These are the show notes for the Unchained podcast, available on Google Play, iTunes, iHeartRadio, Stitcher or TuneIn Radio, and sponsored by OnRamp. Also, listeners, please help me make the podcast better by taking my survey.
Jerry Cuomo, who has spent his whole career at IBM, has watched the internet revolution change everyday people’s lives. Now the vice president of blockchain technologies, Cuomo says that when he learned about blockchain technology, which was introduced to the world through bitcoin, he thought, “This is it. This is the next big thing.”
In the most recent episode of my podcast Unchained (Google Play, iTunes, iHeartRadio, Stitcher or TuneIn Radio), Cuomo explains that the way he was introduced to it was through his work on mobile payments. His teams was working with ideas around game-ification, loyalty points, levels and rewards, when an engineer explained the construction of bitcoin to him.
“I knew about bitcoin, but someone introduced the design pattern under bitcoin to me …. I couldn’t care less about bitcoin — it was interesting, but it wasn’t what was capturing my attention. What was was this design pattern, and I asked what it was called and they said it was blockchain,” he says. “A couple months later, we had stopped working on payments and game-ification and we were working on blockchain.”
What began as a bunch of hobbyists across IBM’s multinational offices taking an interest in blockchain has now become a global business unit at the $150 billion company. Now IBM is one of the leading enterprise companies pursuing blockchain projects and a premier member of the enterprise blockchain Hyperledger project. To test its blockchain projects, it has forged partnerships with key players such as Walmart and Maersk across a diverse group of industries including financial services, but also beyond in areas such as supply chain, pharmaceuticals, digital rights management for music, identity and others.
In this episode, we discuss several of IBM’s partnerships, how private blockchains manage security (you may be surprised to find out how few nodes can be needed in a when trusted players set up a blockchain together), how blockchain projects can go from the crawl to the walk to the run phase (a “shadow ledger” is helpful), and whether or not IBM will be locking its clients into software that began as open source.
To describe just one of its projects that leverages a relationship with a major industry player, IBM has partnered with Walmart, to use blockchain technology to manage food supply issues. “We’re fortunate to have partners like Walmart collaborating with us to stand up a network … and not only do something good for business but also do something good for society,” says Cuomo. For instance, he says, using blockchains to track the movement of food from supplier to the grocery shelves will not only reduce waste but also mean that for, say, a salmonella outbreak, the recalls could pinpoint which farm the pork originated from, rather than shutting down suppliers from an entire region.
To describe how IBM is getting from the crawl to the walk phases of its projects, he gives the example of the Walmart food quality project. “Some of the work we’ve done with our teams in China is, let’s shoot a tracer through the system, let’s go end to end, get multiple institutions involved using the same ledger and run a couple [tests] through. Let’s look at a shipment, going from an exporter to a regional supplier to border patrol, etc., etc., and look at the transaction going through the ledger to make sure the system is working as expected. That’s the crawl phase,” he says. “The walk phase is to get more and more institutions gaining visibility on that ledger, including more members of that ecosystem, so maybe a food processing company, maybe a retail company, etc., and start building out the members of that ecosystem now leveraging that ledger.”
Other interim steps IBM would take are to start a blockchain as a shadow ledger so that while the technology is still being developed, it can still be used but if it has a bug, it doesn’t take down the whole entire system. “The shadow ledger is there to follow and enrich the main business process and add value, and in that case, the value is visibility across multiple groups,” he says. “As we build up that, over time, that will become this system of record, but we don’t need to rip and replace all the existing systems before we start bringing value into that ecosystem.”