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Blockchain	– Apt	data	store	for	
serverless apps
What	is	blockchain?
3
Secure
Shared
Distributed
Ledger
Blockchain is	a	secure,	shared,	distributed	ledger
4
That	decentralizes	data	in	a	trustless	environment
Traditional	System
Centralized system with
stored ledger
Blockchain System
Distributed system with
distributed ledger
§ Traditional	ledgers	are	centralized	and	use	3rd
parties	and	middlemen	to	approve	and	record	transactions
§ Blockchain	safely	distributes	ledgers	across	the	entire	network	and	does	not	require	any	middleman
§ The	technology	maintains	multiple	replicas	like	p2p	torrent	file	sharing
5
Decentralization	has	great	benefits	&	changes	
fundamental	processes	&	models
Eliminates Intermediaries
Reduces Fraud
Increases Efficiency and Speed
Increases Revenue and Savings
6
And	it	will	disrupt	multiple	industries
Retail & Manufacturing
Financial Healthcare Government
7
Example	scenarios	in	the	financial	industry
Trade settlement
Trade finance
8
How	does	it	work?
9
Ledger:	Blockchain	uses	a	distributed	ledger	to	track	transactions
§ A	ledger	is	a	write	only	database	most	commonly	used	in	accounting
§ The	digital	distributed	ledger	creates	the	same	copy	of	the	data	across	all	the	participating	nodes
§ All	new	transactions	are	digitally	signed	and	then	broadcast	across	the	blockchain	network	to	be	added	to	the	system
§ Participants	in	the	blockchain	verify	the	transaction	is	valid	and	then	writes	it	to	the	ledger
§ This	is	the	technology	originally	designed	to	power	the	bitcoin	currency
Entire network has same
ledger
FROM TO PROPERTY VALUE
Alex Katie Payment $500
Jim Sally Payment $300
Alex Garth Asset Car	
Katie Tony Payment $100
Molly Paula Message I	love	you
Example ledger
10
Example:	Blockchain to	track	financial	transactions
In	this	example,	Alex	wants	to	send	Katie	$500 via	a	financial	transaction	blockchain system	
Alex Katie Payment $500
Transaction	(Tx)
From:	Alex	(0xf5e…)
To:	Katie (0x992…)
Amount: 500
Digital	signature	
0x23e423s3234…
Transaction information goes
through hash functions
Tx
Signature
Tx
Signature
Tx
Signature
Tx
SignatureTx
Signature
Tx
Signature
Tx
Signature
Confirmed transaction gets
pushed to network
11
More	complex	example:	Blockchain	to	track	assets
§ In	this	example,	a	smartphone	and	all	of	its	components	are	captured	in	a	blockchain system	used	to	track	products
§ A	unique	identifier	for	the	smartphone	is	created	based	on	all	the	parts	of	the	smartphone
§ This	unique	identifier	for	the	smartphone	can	be	used	to	track	that	unique	item	within	a	blockchain
Digests of Parts Smartphone Digest
All parts get a hash (digest) based on product
serial number + manufacturer
All digests of parts are combined into one
unique digest for the phone
12
Blockchain	evolving from	simple	ledgers,	to	cryptlets that	fetch	trusted	
and	agreed-upon	external	data	needed	to	execute	Smart	Contracts
Smart	Contracts	are	unable	to	access	external	data	or	events	based	on	time	or	market	conditions.	Calling	code	or	data	outside
of	a	Smart	Contract	or	blockchain	breaks	the	general	trust	barrier	and	authenticity	of	transactions.	Cryptlets	will	allow	the
blockchain	to	access	external	data	securely,	while	maintaining	the	integrity	of	the	blockchain.
