a 30- to 60-day proof of concept.”