IBM must have laid off its lawyers or something since never before has the company seemed so ready to reveal clients by name and the projects they’re engaged in. That has been going on for months and recently it has accelerated. Credit IBM’s eagerness to get blockchain established fast and show progress with the open community HyperLedger Project.
Since early in 2016 IBM announced almost 20 companies and projects involving blockchain. A bunch are financial services as you would expect. A couple of government entities are included. And then, there is Walmart, a household name if ever there was one. Walmart is turning to blockchain to manage its supply chain, particularly in regard to food safety and food provenance (tracking where the food came from and its path from source to shelf to the customer).
Here’s how it works: With blockchain, food products can be digitally tracked from an ecosystem of suppliers to store shelves and ultimately to consumers. When applied to the food supply chain, digital product information such as farm origination details, batch numbers, factory and processing data, expiration dates, storage temperatures and shipping detail are digitally connected to food items and the information is entered into the blockchain along every step of the process. Each piece of information provides critical data points that could potentially reveal food safety issues with the product. The information captured and if there is a problem it becomes easy to track down where the process went wrong.
Furthermore, the record created by the blockchain can also help retailers better manage the shelf-life of products in individual stores, and further strengthen safeguards related to food authenticity. In short, Walmart gains better visibility into the supply chain, logistics and food safety as they create a new model for food traceability, supply chain transparency, and auditability using IBM Blockchain based on the open source Linux Foundation Hyperledger Project fabric.
Walmart adds: “As advocates of promoting greater transparency in the food system for our customers, we look forward to working with IBM and Tsinghua University to explore how this technology might be used as a more effective food traceability solution,” said Frank Yiannas, Vice President, Food Safety, Walmart. If successful, it might get rolled out to North America and the rest of the world.
IBM is not expecting blockchain to emerge full blown overnight. As it noted in its announcement. blockchain has the potential to transform the way industries conduct business transactions. This will require a complete ecosystem of industry players working together, allowing businesses to benefit from the network effect of blockchain. To that end IBM introduced a blockchain ecosystem to help accelerate the creation of blockchain networks.
And Walmart isn’t the only early adopter of the HyperLedger and blockchain. The financial services industry is a primary target. For example, the Bank of Tokyo-Mitsubishi UFJ (BTMU) and IBM agreed to examine the design, management and execution of contracts among business partners using blockchain. This is one of the first projects built on the Hyperledger Project fabric, an open-source blockchain platform, to use blockchain for real-life contract management on the IBM Cloud. IBM and BTMU have built a prototype of smart contracts on a blockchain to improve the efficiency and accountability of service level agreements in multi-party business interactions.
Another financial services player, the CLS Group (CLS), a provider of risk management and operational services for the global foreign exchange (FX) market, announced its intent to release a payment netting service, CLS Netting will use blockchain for buy-side and sell-side institutions’ FX trades that are settled outside the CLS settlement service. The system will have a Hyperledger-based platform, which delivers a standardized suite of post-trade and risk mitigation services for the entire FX market.
To make blockchain easy and secure, IBM has set up a LinuxONE z System as a cloud service for organizations requiring a secure environment for blockchain networks. IBM is targeting this service to organizations in regulated industries. The service will allow companies to test and run blockchain projects that handle private data. The secure blockchain cloud environment is designed for organizations that need to prove blockchain is safe for themselves and for their trading partners, whether customers or other parties.
As blockchain gains traction and organizations begin to evaluate cloud-based production environments for their first blockchain projects, they are exploring ways to maximize the security and compliance of the technology for business-critical applications. Security is critical not just within the blockchain itself but with all the technology touching the blockchain ledger.
With advanced features that help protect data and ensure the integrity of the overall network, LinuxONE is designed to meet the stringent security requirements of the financial, health care, and government sectors while helping foster compliance. As blockchain ramps up it potentially can drive massive numbers of transactions to the z. Maybe even triggering another discount as with mobile transactions.
DancingDinosaur is Alan Radding, a veteran information technology analyst, writer, and ghost-writer. Please follow DancingDinosaur on Twitter, @mainframeblog. See more of his IT writing attechnologywriter.com and here.