1. Building on Blockchain
9/16/2018 5:43 PM
BRK2177
Building on Blockchain
JT Rose and Zeyad Rajabi
Azure Blockchain
© Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

2. 9/16/2018 5:43 PM
“…Bitcoin offers a sweeping vista of opportunity to reimagine how the financial system can and should work in the Internet era, and a catalyst to reshape that system in ways that are more powerful for individuals and businesses alike” - Marc Andreessen, A16z
© Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

3. Blockchain is not just about money
9/16/2018 5:43 PM
Blockchain is not just about money
“…a sweeping vista of opportunity to reimagine how the financial system can and should work in the Internet era, and a catalyst to reshape that system in ways that are more powerful for individuals and businesses alike”
- Marc Andreessen, A16z
Why Blockchains Could Transform How the Economy Works
The Technology would turn a company into a seamless network of coordinated freelancers
Blockchain For Supply Chain: Enormous Potential Down The Road
Is Blockchain the Most Important IT Innovation of Our Age?
© 2013 Microsoft Corporation. All rights reserved. Microsoft, Windows, and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

4. Blockchain is a secure, shared, distributed ledger
Block chain allows the fiercest of competitors to participate with each other in these shared database implementations.
Ledger
The database is “write once” so it is an immutable record of every transaction that occurs.
Secure
Uses cryptography to create transactions that are impervious to fraud and establishes a shared truth.
Distributed
There are many replicas of the blockchain database. In fact, the more replicas there are the more authentic it becomes.

5. Data is stored in a ledger
FROM TO
PROPERTY
VALUE
Alex
Katie
Payment
$500
Jim
Sally
$300
Garth
Asset
Car
Tony
$100
Molly
Paula
Message
I love you
Example ledger
Entire network has same ledger

6. Data is shared in a blockchain network
Traditional ledgers are centralized and use 3rd parties and middlemen to approve and record transactions
Blockchain safely distributes ledgers across the entire network and does not require any middleman
Traditional System
Blockchain System
Centralized system with stored ledger
Distributed system with distributed ledger

7. Why does it matter for business?
There is massive opportunity to improve shared business processes:
$280B in banking industry fines since 2009
$21B cost of tax return fraud in the U.S.
48M illnesses from contaminated food
in the U.S. each year

8. Let’s imagine a food contamination scenario

9. Let’s imagine a food contamination scenario

10. Why isn’t everyone using blockchain right now?

11. Blockchain wasn’t built for enterprise
Ledgers
Ledgers designed for public network lack the performance, confidentiality, and governance capabilities needed for commercial use
Smart Contracts
Smart contracts were not designed to leverage existing enterprise tools and skill sets
Integration
There are a number of challenges to integrate a blockchain with existing IT architecture

12. So, how do I build with blockchain?

13. 4 key questions when starting any blockchain project
Does Blockchain apply to my scenario?
What technology should I build on?
How do I translate workflows into smart contracts?
What does it take to build a distributed app and connect it to my existing infrastructure?

14. The first question is… Does Blockchain apply to my scenario?
What technology should I build on?
How do I translate workflows into smart contracts?
What does it take to build a distributed app and connect it to my existing infrastructure?

15. Blockchain technology supports two main goals
EFFICIENCY
TRANSFORMATION

16. When your project meets certain criteria
Answering a few questions can determine if blockchain
is appropriate
Does the process involve low-value, manual verification steps?
Are there any intermediaries that control the single source of the truth?
Do multiple parties manipulate the same data?
Is this a business process that crosses trust boundaries?

17. Applications have similar patterns, across industries
Manufacturing
Retail
Insurance
Banking and Capital Markets
Government
Health
Asset
Transfer
Cross-Organizational Workflow
Asset tracking
Real time auction for supplier contracts
Supply chain transparency
Loyalty tracking
Product provenance
Logistics management
Claims Management
MBS/Property Payments
Fraud detection
Automated underwriting
Bond Issuance
Trade Finance
Loan Syndication
Post Trade Settlement
Cross Border Payments
Derivatives Trading
KYC/AML
Licensing and ID
Benefits distribution
Aid tracking
Military security
Personalized medicine
Records sharing
Compliance
High-Assurance
Audit

18. The second question is…
Does Blockchain apply to my scenario?
What technology should I build on?
How do I translate workflows into smart contracts?
What does it take to build a distributed app and connect it to my existing infrastructure?

19. Choose the ledger technology that meets your needs

20. Deploy in the topology of your choice
Dev/Test: Enable developers to get started
Single node (virtual machine) 1
Single Member: Simulate production for multiple divisions within a single organization
Multi-node across single region 2
Multi-member: Collaborate between multiple divisions and organizations
Multi-node across multiple regions, Azure subscriptions, and/or organizations 3

21. Overcome technology gaps
Database-like speeds for transaction throughput and latency
Richer and more flexible confidentiality models
Configurable constitution to govern membership
Consortium Governance
Scalability
Confidentiality

22. The third question is… Does Blockchain apply to my scenario?
What technology should I build on?
How do I translate workflows into smart contracts?
What does it take to build a distributed app and connect it to my existing infrastructure?

