At its InterConnect conference in Las Vegas this week, IBM is announcing new features for its open source cloud-hosted blockchain service in an attempt to bring this distributed database technology from its initial use of powering Bitcoin to a broader market, including the financial services industry.
Blockchain is a distributed database that maintains a continually growing list of records that can be verified using hashing techniques. Vendors such as IBM and Microsoft are attempting to commercialize it by offering customers a platform for hosting their own implementations. Analysts say the market to do so is just emerging.
IBM has supported blockchain implementations for more than a year, but this week the company is announcing a beta version 1.0 of its service, which is based off the open source Hyperledger Fabric – a Linux Foundation project. It’s available in IBM’s Bluemix Cloud. IBM says Hyperledger can process up to 1,000 transactions per second.
Also new in the 1.0 version are a series of tools that IBM says will make it easier to manage blockchain implementations. These include policies for administrators to set up blockchain networks, assign roles and levels of visibility, manage membership and enforce compliance.
IBM is also launching a Fabric Composer, which is a platform for making APIs that integrate with the hosted blockchain service. The idea is that IBM would host the secure, cloud-based infrastructure that blockchain implementations would run on.
Forrester Research Principal Analyst Martha Bennett says these are “significant” steps toward adding enterprise functionality to this technology, but “there are many steps that need to follow.”
Despite the significant amount of hype around blockchain, Gartner Research Director Rajesh Kandaswamy says the market is still in its earliest stages. “It’s a really interesting market because there is so much potential,” he says. “At the same time, there’s this disconnect between the work that’s in trials and proof of concept versus what is going on in production.”
Blockchain implementations have a handful of defining characteristics, Bennett says: It’s a write-once and append-only system (meaning records in the database cannot be changed, records can only be added to the ledger); it’s distributed and at least partially replicated in multiple locations; it’s crypto-secured through a public or private key infrastructure and it uses hashes.
The hash functionality is particularly important, Bennett notes. “Each individual transaction is hashed into the chain, and each block, which contains a bunch of transactions, is also hashed, which links it to the previous block,” she explains. “The moment anyone tries to change a transaction, everyone who has access to the chain would know immediately that it’s been tampered with because the hash wouldn’t match.”
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