Microsoft Innovation
13
Blockchain	3.0,	Project	“Bletchley,”	extends	the	power	of	
blockchain	through	state-of-the-art	“cryptlets”	innovation
§ Blockchain	2.0	introduced	the	power	of	Smart	Contracts…
§ …but	Smart	Contracts	are	unable	to	access	external	data	or	events	based	on	time	or	market	conditions
₋ Calling	code	or	data	outside	of	a	Smart	Contract	or	blockchain breaks	the	general	trust	barrier	and	authenticity	of	transactions
§ Cryptlets will	allow	the	blockchain	to	access	external	data	securely,	while	maintaining	the	integrity	of	the	blockchain
§ Cryptlets are	a	Microsoft	innovation	and	solve	a	significant	hurdle	to	enterprise	blockchain	adoption
Property
0x117292138928
edc23dc21323c
Value
0x893423022ef8s92d1
223412dds321ac
Property
0x117292138928
edc23dc21323c
Value
0x893423022ef8s92d1
223412dds321ac
Code
Contract	accountRegistry(mapping	
(string=>	address)	accountMap;	
function	accountRegistry()(…
Property
0x117292138928
edc23dc21323c
Value
0x893423022ef8s92d1
223412dds321ac
Code
Contract	accountRegistry(mapping	
(string=>	address)	accountMap;	
function	accountRegistry()(…
Interest	Rate
0x132945934528
asf0439dsa3x
Demo:	Using	Blockchain in	Real	Estate	Transactions
15
Buying	a	home	takes	weeks	&	includes	large,	unnecessary	fees
Multiple	parts	of	the	process	can	be	improved	using	blockchain:
§ Home	title	transfer
§ Escrow	account	management
§ Loan	process
1. Buyer looks for a home
5. Buyer owns home
2. Negotiate terms with seller
3. Secure loan from bank
4. Escrow management
16
Title	transfer	can	be	reduced	from	weeks	to	minutes
Currently,	in	order	to	transfer	a	home	title	from	a	seller	to	a	buyer	the	following	steps	need	to	take	place:
§ Title	company/officer	conducts	title	search	for	seller’s	home	
§ Conveyancer	creates	a	legally	binding	real	estate	deed
§ Title	company/officer	files	the	deed	with	the	county	recorder's	office	(government)
The	current	process	takes	several	weeks.	Blockchain seeks	to	reduce	this	process	to	minutes.
Central government
home title repository
Traditional	System Public	Blockchain System
Public home title
repository
17
Escrow	time	&	costs	can	be	reduced	or	eliminated
§ The	buyer	puts	money	into	an	escrow	account	until	the	conditions	of	the	sale	are	satisfied,	at	which	point	payment	is	made	to the	
seller
₋ The	conditions	are	obligations	that	must	be	fulfilled,	such	as	passing	an	inspection
§ Escrow	companies	usually	charge	.2%	of	purchase	price	and	can	take	several	days	to	process	paperwork.	With	blockchain,	this	charge	
can	be	significantly	reduced	and	process	time	can	be	reduced	to	minutes
§ Smart	Contracts	make	it	possible	to	codify	real	estate	escrow	terms
Make payment to seller if the
following terms are met:
• House inspection results in
no issues
• Both buyer and seller agree
on sale
Otherwise terminate contract
if terms are not met or if
time period exceeds 45 days
Consortium	Blockchain System
Decentralized consortium
of banks/lenders
Smart Contract part of
blockchain
18
Business	Logic
Bank
Property
Registry
Sale	happens
Seller	approvesBuyer	approves
Send	contract	
property
Send	contract	
money
Buyer Seller
Approve	or	
reject
Inspector
Supporting	contracts Escrow	contract
Metadata
19
Architecture
§ Two	servers	– mining	is	computationally	intensive,	so	it	is	done	on	a	different	VM
§ Keys	are	stored	and	managed	on	the	client	geth node
§ State	of	smart	contracts	is	replicated	to	local	database	for	quick	retrieval	– updates	occur	due	to	contract	events
§ Geth backend	can	be	swapped	for	a	private	network	with	an	arbitrary	number	of	nodes	once	ARM	templating work	is	done
Client	geth
node
Node.js	Web	
Server
Server	1
Client
Mining	geth
node
Server	2
MongoDB	
(local	state)
20
How	does	Microsoft	play?