23. Today, you can codify a workflow as a smart contract
Variable Items % Rate Payment Amount
Static Items
Payment Date | Late Date | Term
Assets or Security | Amount Financed
Total Sale
Payments & Fees Recorded in Ledger
Date
Payment
Late Fee
12/1/16
$500.00 $0
1/1/17
Traditional Contract Mortgage

24. But it cannot deliver enterprise security or scale
Variable Items % Rate Payment Amount
Proprietary code stored in shared data layer.
Unable to call off-chain data
Security
Static Items
Payment Date | Late Date | Term
Assets or Security | Amount Financed
Total Sale
Storing business logic on-chain means that it has to be re-written for each chain, limiting scaling
Scale
Payments & Fees Recorded in Ledger
Date
Payment
Late Fee
12/1/16
$500.00 $0
1/1/17
Traditional Contract Mortgage

25. You need a re-imagined architecture
Presentation Layer
Presentation Layer
Presentation Layer
Business Logic
Cryptlets
(Business Logic)
Data Layer
Blockchain (Data Layer)
Blockchain (Data Layer)
Stored Procedures (Data Handling)
Smart Contracts
(Business Logic)
Smart Contracts
(Data Handling)
Traditional 3-Tier Software Architecture
Early blockchain Dapp architecture
Blockchain + Cryptlets

26. So apps can use the patterns, tech, and talent you already trust
Securely call off chain data
Code in traditional languages with existing devs
Write once, use for multiple ledgers
Security
Productivity
Modularity

27. The fourth question is…
Does Blockchain apply to my scenario?
What technology should I build on?
How do I translate workflows into smart contracts?
What does it take to build a distributed app and connect it to my existing infrastructure?

28. Getting Off the Island
Lab projects and PoCs can be disconnected islands. Customers want bridges

29. An enterprise-friendly platform
Banking, Capital Markets
Discrete Manufacturing
Retail & CPG
Healthcare
Government
Professional Services & Support
Connect to existing apps and workflows
Industry Solutions
Horizontal SaaS & Adapters
App Builder
Workflow Design & Orchestration
1st Party
3rd Party
…….
Identity & Key Management
Data
Platform
(ML/BI)
Secure Off-Chain Execution
Monitoring & Security
3rd Party
Services
Developer Services (Tools, Team, CI/CD)
Coordinate with relevant tools
Middleware
Fully-Managed Distributed Ledger
Hosted Compute (VMs)
Fully managed enterprise ledgers
Partner Distributed Ledger A
Partner Distributed Ledger B
Partner Distributed Ledger C
Partner Distributed Ledger D
Ledger Core
Partner Distributed Ledger E
Coco Framework
Azure & Azure Stack – Blockchain resource provider

30. With a clear, simplified approach
9/16/2018 5:43 PM
With a clear, simplified approach
API
Ingestion Hub
DLT Services (API, Hashing, Signing)
Blockchain Ledger
Off-Chain DB
Off-Chain Storage
Azure Functions
Reference Data
Power BI
APIs
Logic Apps
Event Hub
Consuming Apps, Services & Systems
Data Sources
Apps
Sensors Data
Azure AD
Azure Key Vault
Application Insights
Virtual Networking
*Internal MS Services analysis
© 2013 Microsoft Corporation. All rights reserved. Microsoft, Windows, and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

31. Freight Transportation
PRODUCER
Food Processor
Milk producer supplies Milk to Food Processing Company
The milk product is sealed in an IoT enabled package for shipping
The package has to be maintained at :
Temperature < 10º C
Humidity < 65%
SMART CONTRACT
CARRIER 2
Warehouse
CARRIER 1
The terms of shipping are registered using a smart contract on the Blockchain
11ºC
66%
SMART CONTRACT
UPDATED
Retail Store
The conditions of the contract have been violated.
Carrier 3 is liable for penalty as the temperature of the package when it reached the retail store was above the prescribed limit
SHARED LEDGER
Origin
8ºC
60%
Warehouse
9ºC
64%
Carrier 2
9ºC
64%
Store
11ºC
66%
IoT Enabled
At various points in the journey, the IoT device from the package sends the Temperature & Humidity data which are recorded on the blockchain

32. Demo Zeyad Rajabi 9/16/2018 5:43 PM
© Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

33. Microsoft is committed to your blockchain journey
Blockchain on your terms
Integrate your app
Write a smart contract
Integrated with your business
Select a ledger
With enterprise assurance
Identify your use scenario

34. Learn more
Come by our booth to check out the Azure Blockchain App Builder
Visit our Azure Blockchain Solutions Page
Visit the Azure Blockchain Blog
Connect with the Microsoft Tech Community
Join the conversation on Azure Advisors

35. Please evaluate this session
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9/16/2018
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© 2012 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.
The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

37. Build on a foundation that enables you to…
Choose the ledger technology that meets your needs
Deploy in the topology of your choice
Overcome technology gaps