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UBS CEO: Blockchain to Play 'Big Role' in Reshaping Industry

Add the CEO of Swiss banking giant UBS to the “blockchain not bitcoin” crowd.

In a new interview with CNBC this week, Sergio Ermotti expressed doubt about cryptocurrencies, stating that the role of the technology still “needs to be defined.”

However, he was more bullish on private distributed ledger technologies, noting his company has already invested in a partnership with IBM to run international trade transactions on a blockchain.

He told CNBC:

“I believe there is a future for blockchain technology, and [that] technology will play a big role in changing and reshaping our industry.”

With the remarks, Ermotti joins other financial sector luminaries, such as Jamie Dimon and Warren Buffett, who have recently cast doubt on both bitcoin and the cryptocurrency asset class more broadly. Although, he perhaps hinted most at the divide between permissionless blockchain technologies, like bitcoin, and bank-sponsored alternatives.

UBS and IBM’s joint project, for example, is called Batavia, and it has been built on the open-source Hyperledger Fabric framework.

IBM announced that Bank of Montreal, CaixaBank, Commerzbank and Erste Group had all also joined the project earlier this month.

Photo via Remy Steinegger at World Economic Forum

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Blockchain History? IBM Ventures Is Close to Making Its First Industry Investment

The venture arm of one of the most recognizable names in the tech industry hasn’t yet put its money where its mouth is on blockchain – but that may be about to change.

While global tech giant IBM has so far focused mostly on investing employee time and energy into the emerging technology, it’s only just now gearing up to take an equity stake in an industry startup. In what will no doubt be taken as a sign of the blockchain industry’s maturity, for IBM Ventures, investing cash is finally becoming more attractive.

And with several hurdles removed from the investment firm’s strategy – including, most notably, the need for the rounds to be Series B or higher – IBM Ventures has got its eyes on candidates.

Christoph Auer-Welsbach, a partner at the firm, told CoinDesk:

“From a time perspective, the time already is right.”

Auer-Welsbach went on to shine a light on who the companies may be, hinting that the blockchain startups he’s been watching are in the supply chain management and compliance verticals.

Investing in blockchain

In short, a cash investment in a blockchain company is square in IBM Venture’s sights, but there are several conditions that now need to be met. For starters, IBM’s investments are expected to occur within 18 months to five years of the company’s maturity – the widespread adoption of its product – and further, investments are limited to purveyors of business-to-business products.

This last criteria is one of the reasons IBM has eschewed cryptocurrency applications, said Auer-Welsbach.

He told CoinDesk:

“Most companies in the space are in the cryptocurrency field, which we don’t see from a B2B perspective as the ultimate angle for us to add value.”

Plus, IBM’s main priority continues to be to creating critical mass around its blockchain platforms (IBM Blockchain Platform and Hyperledger Fabric), and this trumps generating revenue on any investments.

In order for a company to attract Auer-Welsbach’s attention, then, it has to have a proven, repeatably successful business model, with multiple clients, making it better suited for the kinds of interaction that create a strong sense of community around a platform.

For example, IBM Ventures recently opened up its coffers as the lead investor of a $15 million round in Lightbend, an open-source platform for users of the Scala machine-learning language that already has multiple corporate customers.

Building the fabric

But because there aren’t many blockchain companies at that level, Hyperledger Fabric remains IBM’s pride and joy for cultivating its work with the blockchain industry.

Within Hyperledger Fabric, groups of like-minded firms often develop into more formalized consortia – such as the global trade digitization effort led by shipping giant Maersk and a food safety effort spearheaded by Walmart.

In interview with CoinDesk, the general manager of IBM’s blockchain unit, Marie Wieck, elaborated on Auer-Welsbach’s notion that the company wants to develop more such communities.

Specifically, Wieck said that IBM’s internal investment in cloud computing could be seen as the “plumbing layer” of blockchain ecosystems, while outside IBM, getting institutional investors like Boldstart VC to back companies building enterprise solutions on Hyperledger Fabric is key to its mission.

In his work with Fabric, Auer-Welsbach is on the lookout for services that can be implemented with only minimal consulting, and platforms that can be adjusted for new industries with just a few “little tweaks here and there.”

He concluded:

“That’s the time when I would say this is really interesting to us to invest in.”

Natural history museum image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

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Inside the Blockchain Factory: How IBM's Distributed Ledger Work Went Global

For one of the world’s largest tech companies, “small” is a relative term.

So when IBM, a tech conglomerate that boasts 380,000 employees, says it has a “small” team working on blockchain, by startup standards, it’s anything but.

Far from just building a garage and staffing it with a few engineers, IBM has created IBM Garage, a fully fledged product for companies that want access to its expertise, itself just one way it is seeking to operationalize its team of 1,500 blockchain professionals now operating out of a dozen offices.

