Everything you should know about Enterprise Blockchain
According to one study, it is found that the use of blockchain within the enterprise will really change the workings in the near terms. Companies like IBM are working with hundreds of enterprises to help in implementing the blockchain technology. Few reasons why enterprises are interested in implementing blockchain are-
- · Reduction in the cost and time for the transaction
- Improves product and system security
- Reduction on fraud
- Increase the transparency
- Increase the customer loyalty
These are further sub-divided into a horizontal application and vertical-specific.
- Horizontal Applications Include- Supply chain management, process verification, data sharing, and product life-cycle
- Vertical specific application includes- Cross-border trades, personal health record, virtual clinical trials.
The major concern for enterprises is to keep the privacy and security of data for long. They are highly protective in their business process and should be only visible to authorized users. In the last few years, since blockchain came to the role, enterprises have started adopting the technology for long-term data security.
Many enterprises today handle hundreds and thousands of business transactions, and keeping a tab on every transaction is a task. This also creates concern about creating large blockchain networks helping to provide sub-second transaction latency.
What is blockchain?
The concept behind blockchain is -
It is an online platform where continuously growing records are stored and linked to each other using various methods of cryptography. Hereby block, we mean a list of records. Each block contains a cryptographic hash of the block before, a timestamp and the transaction data. It records transactions between two entities in a permanent way which is further processed for verification. After completion of a recording a transaction the data in the block cannot be altered independently, without the altering all subsequent blocks. Blockchain is actually a Distributed Ledger Technology (DLT) to store data within the distributed ledger. Enterprises can enter the data in the ledger as blocks of data. These blocks are later linked together by storing hashed data from the preceding block.
One very crucial advantage provided by the blockchain to the business world is that it requires not a single individual on either side of the transaction and also no central authority is required to authenticate the transactions.
What do you mean by enterprise blockchain?
There is a myth regarding blockchain that- it is used only in the fields of cryptocurrency, which is not completely true. Even the corporate world is taking into consideration applications of blockchain with the motive of integration and expansion. This is known as the enterprise blockchain.
Now the question is- what kind of blockchains should the companies look forward to fulfilling their objective?
There are basically two types of blockchain that companies can look onto-
1. Public blockchains-
These are the basic blockchains that we know about. These are practically open ecosystems, which means that anyone can take part in this. Moreover, it has got in itself built-in mechanism which acknowledges participants with rewards for being a thorough participant of the system. But this is not very handy for enterprise blockchains. Basically, it is not very logical to use it for enterprise blockchains. This is because of the following reasons- First and foremost the space of the blocks is quite not enough to carry out transactions that the enterprise requires. Then there comes the issue of throughput and latency or idleness.
Well established enterprises demand millions of transactions per day with 0 amount of latency. But with public blockchain, there can be maximum 8 transactions per second with ten mins of block confirmation for each transaction. It also requires a huge amount of power for computation. Most importantly this concept is highly unsafe. This is so because as said earlier public blockchains is open to all and thereby can be accessed by any participant, even if he/she is not a part of the company.
2. Private blockchains-
Contradictory to public blockchains private Blockchains are not open to all. In order to participate one needs to acquire permission. Due to this, there are a lot of restrictions regarding who all can participate in the blockchain. Existing participants and regulated authority can only give access to new participants. Also, a participating entity can also work for network requirements and maintenance. This type of blockchains is especially worked out to fulfil the needs and motive of the enterprises. Few features of this type of blockchain are making it the most useful.
i) Efficient performance- as mentioned earlier that enterprises witnesses a lot of transaction per day, private blockchains allow this to happen with no latency. It smoothly differentiates various tasks. It also practises parallelisation and uses asynchronous flows.
ii) Flexibility- it is very natural that there may be various failures. But these blockchains must keep the potentiality to come back from the situation.
iii) Security- No need to mention that security is a huge issue for enterprise blockchains. In case of private systems, no intruder can cause harm because only permitted entities are allowed in the system.
Examples of various companies that practice enterprise blockchains- Many financial institutions like RBC, Citibank and many more practices blockchain. Other than these Volkswagen Financial Services and Renault are some companies that keep on implementing the blockchain principles.
Major Blockchain platforms-
There are 7 different enterprise blockchain platforms. Some of these are:
- 1) Ethereum-
Ethereum is a platform that makes it possible for any developer to write and distribute next-generation decentralized applications.”
