Overview of blockchain technology and architecture

EY Global Blockchain
Summit
San Francisco, CA
April 26, 2017

EY Global Blockchain Summit
Overview of blockchain technology and infrastructure

Today’s agenda
1 Blockchain introduction: what is it and why it matters
2 Blockchain architecture: how it works and what it can do
3 EY’s value proposition

1: Blockchain introduction: what is it and why it matters

A blockchain is a shared ledger.
Shared ledger:
an account book of final entry in which
business transactions are recorded

A blockchain is an immutable database.
Immutable database:
a collection of information that is
organized so that it easily can be
accessed, managed and updated

A blockchain moves around data.
Transferring data:
information that has been translated into
a form that is more convenient to move
or process (e.g., bits)

A blockchain is secure.
Secure:
preventing unauthorized access, use,
disclosure, disruption, modification,
inspection, recording or destruction of
information

Putting it all together.
Shared ledger Immutable database Transferring data Securelyand for very
10101
01010
10101

2: Blockchain architecture: how it works and what it can do

Blockchains come in many shapes and sizes.
Public blockchains Permissioned blockchains
e.g., intranet
Read and write
access open to
everyone
Read and write
access
permissioned to
involved parties
e.g., internet
► bitcoin
► Cash
► Monero
► ethereum
► Hyperledger
► Quorum
► Chain
► c-rda
► Monax
► ripple

Types of blockchain networks
Centralized Decentralized Distributed

Consensus mechanisms and immutability
Proof of work Byzantine fault toleranceProof of stake
$
Other

Transfer data using smart contracts
Transaction = any
exchange of
information and data
Verifiable Smart contracts

Security through cryptography
Public and private key
(who is transacting)
Network verification
(who can transact)
Provable, encrypted
exchange
(zero knowledge proof,
hierarchical keys, etc.)

Architecture summary
Who is participating?
Type of network
How are they coming to agreement?
Consensus mechanisms
What, plus how are they transacting?
Data transfer through smart contracts
What can they see and how is it secured?
Cryptographic elements

3: EY’s value proposition

EY’s blockchain framework
► The EY blockchain framework
describes in detail all aspects of a
production blockchain application.
► The design principles of this
technology stack make certain that:
► Solutions align with enterprise
processes
► Implementation is secure and protects
confidential client information
► Solutions can be built in a modular
and scalable way
Data orchestration
Blockchain services
Business services
Web
services
External data systems
Client services
Digital
contract
Fulfillment
notification
Digital
invoice
Payments
Information system
Smart contracts
Security
User interface Mobile
Consensus
External services

EY’s blockchain platforms
► Flexible platform prototypes are
designed to accelerate development
and enable a vertical of business
applications
Identity Reconciliation
Platforms
Administration
Applications
Blockchain
Identity Reconciliation

EY’s smart contract library
► EY has developed a library of
smart contract components that
allow applications to execute
contracts; make decisions; store
data; and send ether, tokens and
data to other addresses on the
network.
Components Description
Contract The contract is the basic structure of solidity. It is a
prototype of an object that lives on the blockchain.
Variables Public state variables and storage variables are used to
store data.
Functions Functions are the abilities that a contract possesses and
the attributes that users can call to interact with the
contract.
Modifiers Modifiers are used to change the behavior of functions.
Events An event alert addresses when an action has been
performed.

Connection
management services
Peer connection
service
Predix PaaS
Management service
Client data services
API services
Contract and
transaction service
Identity management module
Contact/User registration module
Membership service
manager
Chain code manager
Ledger query manager
Digital contract module
Fulfillment notification module
Digital invoice module
Payment module
Other information module
Consensus
management service
Ledger storage
service
Messaging module
Dispute management module
Tracking module
Analytics module
Message bus
Message
queue
services
Federated access
services
Client wrapper External services
OBC event
stream
Client services
Delivery users Internal users Service consumer users Service provider users
Shipment and arrival
clients or devices
Service provider thin clients
(powered by Angular/Node)
Audit and approval clients
Administration clients
Blockchain services
Business services
Web services
Federation tier Database tier
Data orchestration layer
Metadata
User data stores Stream data stores Cold storage
Time stamp server
Security services
Shipment and arrival
clients or devices
User interfaceMobile
Example: enterprise production architecture
Web application
interface
Producer
data flow
OBC module
interface
Consumer data
flow
Data writes to
stores
User-facing
application
Custom blockchain
service
Business logic
module
Data sourcing and
storage serviceKey:

Blockchain application stack
Front-end JS
Returned ABI
Blockchain network
(public or private)
Blockchain
test network
Node
Node
Node
Contract address
Interface module
Distributed data store
ASYNC
node
balancer
Private
network
addresses
web3
User address
Contract compiler
Blockchain node
Identity and access
management
contract lookup
web3
Contract calls
Contract address
API services
Integrated Internet
of Things
Cryptographic
validation
Distributed SSL
certification
User
key store

