When you want to set up a private blockchain, you have many options. You can set up your own servers and deploy software on them, or you can simplify the process with hosted services. The IBM Blockchain Platform provides a convenient way for enterprises to use Blockchain as a Service.

What IBM is doing doesn’t involve cryptocurrency or speculative Bitcoin investments. It’s about using shared-ledger technology so that independent parties can collaborate without depending on personal trust. A business blockchain network is a permissioned network; only authorized parties can use it. The benefits of a blockchain are that no single party controls the data, all entries are authenticated, and no existing record can be altered or deleted.

The IBM Blockchain Platform

IBM’s Enterprise plan isn’t cheap, but it provides a lot. It’s a cloud service that places a high value on availability, scalability, and security. Customers can take advantage of the hardware security module (HSM) and secure container technology.

A starter plan is available; while it’s in beta there’s no charge for it. It includes the same capabilities but is intended only for development and pre-production work. It doesn’t include the HSM or fault-tolerant certificates, uptime isn’t as good, and it may be necessary to migrate data when a new release comes out. There’s no word yet on what the plan will cost once it’s out of beta.

High-end customers can choose Enterprise Plus plans. These are specially negotiated plans to get the highest levels of performance, security, and scalability.

Finally, self-managed plans are planned but not yet available. With this option, you can run the software on your own hardware and connect to other networks using the same blockchain.

Hyperledger

The basis of IBM’s blockchain is called Hyperledger Fabric. The Linux Foundation hosts the open-source project. It’s designed for elasticity and extensibility, so it will continue to work as a blockchain grows. Blockchains with high levels of activity can get very large since nothing is ever deleted.

Hyperledger uses chaincode software to define business logic; this is the equivalent of what’s called “smart contracts” or “DApps” on other blockchain technologies. The chaincode uses the Go and JavaScript programming languages.

Windows, MacOS, and Linux systems can all run Hyperledger. It uses Docker containers, simplifying installation and isolating it from other software on the same machine.

Hyperledger Composer is the software environment for creating a blockchain and writing chaincode for it. It allows control of assets, business rules, users, and roles. It allows setting up a REST API so that applications can access the blockchain using HTTP protocols.

Bitcoin and other cryptocurrencies rely on “mining” to maintain the blockchain. That approach intentionally requires a huge amount of computation to prevent cheating. Permissioned networks such as the IBM Blockchain Platform use consensus algorithms that require verification but not a lot of computation.

Many forms of blockchain don’t have publicly tradeable currencies but use tokens — intended only for internal use — to ration resources. Hyperledger doesn’t use tokens, but some third-party modules add the ability to use them.

The code handling consensus is modular, so different algorithms can be used according to the network’s needs. Since they don’t require mining, IBM’s blockchain networks operate much faster than public blockchains like Bitcoin.

Blockchain Applications

When large numbers of entities need to share data in a reliable way, blockchain approaches come to mind. In this context, “reliable” means that each item of information comes from an authenticated source and can’t be forged, altered, or wiped out. Participants can enter false data, but having a complete record from all participants makes fakery difficult to hide. If a sender claims to have sent 800 units but the recipient says 750 units arrived, there’s a clearly localized problem to resolve. Both ends of the transaction are recorded and time-stamped, so the loss of 50 units happened between those points.

Blockchains scale to a large number of participants, thousands or perhaps even millions. Keeping reliable records on so many parties previously required a central registry, and that meant trusting the registry with power over everyone’s information. With a blockchain, there’s no central authority. Any party can drop out without causing data loss. No one is in a position to fake the records. All the information is in the same place and in a consistent format. IBM is involved in some major blockchain projects.

The Internet of Things is an example of a system with very many participants, though, in this case, they’re machines. The IBM Watson IoT Platform coordinates information from a potentially huge number of devices, even if they’re distributed around the world. In industry, sensors may monitor devices and detect critical issues or routine maintenance requirements. A service company might handle automated calls for maintenance from many sites. Other devices may handle automated transactions between businesses. Blockchain technology brings the information together in a trustworthy way.

IBM has partnered with Maersk to create a shipping platform that tracks products throughout the supply chain. It provides better security than other digital approaches while reducing opportunities for fraud and unidentified errors. It streamlines the processing of approval documents, allowing goods to reach their destination more quickly.

Another supply chain project involving IBM and several partners will use blockchain technology to trace food supply chains. It will let companies better track food items and supplies, with benefits such as helping to locate any sources of contamination. Testing with Walmart is underway.

The FDA and CDC have entered an agreement with IBM Watson to research the use of blockchains in health-related issues. State and local health agencies share public health data. In the event of a disease outbreak, this information could be needed — fast! Putting together data from disparate sources to form a big picture is a difficult job, but it’s one that blockchains are made for. Information has to be transferred securely and reliably.

Things to Come

When the mysterious Satoshi Nakamoto invented Bitcoin, he, she, or they didn’t imagine all the uses blockchain technology would find today. Undoubtedly major areas of use are still waiting to be discovered. IBM is investing heavily in the future of blockchain tech. The benefits of decentralized, trustworthy information sharing will continue to grow rapidly in the coming years.