IN THIS CHAPTER

Preparing for artificial intelligence blockchain apps

Building your IBM Fabric

Creating smart contracts

Deploying an Internet of Things solution

In this chapter, I introduce you to IBM’s blockchain initiatives, which IBM is merging with its other groundbreaking technologies, such as Bluemix, a full Platform as a Service (PaaS) for application building, and Watson, its super computer.

Blockchain technology creates a near-frictionless value exchange. Artificial intelligence accelerates the analysis of massive amounts of data. The merging of the two capabilities will be a paradigm shift that affects the way we do business and secure our connected electronic devices.

If you’re involved in the Internet of Things (IoT), healthcare, warehousing, transportation, or logistics industries, you will benefit from the information in this chapter. Also, if you’re an entrepreneur and would like to learn about the new capabilities that come with the integration of artificial intelligence (AI) and blockchain on a scalable app platform, this chapter is for you.

Business Blockchain on Bluemix

IBM is now offering blockchain technology that integrates with its traditional offerings, such as IBM Bluemix. Bluemix is an open-standards, cloud-based PaaS for building and managing applications. IBM has integrated a blockchain stack from Hyperledger, which is part of the Lynx foundation and is establishing best practices in blockchain technology.

You’ll want to prepare for rapid and fundamental changes within IBM’s blockchain initiatives. The technology is very new and still under incubation, both within IBM and Hyperledger.

Hyperledger has several different subprojects in development. As of this writing, IBM is using Fabric, but it may open up Bluemix to other projects. Fabric is open source and under active development within Hyperledger. You can start testing Fabric on Bluemix by using Hyperledger Fabric v0.6. However, IBM warns against running any valuable transactions directly on Fabric v0.6 or any earlier version.

Your isolated environment

Bluemix is the newest cloud offering from IBM. It’s an implementation of IBM’s open cloud architecture based on Cloud Foundry, an open-source PaaS.

Bluemix enables you to rapidly and easily come up with applications, deploy them, and manage them. Bluemix offers enterprise-level services that can integrate with applications without needing to know how to install or to configure them.

Figure 11-1 shows how IBM relates different aspects of blockchain and IBM systems. You can find out more at https://goo.gl/12Q6no.

IBM Bluemix provides four core things:

• Computing infrastructure based on your apps’ architectural needs
• The ability to deploy apps to a Bluemix public or dedicated cloud
• Dev tooling, such as code editors and managers
• Access to third-party open-source tools in their service section

Bluemix gives you everything you need to build your app. It’s now offering blockchain infrastructure to test as well.

They have a service for integrating your applications with the Bluemix blockchain. As of this writing, there are two pricing models. A free account gets you what you need to test your idea. You get four peers and a cert authority to sign transactions, as well as a dashboard with logs, controls, and APIs.

The enterprise plan is priced at $10,000 a month and offers higher security and speed than the free model.

Watson’s Smart Blockchain

IBM’s supercomputer, Watson, is also available on the Bluemix platform. Watson is a cognitive computing artificially intelligent computer system. It can analyze structured and, more impressively, unstructured data at incredible speed.

This technology is still developing, and customers have complained about its true ability to understand unstructured written language.

Watson can answer questions posed to it through natural language and learn as it absorbs more information. The implication of this technology, when married with blockchain technology, is astounding. One of the first implementations is within the IoT space. There is a strong need to secure data that is emitted from these devices and then make it actionable and intelligent.

Watson’s Cognitive computing is simulating human thought processes and using the MQTT protocol. Like a human mind, it grows over time. Its self-learning systems use data mining, pattern recognition, and natural language processing to mimic the way your brain works. Watson processes at a rate of 80 teraflops per second (one teraflop is a trillion floating-point operations). To put this into context, that replicates — and in some cases surpasses — a high-functioning human’s ability to answer questions. Watson is able to do this by accessing 90 servers with a combined data store of more than 200 million pages of information, which it processes against six million logic rules. Watson is about the size of ten refrigerators, but it’s been getting smaller and faster.

Figure 11-2 shows the how IBM Watson relates different aspects of blockchain and IBM systems. Dive deeper at IBM https://goo.gl/12Q6no.

