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Private Shared Ledgers:The new age of the consortium
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What This Will Cover?
• Different Trust Models• Privacy & Confidentiality Key Design Feature• What is a Private Shared Ledger?• Why Use A Consortium?• Different Types of Consortiums• How To Form a Consortium/Structure• Example• How IOT fits in
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Traditional Clearing House
Fully DecentralisedHybrid Private Model
Reliance on central intermediary or custodian
Public blockchain model
Trusted shared ledger for private consortiums
Lead / Master Node
Private Hybrid Model
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DCS Triangle – the trade-offs for achieving confidentiality
Enterprise
/Planetary Scale
Fully
De
cent
raliz
ed
Consistent
High ThroughputHigh CapacityLow Latency
Anyone can jointhe network as a
validator
All nodes see the same dataat the same time
A BInitiate transaction
Posts record to the transmission network
Broadcast this transaction to the network
Validate transaction
Record to blockchain
Come to consensus on transaction
Transaction completed
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DISTRIBUTEDTRUST
CENTRALISEDTRUST
No broadcasting to nodes (other than the counterparties)
Rules based engine (validation is “node to node” or via one node, based on the operating rules agreed between ledger participants)
Recorded onto the individual nodes of the counterparties – with no sync required across the remainder of the distributed ledger
vs
Private Shared Ledgers – New approaches to validation and consensus
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Private Shared Ledgers: common features
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Cryptographic Tools Being Deployed to Solve The Privacy Problem
• Zero Knowledge Proofs• Zk-SNARKS• zCash• Hawk• Confidential Transactions• State Channels
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Why Use a consortium• The success of blockchain and shared ledger technologies requires significant levels of market participation
collaboration and investment.
• The consortium is less about a technology solution or a particular business model, and more about a way for companies to come together and collaborate.
• Participants don’t need to trust each other. The participants on a shared ledger just need to have similar requirements in terms of:
• ++ the mix of confidentiality and transparency (as captured in the design choices and operating rules for the shared ledger platform);
• ++ functionality and processes;• ++ the approach to governance; and• ++ a shared view of regulation and compliance
and they need to commit to complying with the operating rules of the consortium.
• Where the participants are known to each other, they can leverage the efficiencies of working on a private shared ledger:
• ++ to deal with other participants directly, without the need for a third party intermediary; and• ++ to innovate in a cost effective manner – and collaborate with other consortium members where it makes
sense.
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Shared Ledger Platforms
Public PrivateEg: R3, AMIS, Utility Settlement Coin
PlatformConsortia
Inter-Company Shared Ledgers
Distributed Autonomous Communities
Intra-Company Shared Ledgers
BusinessDivisions
BusinessSuppliers
BusinessConsortia
Hyperledger
• Trend towards open source
• Race to be the ubiquitous shared ledger platform
On public blockchain
On private shared ledgers
Private Shared Ledgers: new consortia emerging
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Consortium Agreement Participant Agreement
Consortium Promoter
FoundingMembers
ParticipatingMembers
Non-Participating
Members
Governance Board
Decisions re Consortium
Shared LedgerPlatform
OperatingRules
Smart Contracts System
RulesEngine
TechnologySupplier
Decisions to be implemented on
Ledger
Consortium Manager
Management of consortium operations
Mapping File
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changes state
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Ensuring consistency between smart contracts and “real world contracts”
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Distributed Ledger
Vault
SmartContractSystem
CO (Centrally Organised)Governance Board
CODE – example of new governance framework for shared ledgers
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2nd Global Blockchain Summit Shanghai September 2016BHP proposal to share public regulatory information
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2nd Global Blockchain Summit September 2016BHP proposal to share public regulatory information
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2nd Global Blockchain Summit Shanghai September 2016 - BHP presentation
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2016 – BHP: Tracking wellbore samples
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Project Rai Stones delivers a blockchain based sample tracking system ready for production
What this means for BHP Billiton• Improves wellbore sample data access to almost
real-time status• Provides greater transparency to BHP Billiton
business units, vendors and government agencies• Reduces human error and cost of compliance• Confirms readiness of the blockchain to begin
exploring more user-cases
Non monetary use cases• First business use of embedding process on the
blockchain beyond simple value transfer use cases within financial services
• Extends the blockchain beyond data to logic and leverages the power of smart contracts available through Ethereum
2nd Global Blockchain Summit Shanghai September 2016 – BHP: Tracking wellbore samples
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Shared ledgers for supply chains
Blockchain and supply chains
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Blockchain and IoT
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Blockchain and IOT: Filament
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Blockchain and IOT: Filament
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Conclusion
• Institutional trust wasn't designed for the digital age. • The emergence of shared ledger technologies –
empowered by consortia – is a game changer for a major trust shift, which will empower new business models and relationships between corporations and consumers.
• If shared ledger technologies realise their full potential, then the consortium model should thrive and be sustainable in the way that hasn’t been possible in the past.