21
Tenets	
of	our
Strategy
FAIL	FAST	&	CHEAP
MIX	&	MATCH	
CREATE	&	INNOVATE	
SHARE	SOLUTIONS	
PROVISION
22
Microsoft	will	execute	on	its	strategy	in	three	steps:	Learning	from	
POCs,	growing	the	ecosystem,	and	building	key	middleware
POCs
HealthcareRetail	&	CPG GovernmentDiscrete	
Manufacturing
Banking,	
Capital	
Markets
Distributed	Ledger	Stacks
Azure
Horizontal SaaS	&	Adapters
3rd	
Part
y
3rd
Party
3rd Party	
DL	stack	A
1st
Party	DL	Stack
1st Party 3rd
Party
Blockchain Virtual	Machine Adapters
Smart	Contract-based	 UTXO	+	others
MiddlewareBase	Platform
3rd Party	DL	
stack	B…
3rd Party	DL	
stack	C…
…..
Industry	Solutions
Blockchain Resource	Provider
CryptoDelegate &	Cryptlet	architecture	(secure	containers,	attestation,	etc.)	
Professional	Services &	Support
Identity	&	
Key	Services
Crypto	
Services
ML	&	BI
Services
Distributed	
Ledger	
Gateway	
Services
Blockchain
Tools
ISVs	&	
Customers
Blockchain
Marketplace
23
1	– Create	a	tight	feedback	loop	between	POCs	&	MS	engineering	
to	enable	quick	iterations	on	our	offerings
POCs
Distributed	Ledger	Stacks
Azure
Engineering
Blockchain	Platform
POCs	will	enable	Microsoft	to	learn	quickly,	
discover	customer	needs,	and	galvanize	our	
partners…
…influencing	BaaS	product	design	and	long-term	
value	delivery	while	saving	rework	for	everyone
24
2	– Drive	partner	innovation	and	scale	by	providing	blockchain	
tools	and	pre-configured	solutions	through	our	marketplaces		
§ Promote engagement	and	innovation	by	onboarding	ISVs	into	Azure Marketplace	and	AppSource
§ Enable customers	and	partners	to	discover,	publish	and	transact	blockchain	components	and	services from	smart	contracts	to	
complete SaaS	offerings
Azure Marketplace and AppSource with 3rd party solutions, smart contracts, and other blockchain components
cryptlet
cryptlet
25
3	– Build	enterprise-ready	blockchain	middleware
§ The	Blockchain Middleware	will	provide	core	services,	
which	will	help	users	create	and	build	on	top	of	
blockchains within	Azure
§ The	core	services	can	be	broken	down	into	the	
following:
₋ Identity	and	Certificate	Services	– Helps	with	
authentication,	authorization,	access,	and	lifecycle	
management.	
₋ Encryption	Services	– Provides	encryption	for	
blockchain transactions	and	fields
₋ Cryptlet Services	– Provides	runtime	for	cryptlets
and	communication	between	blockchain and	
cryptlet trusted	host
₋ Blockchain Gateway	Services	– Provides	
communication	between	multiple	blockchains
₋ Data	Services	– Rich	data	services,	such	as	
analytics,	auditing,	and	machine	learning	
₋ Management	and	Operations	– Tools	for	
deployment	and	management	
POCs
HealthcareRetail	&	CPG GovernmentDiscrete	
Manufacturing
Banking,	
Capital	
Markets
Distributed	Ledger	Stacks
Azure
Horizontal SaaS	&	Adapters
3rd	
Part
y
3rd
Party
3rd Party	
DL	stack	A
1st
Party	DL	Stack
1st Party 3rd
Party
Blockchain Virtual	Machine Adapters
Smart	Contract-based	 UTXO	+	others
MiddlewareBase	Platform
3rd Party	DL	
stack	B…
3rd Party	DL	
stack	C…
…..
Industry	Solutions
Blockchain Resource	Provider
CryptoDelegate &	Cryptlet	architecture	(secure	containers,	attestation,	etc.)	
Professional	Services &	Support
Identity	&	
Key	Services
Crypto	
Services
ML	&	BI
Services
Distributed	
Ledger	
Gateway	
Services
26
We’vedeliveredanopen,broad,andflexible
cloudacrossthestack
Applications Management Clients
Web App Gallery
Dozens of .NET & PHP CMS and Web apps
Infrastructure Databases App	Frameworks
SQL Server
+Hundreds of community supported images on
VM Depot
Azure	BaaS
Hyper	Scale
Enterprise	Grade
Hybrid	
Microsoft	Azure	|	An	Open	Cloud
27
How	do	partners	get	started?
