‘Blockchain is Above Generic Ransomware Attacks’

Ransomware attacks and Blockchain have been in the news lately and are hot topics at industry forums. Blockchains are known to offer watertight security because they are totally different than conventional file systems. Yet Blockchain projects are still in the Proof of Concept stage and we see few production systems in India. BW CIO World spoke to Jitan S Chandanani - Blockchain Leader, Global Business Services, IBM India / South Asia to understand the extent of Blockchain adoption in India. Jitan also explains why Blockchain is so secure and beyond a ransomware attack.

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Photo Credit : IBM,

Jitan S Chandanani - Blockchain Leader, Global Business Services, IBM India / South Asia

Ransomware attacks and Blockchain have been in the news lately and are hot topics at industry forums. Blockchains are known to offer watertight security because they are totally different than conventional file systems. Yet Blockchain projects are still in the Proof of Concept stage and we see few production systems in India.

BW CIO World spoke to Jitan S Chandanani - Blockchain Leader, Global Business Services, IBM India / South Asia to understand the extent of Blockchain adoption in India. Jitan also explains why Blockchain is so secure and beyond a ransomware attack.

BW: What are you observing in the way Blockchain technologies are being adopted across industries in India?

Jitan S Chandanani: Between the end of last year and beginning of this year, most of the conversation was around PoCs (Proof of Concept). Most of the use cases that were talked about were very simplistic stuff. We didn’t need to automate the entire process with blockchain; we just needed to introduce blockchain into some elements for a successful PoC. In the last six months, the education level is much clearer where, we are beyond the PoC. In last three and half months the discussions are focused around Production Systems.

The leaders are the banks. The favourite use cases are supply chain finance, which is invoice discounting. That’s come up not just from a blockchain need, but also from the way the market is shaping up. There   is a whole Make in India movement which requires more manufacturers and businesses to grow, who always need credit. The last few surveys showed that the MSMEs have about a 60 percent gap in credit. The supply finance business was one which has somehow not taken off for the banks; because of old school tactics, also in some cases some regulations -- and blockchain has become a savior. You can say that the banks were initiating it, but a supply chain finance solution is going to hit industrial. Because in the end my clients will be manufacturing firms, it is going to be suppliers; this might apply to any sector. It may probably have started off in the banks but the impact is across the economy.

For other sectors, adoption is slow. There is adoption in terms of telecom where regulators are really thinking about blockchain for some of the major processes required to provide a stock to each other or there are processes in procurement, invoicing, account receivables. That’s the conversation we have been having and those are currently in the PoC phase. So probably three to six months you will see production implementation.

BW: What about sectors like Government and Manufacturing?

Jitan S Chandanani: Government is a front runner. In fact Telangana, AP, Rajasthan are actually leading the charge for blockchain. For a government, the motive is to improve citizen welfare and experience, so when they think of a blockchain use case, it has to be a use case where I could bring a business ecosystem for an overall benefit of the citizen. Coming across such a use case is difficult to find, but adoption is a lot. Things like land, vehicle and citizen registry; things like distribution of welfare services etc. Those are use cases where these governments are actively working on. There has been a major program, where Chandrababu Naidu launched the Vizag Fintech tower. They are moving quite aggressively, but these use cases will take some time, just because the extent and magnitude is so large. You would probably hear about them again in the next three to six months; but they are work in progress.

Central agencies like RBI and SEBI are initiating studies to understand blockchain, but that is all in the education phase.

BW: Today, businesses face severe threats from ransomware and new malware. How can blockchain as a service protect against these threats? 

Jitan S Chandanani: Typically, most of the ransomware are spread by simple business users who download something in their particular system, which is then replicated and spread through the entire network.

With blockchain you actually have an entire network running on a cloud. Access to this particular cloud network is actually controlled cryptographically at multiple stack levels. I have actually secured cryptography at the application level, from where you enter the information; when a user is entering information, he is processing the transaction on my cloud. It’s not that he is uploading a file or data or a virus to my particular system. It’s basically a digital file, it is executing a particular transaction, which then gets distributed to the participants of the network. As a result, the actual initiation of the transaction that is happening in the cloud, the execution and code replication is also happening among the nodes on the cloud. I am not getting any external Internet data services directly linking onto my blockchain data, which is what ransomware did. It gets into your computer and then uses your network. Over here you are executing in somebody else's network.

I can’t stop anyone from uploading a file (on the cloud). The files that are getting uploaded in blockchain are not actually stored in the same network; it is on a blockchain network. The data and the attachment actually have a separate container altogether. The cryptographic hash of that particular data gets fed to the ledger. That means, my files could be corrupted or might have contaminated data, but I am not using the file to distribute among the network. I am just using the hash in the signature of the file. Overall my ledger data does not get contaminated.

In the IBM setup, we actually have secure containers for some of the blockchain private networks. Even if you are the admin, you can’t just log in; you actually just come into specific APIs which your system is supposedly to be coded into. IBM HSBN (High Security Business Network) offers secure service containers, so there is only privileged access to specific APIs, and it keeps the information secure. Things like privacy and generic ransomware attack --  I think blockchain is above that. Even if somebody taps into a network and gets my blockchain data it will be gibberish. Unless you have the right access, you will just not be able to make any sense out of that. This makes blockchain easier for transaction information across the different participants and that’s how we are doing it.

BW: What Blockchain solutions do you offer? Can you give us some scenarios how business in India or abroad are using it?

Jitan S Chandanani: IBM has the complete stack of blockchain. You need the underlying cloud, which IBM has, then you need a fabric on top, which for us the preference is Hyperledger. On top of that you require a platform where we have Bluemix and on top we have the overall blockchain business logic or the code of particular business logic. Then the UI that you require on top. Within IBM we have all these components.


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