IBM has led efforts to adopt blockchain technology to multiple industries with several newly-revealed initiatives and commitments, CCN reported. The tech giant has so far taken a focused, incremental approach to blockchain starting with “shadowchain,” an application for the tech giant’s global finance division. IBM Global Finance (IGF) sends out 2.9 million invoices and works with 4,000 partners in lending about $44 billion annually. The business manages around 25,000 disputes a year that can tie up $100 million at a given time. The shadowchain can record events in the lending process to avoid unneeded delays caused by disputes. The blockchain has enabled dispute resolution to take 10 days instead of 40.
“You can imagine the capital that will free up; there’s 30 days that that money isn’t being tied up,” he said.
Lending Moves To Blockchain
None of the company’s trading partners have been set up on the blockchain, he said, but the lending process is moving to the blockchain. Any global conglomerate with a similar financing profile could tackle this process, he added. Adapting the blockchain to finance is not a simple matter. IBM looked at different blockchain fabrics, including Ripple, bitcoin and Ethereum, having done a proof of concepts with clients for each of these. The company found gaps in being able to execute these blockchains. Some projects had Lesser General Public Licence (LGPL) licensing, making it nearly impossible to work legally with those technologies.
Blockchain’s Unique Challenges
IBM loves Apache and Linux, Cuomo said; the projects use pluggable architectures enabling a company to superimpose its innovation on top. “And we saw that blockchain technology bases were prohibitive in that matter,” he noted. To address such issues, Cuomo’s team began creating its Open Blockchain eight months ago. He described it as a permissioned blockchain, meaning it was possible to liberally configure permissions to be very open. The Open Blockchain (OBC) supports confidentiality, auditability and privacy.
IBM Team Makes Progress
The team has the ability to plug in consensus algorithms. They have written about three of these inside IBM since open sourcing OBC at the DC Blockchain Summit.To create meaningful transactions in a complete Turing language (or languages), the team deployed a chaincode notion. This theoretically enables users to create smart contracts in a language of choice. IBM supports the Go language and is working on a second implementation as part of the Hyperledger Project, an open-source blockchain working group overseen by the Linux Foundation. IBM offered OBC code to the Hyperledger Project, hoping it will join the best ideas of other code contributors such as Intel, Blockstream and Digital Asset Holdings. IBM hopes to have a single codebase bringing the best of the different ideas, Cuomo said. At that point, the team will deprecate OBC for Hyperledger. JPMorgan, a Hyperledger member, hosted a code-sprint and hackathon recently to collaborate with the code mix thus far contributed to the project. The task of combining the contributed code, overseen by the technical steering committee, is nearing realization but has not yet arrived.
Diverse Team Works Together
Asked for his view on assimilating disparate codes, Cuomo said he is pleasantly surprised how well the team works together. He said there a lot of real coders and observers who come to the table with opinions on code. He said there are three dominant voices already converging.
“We all know what the endgame needs to be, and that there’s going to have to be give and take,” he said. “There’s the IBM OBC thought and chaincode. I think people love the plugability of the platform. But then Blockstream and Digital Asset Holdings really like the UTXO model, the unspent transaction model that comes from Bitcoin. They like it because it’s been out there and it’s kind of a very simple transaction model.”