User experience (UX) capabilities
► UX is integral to our blockchain
services.
► We’ve developed goals and metrics for
helping clients implement user-friendly
systems.
Goals Metrics
Performance
improvement
► Reduced number of user errors
► Increased ease of use
► Increased initial adoption
► Increased ease of learning
Increased
exposure
► Increase number of new users
Improved
credibility
► Increased user satisfaction
► Increased trust in the system
► Reduced development costs plus time
► Reduced maintenance costs
Reduced
resource burden
► Reduced design costs
► Decreased support costs
► Reduced training needs

Example: identity solution

Cross-service-line collaboration
► EY leverages the global capabilities of
its deep subject-matter resources
across established sectors and service
lines and combines it with FinTech
start-up capabilities.
► Blockchain trainings are service-line
agnostic so learning efforts impact the
entire organization.
► In-house
developers
► In-house
entrepreneurs
► Network of external
entrepreneurs
► Innovation lab with
latest technologies
► UX and user
interface
designers
► Banking and
payments
► Capital markets
► Wealth and asset
management
► Insurance
► Regulatory and
compliance
Distributed
Infrastructure
Services
Suits Jeans

Cross-technology capabilities
Digital
Artificial
intelligence
and cognitive
Process
automation
Cloud
transformation Cybersecurity FinTech Blockchain
Next 18 months Within five years
Next-gen
data
User-
centric
design
Robotics
Predictive
analytics
Advanced
data
analytics
Infrastructure
as a service
Security and
compliance
assessments
Distributed
ledger
apps.
FinTech
ecosystem
Academic
ecosystem
Omnichannel
experience
Distributed
authority
Cognitive
automation
360°
customer
experience
Blockchain
for Internet
of Things
ecosystem
Union –
fraud,
privacy,
physical
security
Social
media
integrated
cloud
Innovation
LabsDevelopment
operations
CI/CD
Enterprise
robotics
Cyber
fusion
centers
VC
financing
Unstructured
data
Smart data
Self-
service
business
intelligence
Stochastic
optimization
FinTech
platform
market
Business
process
management
Digital
enablers –
smart
forms, ICR,
chat bots
Integrated
cyber risk
monitoring
and
modelling
strategy
IOT-
embedded
cyber
security
Platform enterprise
Cyber
resiliency
Public
blockchain
and crypto
currency
Unstructured
data
Industrial
Internet of
Things
data
Identity
data/
smart data
Connected
devices
and
equipment
data
Real-time
technology
infrastructure
Vertical
automation,
e.g., call
centers
User
research
and
insights
VR and AR-
based
engagement
Current state

Key contact
Michael Maloney
Distributed Infrastructure and Blockchain
Technology Manager, Financial Services,
Ernst & Young LLP United States
+1 212 773 7280
michael.maloney@ey.com

Appendix

Protocol EY PoC
EY
framework EY testnet
Governing
body License Token
Transaction
type
Smart
contracts Consensus
Public/
private
Account
confidentiality
Transaction
confidentiality
Bitcoin Yes Yes Yes N/A Free (MIT) BTC UTXO model
Transaction
Returns
SegWit
(RootStock)
PoW Public Pseudo No
Ethereum Yes Yes Yes
Ethereum
Foundation
Free (MIT) ETH
Account
state model
Solidity,
Serpent, OP
PoW –> PoS Both Pseudo No
Hyperledger
Fabric
Yes Yes Yes Hyperledger Free (Apache) N/A
UTXO and
key value
Chain Code
(Java, GO)
PBFT Private Hierarchical Yes
Chain Core Yes Yes Yes Chain Free (GNU) N/A UTXO model Ivy Federated Private Hierarchical Yes**
Eris Yes Yes Yes Monax Free (GNU) N/A
Account
state model
Solidity Tendermint Private Pseudo No
Ripple No Yes Yes Ripple Labs Free (GNU) XRP UTXO model Codius
Ripple
Consensus
Public Pseudo No
Multichain Yes Yes Yes Coin Sciences Free (GPLv3) User defined UTXO model
Transaction
metadata
Federated
Stochastic
Private Pseudo Yes
Quorum Yes Yes Yes JP Morgan Free (GPLv3) ETH*
Account
state model
Solidity PBFT* Private Pseudo Yes
Corda Yes Yes Yes R3 Free (Apache) N/A**
Account
state model
Kotlin, Java
Federated
Notary
Private Hierarchical Yes
EY has direct experience with most of the prominent technologies in the blockchain space, putting us in a strong position to provide detailed comparisons between protocols.
EY will provide detailed comparisons for the protocols listed below, as well as any new protocols released that are deemed worthwhile.
* Can be changed in deployment ** Development underway to introduce feature
Distributed ledger protocol matrix

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or more, of the member firms of Ernst & Young Global Limited,
each of which is a separate legal entity. Ernst & Young
Global Limited, a UK company limited by guarantee, does not
provide services to clients. For more information about our
organization, please visit ey.com.
© 2017 EYGM Limited.
All Rights Reserved.
EYG no. 04033-173GBL
1705-2288253
ED None
This material has been prepared for general informational purposes
only and is not intended to be relied upon as accounting, tax or other
professional advice. Please refer to your advisors for specific advice.
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Overview of blockchain technology and architecture

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