28
SIGN	UP	FOR	AN	AZURE	ACCOUNT
• https://azure.microsoft.com/en-us/solutions/blockchain/
SETUP	BLOCKCHAIN	NETWORK	ON	AZURE
• Create	your	custom	private/consortium	network
https://azure.microsoft.com/en-us/documentation/templates/
DEPLOY	DEV/TEST	BLOCKCHAIN	ENVIRONMENT	TO	LEARN
• Marketplace	Offerings:	https://azure.microsoft.com/en-
us/marketplace/?term=blockchain
• Azure	Quickstart Templates:
https://github.com/Azure/azure-quickstart-templates
How	do	you	
get	started?
START	BUILDING	OUT	SCENARIOS	AND	APPS
Develop	your	own	Smart	Contracts	and	Dapps using	Visual	Studio	
Solidity	Extension:	
https://visualstudiogallery.msdn.microsoft.com/96221853-33c4-4531-
bdd5-d2ea5acc4799/
29
Appendix
30
And	is	based	on	cryptographic	one-way	hash	functions
§ All	digital	media,	including	transactions	and	owners,	are	protected	via	digital	signatures	and hashes
§ Digital	signatures	and hashes are	created	by	cryptographic	one-way	hash	functions	(i.e.	mathematical	function	that	creates	a	unique	
output	based	on	specific	input with	no	way	of	deriving	the	input	from	the	output)
§ Digital	signatures and	hashes	allow	blockchains to	remain	secure	while	being	distributed
Digital	signature	
0x23e423s3234…
Cryptographic	One-Way	
Hash
Product	serial	number	+	
manufacturer
31
Each	transaction	has	a	unique	digital	signature
§ At	the	core	of	a	blockchain is	the	ledger,	which	represents	the	history	of	transaction	data
§ A	transaction	is	an	exchange	of	a	digital	asset	from	one	account	to	another
§ Transactions	between	parties	are	broadcast	to	the	blockchain network.	Those	transactions	are	then	appended	to	the	ledger
§ Each	transaction	message,	in	addition	to	the	digital	asset	and	the	accounts,	has	a	unique	digital	signature,	which	ensures	the	
authenticity	of	the	message	and	that	it	originated	from	the	right	account
§ Private	keys	are	used	to	create	signatures	while	public	keys	are	used	to	verify	signatures	
§ The	unique	digital	signature	ensures	no	node	within	the	blockchain can	modify	the	transaction	message
32
Blockchains create	a	transaction	chain	that	maintains	the	history	of	ownership	of	an	asset
§ The	ledger	itself	does	not	keep	track	of	digital	asset	account	balances,	it	simply	records	transactions
§ Instead	of	balances,	ownership	of	digital	assets	is	verified	by	links	to	previous	transactions,	using	the	immutable	history	inherently	
available	in	a	blockchain	solution	
§ For	example.	For	Alex	to	send	$500	to	Katie,	he	must	reference	previous	transactions	where	he	has	received	$500	or	more	to	prove
that	he,	indeed,	has	that	much	money	to	send.	These	reference	transactions	are	called	previous	input	transactions.	The	current	
transaction(s)	is	called	output	transaction(s)
§ Validity	of	each	transaction	is	based	on	the	validity	of	previous	transactions,	which	is	shared.
