For blockchain technology, we’ve come a long way. Going from blockchain 1.0 and 2.0 to blockchain 3.0, and now, blockchain 4.0; a lot has happened over what seems like a hundred years (though it’s only been about a decade). The technology is already set on massive adoption, with its valuation projected to grow to $176 billion USD by 2025. While blockchain technology has advanced in functionality (and complexity) – no reference to cryptocurrency, now – and has been widely applied in quite a number of industries, the enterprise market has not been a bystander; big companies – financial institutions like JP Morgan and Goldman Sachs, automobile giants Volkswagen and Renault, payment company Visa among others – are making big moves to implement a working proof-of-concept (PoC) and have the edge over competitors.
Needless to say, the more popular blockchains are the public (or permissionless) blockchains, and that is (for the most part) because they are open networks which allow anyone to participate and they’re often incentivized. However, for a number of reasons, public blockchains (Bitcoin included) are basically unsuitable for enterprise adoption:
- Anyone can participate in public blockchains and coupled with the fact that they are loosely regulated, they attract malicious users and are favored by criminals.
- Majority of public blockchains do not have performance capabilities needed to run enterprise applications, particularly in terms of transaction processing rate and verification windows.
- Public blockchains have a small block size which could be insufficient for storing the large volume of data handled by enterprise applications.
Private (or permissioned) blockchains, on the other hand, are kind of “invitation only” (pun intended). They are simply not for anyone who wishes to participate; they require permission to participate, hence the name “permissioned.” For this sole reason, virtually all enterprise blockchains are private blockchains.
Our focus in this article is to examine five best blockchains with the potential (and best suited) to disrupt the enterprise market in coming years: Ethereum, Hyperledger Fabric, R3 Corda, Aergo, and Quorum.
Ethereum, simply put, is a decentralized blockchain platform that makes it possible for developers to build and easily deploy decentralized applications (dApps).
Created by co-founder Vitalik Buterin in late 2013, it can be best described as an upgrade (blockchain 2.0) to the Bitcoin blockchain, integrating cutting-edge smart contract functionality and offering more flexibility in terms of performance and scalability.
Ethereum, unlike Bitcoin, can be applied to virtually every industry that comes to mind, with a countless number of use cases; as a matter of fact, it has the most decentralized applications (1,932 as of 3rd October 2018), including the popular virtual cat-breeding game CryptoKitties.
So, how exactly does enterprise market stand to gain from Ethereum’s robustness?
The smart contracts functionality of the Ethereum blockchain will provide new ways for enterprises to improve workflow of a lot of processes and, as a result, eliminate the need for a third party. The heart of the Ethereum blockchain is the Ethereum Virtual Machine (EVM), a quasi-Turing complete virtual machine. The Ethereum VM enables developers to build robust enterprise solutions by creating very complex smart contracts written in Solidity; the smart contract code is then compiled into ’bytecode’ and executed by the EVM. Ethereum uses the proof-of-work consensus algorithm for verifying transactions, and this chosen consensus mechanism offers security.
To bolster enterprise adoption of Ethereum blockchain tech, the world’s largest open-source blockchain initiative, the Ethereum Enterprise Alliance (EEA) was created. The EEA is a non-profit organization consisting of over 250 members including Fortune 500 companies HP Enterprise, Accenture, JPMorgan, Microsoft among others.
While Ethereum has recorded a huge amount of success in its quest for widespread adoption, it is pertinent to note a few things:
- Ethereum, being a public blockchain, is fundamentally permissionless. Privacy issues cannot be overlooked; it is originally built for decentralization (which in itself is a good thing) as opposed to an “access-only” ecosystem. For enterprise solutions, this is a potentially major downside in enterprise use-cases.
- The proof-of-work (PoW) consensus mechanism relies heavily on mining and has some performance drawbacks. More than that, it is extremely energy-intensive, with a recent report showing that Bitcoin mining consumes more energy than 159 countries. However, there are plans to switch very soon from the PoW to a hybrid proof-of-stake algorithm (which uses validators instead of miners), known as Casper.
2. Hyperledger Fabric
Hyperledger, hosted by the Linux Foundation, is an open-source collaborative effort created to advance cross-industry blockchain technological solutions. It was founded in 2015, with the main focus being to foster development of open-source codebases and software for running enterprise blockchain networks.
The Hyperledger Project has over 185 collaborating members spread across various industries, such as finance, banking, supply chain management, Internet of Things (IoT) and manufacturing. Hyperledger Fabric is one of several blockchain projects developed within Hyperledger.
Hyperledger Fabric is a blockchain framework offering advanced functionality for enterprise-grade solutions. It is private and permissioned, and the members of a network enroll through a trusted Membership Service Provider (MSP). Being a framework, it offers quite a number of pluggable options – membership service providers and consensus algorithms can be freely changed. Ledger data can also be stored in multiple formats.
Smart contracts on Hyperledger Fabric are written in Chaincode, Hyperledger Fabric’s smart contract engine which makes it easier for developers – beginners and pros alike – to kickstart development of blockchain applications. Hyperledger Fabric currently supports Go, node.js, .NET (unofficially).
