Comparison of enterprise blockchains
Comparison of Enterprise Blockchains Ethereum, Hyperledger Fabric, and R3 Corda:
In 2017, companies, communities, and governments world over started to realize the potential of blockchain, outside of its famous applications Bitcoin and Ethereum. Many companies have done proof of concepts (PoCs), many governments are exploring blockchain, and while earlier it was the Financial Technology (FinTech) companies that were the most interested in blockchain, now the interest has picked up across the board.
However, it’s crucial to understand that for blockchain to see wider adoption, then the focus needs to be on enterprise blockchain also, and not only on public blockchains, the kind that powers your Bitcoin. Since enterprise blockchains have different use cases than the public blockchains, the design principles vary. Even within enterprise blockchains, specific use cases require different kinds of blockchain, and hence we have different enterprise blockchains, for e.g. Ethereum Enterprise blockchain, Hyperledger Fabric, and R3 Corda.
How enterprise blockchain differs from public blockchain, and key design principles of enterprise blockchains:
The characteristics that distinguish enterprise blockchains from their public counterparts are as following:
- Public blockchains are open to all, including anonymous users. For e.g. anyone can join the Bitcoin blockchain. However, enterprise blockchains must have nodes from one or more trusted organization, because companies can’t open their confidential information to anonymous outsiders.
- Public blockchains are typically permission-less, and allows equal access and authority to all nodes, however, enterprise blockchains need to be permissioned, and the permission will need to be role-based.
- Enterprise blockchains must deliver high performance, and can’t satisfy their stakeholders with 7 transactions per second which Bitcoin allows. Public blockchains, for e.g. the ones underpinning Bitcoin or Ethereum cryptocurrencies, rely on proof of work (POW) consensus algorithm, and miners need to produce POW before creating new blocks, after they complete very significant number-crunching operations at high speed. Enterprise blockchains need to find better consensus algorithm, to deliver significantly higher number of transactions per second.
The design principles for enterprise blockchains are broadly the following:
- Performance & scalability: Enterprises often deliver 100,000 transactions per second, and the enterprise blockchain must perform to that level. Besides, while there may only be a few nodes during the PoC stage, the production system will need to have thousands of nodes, and the enterprise blockchain must have a suitable onboarding process.
- Resilience: Enterprise blockchains will need to include redundancy, and should have automated monitoring, alert and recovery mechanisms that will minimize or eliminate manual intervention.
- Security and confidentiality: Enterprise blockchains need to restrict transaction and ledger access based on the roles, and need data encryption for both in-transit and at-rest data. It should also be able to utilize the organizations existing identity validation protocols.
- Supportability: assembling, hardening and supporting the blockchain infrastructural and network components is vital for enterprise blockchains.
- Integration: Enterprise blockchains will need to interact with the systems of record (SORs) within the enterprise, for e.g. core banking, supply chain management or enterprise resource planning (ERP), and application programming interfaces (APIs) must be ready before the integration with blockchain starts.
Comparison between Ethereum Enterprise blockchain, Hyperledger Fabric and R3 Corda:
Considering the above distinguishing characteristics and design principles, as well as the vision with which the given enterprise blockchain was designed, following is a comparison between three key enterprise blockchains:
- Hyperledger Fabric:This was conceptualized as an enterprise blockchain for any industry. Fabric is not for cryptocurrency mining, and it’s a permissioned blockchain. POW algorithm isn’t used for consensus. Consensus mechanism looks at entire transaction, while nodes have different roles and tasks. A ‘client’ node creates and invokes transaction. ‘Peer’ nodes maintain the ledger, receive ordered updates from ‘orderer’ nodes, and commit transactions into the leger. A specific type of peer nodes, called ‘endorsers’, validate authenticity of transactions.
- R3 Corda: This enterprise blockchain was created specifically for the financial services industry, and is designed to operate under considerable statutory regulations. Smart contracts, i.e. pieces of code designed to execute e legal function for e.g. taking control of an entity, are used here, like in any other blockchain, but with a difference. Smart contracts in R3 Corda have specific legal expressions to give them the necessary legitimacy. R3 Corda, like Fabric, is a permissioned blockchain, divides nodes into specific roles and assigns appropriate tasks. There is no POW consensus algorithm and mining. Consensus mechanism required transaction validity and uniqueness. The smart contracts ensure validity, and the blockchain ensures that no other transaction can use input state of another transaction, thereby ensuring uniqueness. R3 Corda isn’t for cryptocurrency mining.
- Ethereum Enterprise blockchain:This can be used for any industries, also for any kind of applications and transactions. Ether is the built-in cryptocurrency; however, other cryptocurrencies can be created using this. Mutually distrusting and even anonymous nodes can be part of this blockchain, and all participants have equal access. Consensus mechanism is through mining and POW, and this has adverse impact on performance. Since the entire blockchain is visible to all nodes, applications that need higher degree of privacy won’t find this blockchain suitable.
The above comparison indicates that the enterprises should strategize appropriately about their business, what they want to use blockchain for, and what use they will have for blockchain in the future. This will help them in spelling out their privacy, scalability and performance requirements, and then they can choose the appropriate enterprise blockchain.