FROM TO PROPERTY VALUE
Alex Katie Payment $500
Transaction
From:	Alex	(0xf5e…)
To:	Katie (0x992…)
Amount: 500
Inputs:	0x56e…,	
0x987…
Digital	signature	
0x23e423s3234…
Transaction
From:	Garth	(0xas2…)
To:	Alex	(0xf5e…)
Amount: 200
Inputs:	0xtd6…,	
0xj7d…
Digital	signature	0x56e…
Transaction
From:	Sally	(0xkj5…)
To:	Alex	(0xf5e…)
Amount: 300
Inputs:	0xkf7…,	
0x9dh…
Digital	signature	0x987…
Previous transactions
Current transaction
33
Transactions	are	connected	within	a	chain	of	blocks
§ Transactions	are	grouped	together	in	blocks.	These	blocks	represent	the	order	of	transactions
§ Blocks	are	linked	to	previous	blocks,	which	make	the	blockchain
§ The	transaction	chain	tracks	how	ownership	changes,	while	the	block	chain	tracks	the	order	of	transactions
§ Transactions	within	the	same	block	are	considered	to	occur	at	the	same	time
Block	0	(0x23e…)
Transaction	1
Transaction	2
Transaction	3
Confirmed new block
Block	1	(0x5ef…)
Transaction	4
Transaction	5
Transaction	6
Previous	Block	
0x23e…
Block	1	(0x976…)
Transaction	7
Transaction	8
Transaction	9
Previous	Block	
0x5ef…
34
Consensus	is	used	to	add	blocks	to	the	blockchain
§ Transactions	not	yet	placed	in	blocks	are	called	unconfirmed	or	unordered	transactions
§ Blockchain uses	a	consensus	mechanism	to	determine	the	next	block.	This	consensus	mechanism	ensures	trust	and	accountability	
instead	of	a	middleman
§ There	are	several	types	of	consensus	mechanisms,	such	as	Proof	of	Work	and	Proof	of	Stake	
₋ The	act	of	producing	a	proof	is	called	mining
§ Proof	of	Work	is	used	in	Blockchain 1.0.	It	relies	on	the	difficulty	of	solving	a	mathematical	problem.	Producing	a	proof	of	work	can	
be	a	random	process	with	low	probability	so	that	a	lot	of	trial	and	error	is	needed	before	coming	to	a	solution
§ Proof	of	Stake	is	used	in	Blockchain 2.0	and	is	an	alternative	to	Proof	of	Work.	Instead	of	relying	on	power-intensive	work,	Proof	of	
Stake	relies	on	ownership	of	digital	asset.	In	other	words,	a	node	owning	1%	of	digital	assets	can	mine	1%	of	the	blocks	
§ Once	transactions	are	confirmed	via	a	consensus	mechanism,	the	information	is	stored	in	a	new	block
35
Build	enterprise-ready	blockchain	middleware
HealthcareRetail	&	CPG GovernmentDiscrete	
Manufacturing
Banking,	
Capital	
Markets
Media
Distributed	Ledger	Stacks
Azure
Horizontal SaaS	&	Adapters
3rd	
Party
3rd
Party
3rd Party	
DL	stack	A
1st
Party	DL	Stack
1st Party 3rd
Party
Blockchain Virtual	Machine Adapters
Smart	Contract-based	 UTXO-based or	other
Middleware	TierBase	Platform	Tier
3rd Party	DL	
stack	B…
3rd Party	DL	
stack	C…
…..
Industry	Solutions
Blockchain Resource	Provider
CryptoDelegate	and	Cryptlet	architecture	(secure	containers,	attestation,	etc.)	
Professional	Services &	Support
Identity	&	Key	
Services
Crypto	
Services
ML	&	BI
Services
Distributed	
Ledger	
Gateway	
Services
§ The	Blockchain Middleware	will	provide	core	services,	
which	will	help	users	create	and	build	on	top	of	
blockchains within	Azure
§ The	core	services	can	be	broken	down	into	the	
following:
₋ Identity	and	Certificate	Services	– Helps	with	
authentication,	authorization,	access,	and	lifecycle	
management.	
₋ Encryption	Services	– Provides	encryption	for	
blockchain transactions	and	fields
₋ Cryptlet Services	– Provides	runtime	for	cryptlets
and	communication	between	blockchain and	
cryptlet trusted	host
₋ Blockchain Gateway	Services	– Provides	
communication	between	multiple	blockchains
₋ Data	Services	– Rich	data	services,	such	as	
analytics,	auditing,	and	machine	learning	
₋ Management	and	Operations	– Tools	for	
deployment	and	management

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