Vitalik Buterin, Co-Founder, Ethereum
This was founded by Vitalik Buterin 22-year-old Russian-Canadian Ethereum can be described as one the many efficiently functioning blockchain platforms which are available today. Its flexibility, strength, functionality of smart contracting makes it so much popular and thus widely used. It also has the highest no. of use-cases. It has also developed a major community for online support and also has frequent updates.
- 2) Hyperledger Fabric-
As new technology develops, there is a call for standards. Participants want to focus on time and effort and investment to build solutions versus worrying about the framework. This is the rationale for open standards…we are pulling together the most exciting portfolio with a multi-lateral developer and vendor community. It’s similar to the benefits that Linux brought to the world of operating systems.”
-Brian Behlendorf, Executive Director, Hyperledge
Hyperledger is a product of Linux Foundation and was launched in 2016. This is an effort to take forward industry’s technologies. The main motive behind this is to generate distributed ledger that can be utilised by the enterprises. Hyperledger is popular among 180 and more corporates across every sphere including banking, finance and Internet of Things. It may be described as the best blockchain outline for enterprise solutions, considering its modular kind of architecture allowing plug-and-play mechanisms around consensus services.
- 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 Corda is nothing but an association of some of the huge financial institutions that have initiated a shared connecting platform called Corda. It was basically developed for banking institutions but is also used in other cases for example healthcare, finance etc. There is no specific token for Corda, and as it is a private blockchain as it restricts access to data within the system to only a few specific entities that are willingly a part of it.
- 4) Ripple-
Global payments are undeniably going through a sea change, led by financial institutions adopting blockchain to fix their customers’ broken payments experience. Now more than 100 financial institutions are looking to Ripple as the solution to the problem…”
Brad Garlinghouse, CEO of Ripple
Founded in 2012, Ripple was not the original name. It was renamed from Opencoin in the year 2015. Its main objective is to bring together banks, and other financial corporates by means of RippleNet. Moreover, this is without any chargebacks. It owns 100+ customers with 75+ clients in different areas of commercial deployment.
J.P. Morgan has long used open source software and we are excited to have this opportunity to give back to the community. Quorum is a collaborative effort and we look forward to partnering with technologists around the world to advance the state of the art for distributed ledger technology.”
Lori Beer, CIO, J.P. Morgan Corporate and Investment Bank
Created by New York’s biggest bank J.P Morgan, the main idea behind designing Quorum is to handle cases which require high-quality throughput the function of the processing of transactions which are private on nature. This also requires a permission group of participants. Also, Quorum is used to develop as well as evolve along with Ethereum. This modifies Ethereum’s core slightly, as a result of which Quorum will be able to include most of the Ethereum updates quickly.
Quorum is a permission blockchain developed specifically for enterprise use cases. It operates in a trusted mode and uses a simpler consensus protocol.
Key customers include-
· FinTech- National Bank of Canada, Legg Mason and others
· Pharmaceuticals: Pfizer and Genetech
- 6) VechainThor:
This permission enterprise blockchain enterprise was created for supply chain management, because of its focus in supply management. VeChainThor also manufactured RFID and NFC chips to use on tracking products through the supply chain. These chips are designed to hold private keys and public key pair. Today, this platform has broadened its applicability and work with other enterprises scenarios.
In other words, VechainThor uses solidity smart contracts, the Ethereum Virtual Machine (EVM) and Ethereum Data Store. The best thing is it employs cryptocurrency in its token.
VechainThor carries many features which include-
- · Permission Access
- · Access Control
- · Identity Management
- 7) Hedera Hashgraph-
Developed by Swirlds, Hedera Hashgraph is a DLT having features to configure with public or private. The public version is free, but the private is available under paid license. This platform contains a number of features like- Governing council of 39 leading organization, direct acrylic graph, native cryptocurrency and patented platform that cannot be forked by the community. This platform uses smart contracts making it able to tap into the broader community.
To conclude we can say that enterprise blockchains has just started conquering and will run for a long period. More companies will come with the motive of implementing this. But for that huge amount of testing is required to bring out whatever the best it has within itself. There is no doubt that enterprise blockchain is set to be a revolution. Today, there are thousands of enterprises adopting blockchain for a smooth functioning of the business. However, companies have to be clear in terms of implications and use.