The latest release is v1.3.0 (as of October 3, 2018), with new features such as an “Identity Mixer” (which enables transactions to be conducted anonymously) and support for Java in Chaincode already introduced.
3. R3 Corda
“Corda has been developed to service the specific needs of financial services with generations of disparate legacy financial technology platforms that struggle to interoperate, causing inefficiencies, risk and spiraling costs.”
– David E. Rutter, Founder and CEO, R3
Launched in 2015, R3 is an enterprise blockchain firm leading a consortium of over 200 members which consists of some of the world’s prominent financial organizations. In 2016, R3 built Corda, an open-source distributed database platform specifically built for enterprise.
According to R3, Corda “enables institutions to transact directly using smart contracts, while ensuring the highest levels of privacy and security.” It has become popular because of it consensus system that focuses on shared facts, thereby eliminating the need for reconciliation (a cost-effective and time-saving process). Also, transaction data is only shared with participating nodes that require it, minimizing information leakage. known for providing interoperability, immutability and easy integration with legacy systems.
Corda’s innovative concept has been implemented in the banking, healthcare, trade finance, supply chain industries, with government organizations.
Corda Enterprise, the world’s first universally interoperable blockchain network, offers additional functionality to Corda open source for enterprise users such as:
- Support for Oracle and SQL Server database integration
- “First-ever” Blockchain Application Firewall designed to allow blockchain apps to ‘live’ behind a company’s firewall and still be able to interact with systems outside the network
- 24/7 support and predictable release schedules
- High availability and disaster recovery
Corda Enterprise is fully interoperable with Corda open source, and businesses can now choose between enterprise and open-source versions of Corda, as per their requirements.
AERGO has been described as an enterprise blockchain solution combining both private and public blockchains into an all-in-one platform. It comes with advanced functionality such as chain interoperability, ease of deployment and seamless integration into legacy systems.
On the AERGO platform, businesses can enjoy the flexibility they so much desire when building blockchain solutions.
AERGO aims to provide: “an advanced, accessible solution for software developers; a secure and fast blockchain cloud architecture that accommodates public and private chains, and; an open ecosystem for third parties and businesses to connect and engage with each other.”
An enterprise-ready decentralized blockchain, AERGO acts as a bridge between private and public blockchains using Coinstack. It uses ‘deterministic’ delegated proof-of-stake (DPoS) consensus algorithm, much better than mining-centric PoW, and this enables it to scale up and handle high-throughput transactions — up to 1,000,000 transactions per second.
Blockchain solutions are deployed to a secure cloud infrastructure over a distributed network. This helps to reduce the cost of hosting physical infrastructure needed to run blockchain networks and dApps.
The AERGO project integrates smart contracts functionality with AERGOSQL, a smart contract engine which uses a PL/SQL-like scripting language for secure data storage and management.
AERGO brings the best of both worlds (so to speak) to the enterprise market, making it possible for businesses to enjoy the possibilities of permissionless blockchains and still be able to keep the whole network in check by handling potential security and privacy issues with permissioned blockchains.
Quorum is an “enterprise-ready distributed ledger and smart contract platform” developed by J.P. Morgan on the Ethereum blockchain. Developed in 2015, it is designed for handling applications requiring high-speed and high-throughput transactions within a permissioned ecosystem.
Rather than the energy-intensive PoW consensus, Quorum uses vote-based QuorumChain, RAFT, or Istanbul BFT consensus algorithms. It is able to process dozens to hundreds of transactions per second, depending on network configuration.
It runs a slightly-modified version of Ethereum core; as such, it can seamlessly incorporate major updates to Ethereum.
Quorum is open-source and free to use. Like Ethereum, it is GPL/LGPL licensed.
The blockchain space has undergone a lot of improvement over the past couple of years, with innovative concepts and groundbreaking tech being introduced, and the number of new blockchain platforms on the drastic rise.
The journey to enterprise adoption of blockchain tech is still early. However, a lack of standards and interoperability could pose serious challenges to enterprises, especially as they try and upgrade from pilots and PoCs to real-world environments.
One thing’s sure, though: blockchains will continue to evolve. For blockchain technology, there are definitely still bigger things to come!
Top Five Blockchain 3.0 To Watch Out For In 2018 – CoinSutra. https://coinsutra.com/3rd-generation-blockchain/
Ethereum VM illustration – XBT.net. https://xbt.net/blog/ethereum-blog/what-is-an-ethereum-eth-virtual-machine-evm/
What are enterprise blockchains? – Blockgeeks. https://blockgeeks.com/guides/enterprise-blockchains/
Deloitte’s 2018 Outlook Highlights the Growth of Blockchain Technology – NASDAQ.com. https://www.nasdaq.com/article/deloittes-2018-outlook-highlights-the-growth-of-blockchain-technology-cm897934
Blockchain blocks size – Bitcoinity.org. https://data.bitcoinity.org/bitcoin/blocksize/30d?t=l
Bitcoin mining energy consumption – Powercompare. https://powercompare.co.uk/bitcoin/
State of the ÐApps — A List of 1,932 Projects Built on Ethereum. https://www.stateofthedapps.com/
AERGO project website – https://www.aergo.io