IBM is applying these amazing capabilities to IoT data feeds that utilize Chaincode implementation. Chaincode is a Hyperledger smart contract system. Here’s how Watson-enabled blockchain for IoT devices will work:

• IoT devices send data to your private blockchain ledgers for inclusion in shared transactions as a tamper-resistant record marked in time.
• Partners and third-party service providers can access and supply IoT data as well, without the need for central control and management.
• All parties can sign and verify data, limiting disputes and ensuring each partner is held accountable for their individual performances.

This is a simple implementation that does not take advantage of all the functionality and capabilities of Watson. Watson’s ability to learn and make suggestions, and update out-of-date information will truly make it a powerful blockchain-enabled application in the future.

You can integrate Watson’s IoT Platform with Fabric from Hyperledger. This integration allows you to execute Chaincode contracts through cognitive computing oracles. Watson’s IoT platform has built-in capability that lets you add selected IoT data to your own private blockchain to create an oracle. This helps you protect the data from being viewed by unauthorized third parties.

When you’ve established a Bluemix workspace, you can add selective services, including the IoT Platform that integrates several technologies. Fabric is the blockchain technology that provides the private blockchain infrastructure for distributed peers that replicates the device data and validates the transaction through secure contracts.

Watson IoT Platform translates existing device data, from one or more device types, into the format needed by the smart contract APIs. Watson’s IoT Platform filters out irrelevant device data and only sends the required data to the contract. Figure 11-3 shows the how IBM Watson integrates with IoT devices and APIs. Watson acts as the Chaincode oracle and allows you to control what information is known to the parties involved in the contract. This functionality is important for privacy.

Building Your Starter Network on Big Blue

IBM’s blockchain technology and IoT Platform offer new promising tools and can be leveraged to address many problems facing companies that are trying to scale:

• Security: The huge volume of data that’s collected from millions of devices raises information privacy concerns. Also, hacked IoT devices have been used by nefarious organizations to cripple websites with distributed denial of service attacks.
• Cost: The high volume of messages, data generated by the devices, and analytical processes are going up as more devices come online and utilize that data.
• Architecture: Centralized cloud platforms remain a bottleneck in end-to-end IoT solutions and a central point of attack.

IBM’s open-standards-based distributed IoT networks can solve many of the problems associated with today’s centralized, cloud-based IoT solutions. Connected devices communicate directly with distributed ledgers. Data from those devices is then be used by third parties to execute smart contracts, reducing the need for human monitoring.

The IBM Watson IoT Platform with a Fabric integration replicates data across a private blockchain network and eliminates the need to have all IoT data collected and stored centrally. Decentralized blockchain networks also improve the security of IoT devices. Unique digital identities are built for each device over time. This new way of creating and securing identity is exceptionally hard to spoof.

These new blockchain identities allow IoT devices to sign transactions that allow smart contracts to execute. A practical application of this would be an insurance product that was fed data from a smart car on the driving behavior of different individuals. The car would send data to be published in Fabric; the insurance product built with Chaincode would then recognize the new data and the identity of your car and update your policy.

The possibilities are nearly endless, and IoT has introduced huge opportunities for businesses and consumers, especially in the areas of healthcare, warehousing, transportation, and logistics.

There are three main tiers of IBM cloud-supported IoT solutions that meet the needs of different IoT business problems:

• Devices Gateway: Device Gateway is for smart devices or sensors that collect data about the physical world. This could be things like weather sensors, temperature monitoring for refrigerated containers, or vital statistics data for a patient. These IoT devices send their data through the Internet for analysis and processing.
• IBM Watson IoT Platform: IBM combines its supercomputer with its IoT Platform to collect data from IoT devices and then analyze the data and take subsequent actions to solve problems. Watson provides machine learning, machine reasoning, natural language processing, and image analysis that enhance the ability to process the unstructured data collected from the sensors.
• IBM Bluemix: Bluemix is an open-standards-based cloud platform for building, running, and managing applications and services. It supports IoT applications by making it easy to include analytical and cognitive capabilities in those applications.

You can learn more about the IBM solution at https://developer.ibm.com/technologies/blockchain.