Perhaps more impressively, all those moving parts are choreographed by one person: Marie Wieck, a 20-year veteran of IBM and the general manager of its newly created blockchain unit.

In an exclusive interview with CoinDesk, Wieck explained what it takes to build distributed networks using both its proprietary IBM Blockchain Platform and the open-source Hyperledger Fabric, which her firm helped pioneer. For companies looking to gain access to one of those networks, build their own network or compete against IBM, the step-by-step description provides a rare glimpse into how the $135 billion company conducts its blockchain business.

Speaking from her office at IBM’s Watson headquarters in downtown Manhattan (one half of what is internally referred to as “Blockchain North”), Wieck painted a picture of a distributed team that in many ways mirrors a blockchain in its design.

She told CoinDesk:

“We’re trying to keep as co-located as possible with the teams working together so we can really focus on the speed to market that we want to see.”

Blockchain North

While her job now is buzzing back and forth between the Manhattan location and the Thomas J. Watson Research Center in Yorktown Heights, New York (the other half of Blockchain North), Wieck first started working with IBM back in 1997 when she joined as a founding member of the company’s nascent internet unit.

As part of this team, she began a career of finding business use cases for cutting-edge technology that would eventually include XML, web services and mobile, preparing her in many ways for her current task of helping IBM’s clients with blockchain.

The “solution work” of this process – as Wieck calls it – is centered around Blockchain North, the assembly line mechanism of the project, where staff help clients around the world build applications using the IBM Blockchain Platform.

Due in large part to the open-source code at the core of IBM’s blockchain strategy, one which lets clients build on their own distributed ledgers as well, Wieck frequently doesn’t get involved until the clients – or potential clients – are already well advanced in their work.

As for work on that open-source platform, and the IBM Blockchain Platform itself, that largely takes place 511 miles south.

Blockchain South

IBM Research Triangle Park

Known as “Blockchain South,” the Research Triangle Park offices in Raleigh, North Carolina, are home to what Wieck calls IBM’s “platform work.”

This is where the IBM Blockchain Platform – unveiled for enterprises last month – has been developed for the past three years. The platform is designed to be an end-to-end or “full-cycle” solution where developers and managers can experiment with the technology, building it and testing it either by the hour or via subscriptions.

This platform is the machinery that in part cranks out the solutions in Blockchain North. But “platform work” also has another meaning at Blockchain South.

For builders around the world with a more adventurous bent, this is also where they can go to hire help on projects that bypass IBM’s proprietary platform and go straight to its open-source core: Hyperledger Fabric.

While Fabric comprises about one-third the total code used in the proprietary IBM Blockchain Platform, anyone can build on it – even if what they want to create is a direct competitor to IBM.

“Whatever they need to do at the technical level to operate or to build a blockchain network, we would like to see continuing to expand in that platform,” said Wieck.

Littleton, Massachusetts

IBM Mass Lab - Littleton campus

IBM’s newest blockchain offices are located at the IBM Mass Lab in Littleton, Massachussets.

Originally opened in January 2010 as what was then touted by IBM as the largest software development lab in North America, the location now serves as a satellite location of sorts for Blockchain North.

But instead of being focused on solutions work generally, the location is helping develop what Wieck calls “solution accelerators,” or frequently used widgets such as the provenance engine required by many of IBM’s clients to track items.

Crucially, however, this is also the base operations for another kind of solution: governance.

Based on the lessons learned from other implementations, IBM uses the Littleton branch to help companies write software to onboard new members, develop consensus mechanisms so they can find ways to agree, and if things go wrong, kick bad actors off the network.

Or as Wieck put it:

“How to actually operate a network at scale.”

In the garage

IBM Bluemix Soho

Arguably the most startup-like component of IBM’s blockchain work, Wieck also oversees nine “Bluemix Garages” scattered around the world, in New York City, Toronto, San Francisco, London, Nice, Tokyo, Singapore, Austin and Melbourne.

Initially launched in 2014, the collaborative locations are similar to WeWork facilities, but with startups hand-selected to receive support from IBM.

Gradually, those locations are being adapted to accommodate increasing demand by blockchain companies. Most recently, this July, the BlueMix Garage in the Soho area of New York (pictured above) expanded to include support for blockchain services.

At these disparate locations, and in any real garages where people build on the open-source technology Wieck helped develop, she said the basic principles that form IBM’s blockchain networks first take root.

“To me, it’s kind of like a mall,” she said, concluding:

“You may have the anchor tenants, but you don’t stay in a mall unless the food court is good, there’s good movies playing. You want all of those value-added services around that network.”

Globe image via Shutterstock; IBM office images via Michael del Castillo for CoinDesk

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].