Enterprise Blockchains - A take on permissioned systems

At first glance, you would think that the blockchain ecosystem is everything that an enterprise is not – decentralized, transparent, open. However, permissioned blockchains can bring about unprecedented positive disruption for both the enterprise and the decentralized space. There are three essential features of enterprise blockchains:

 

High performance: Enterprise blockchains must have a high throughput.

High resilience: The blockchain network must be able to bounce back from service downtimes and potential outages.

High Privacy: Privacy and security are both vital requirements. All the nodes of the enterprise blockchain network should be carefully vetted.

 

Permissioned blockchains

 

The blockchains that everyone is familiar with are all public blockchains. For example, Bitcoin and Ethereum are open to everyone. You can download a copy of the underlying blockchain and become a part of the network. However, this can be highly impractical for enterprise blockchains because of the following reasons:

 

Public blockchains are notoriously slow and non-scalable.

Enterprise can’t function in an open environment. They need to fulfill confidentiality and compliance requirements to execute operations.

Public blockchains require resource-intensive consensus mechanisms like POW. This is highly impractical for enterprises.

 

This is why enterprises require a special class of blockchain called “permissioned blockchains.” In a permissioned blockchain, the individual nodes of the network are chosen via a careful vetting process. Access to the network is given by one of the following:

 

The existing members of the network

A consortium.

An authority figure.

 

Best Enterprise Blockchain Platforms

 

Let’s run through three of the most popular enterprise blockchain platforms:

 

R3 Corda.

Hyperledger.

Ethereum Enterprise.

 

#1 R3 Corda

 

 

R3 is a consortium of some of the biggest fintech firms in the world. Together, the consortium created a distributed ledger platform called “Corda.” When it first started, R3 had nine financial companies: Barclays, BBVA, Commonwealth Bank of Australia, Credit Suisse, Goldman Sachs, J.P. Morgan, Royal Bank of Scotland, State Street, and UBS. Currently, it has more than 300 participants. Some of the more notable names are – Bank of America, BNY Mellon, Citi, Commerzbank, Deutsche Bank, HSBC, Mitsubishi UFJ Financial Group, Morgan Stanley, National Australia Bank, Royal Bank of Canada, Skandinaviska Enskilda Banken, Société Générale, and Toronto-Dominion Bank.

 

R3 Corda has found utility in the finance space, along with supply chains, healthcare, and government. The core concepts behind Corda’s models:

 

Machine-readable contract codes govern an agreement between two or more parties.

All the transactions go through a life cycle.

Co-ordinate actions without the need for a central authority.

 

Corda Node Structure

 

 
The image above is the nodal architecture in Corda. Every single node has five main components:
 

A vault that stores past and current states. It also logs the transactions processed by the existing nodes.

A network interface to promote cross-node communication

RPC interface to communicate with the node owner.

Access and install “CorDapps” or Corda Dapps through a plug-in registry

A service hub that enables the Flows to call for services from other nodes or to access any relevant information.

 

What are CorDapps?

 

CorDapps are the decentralized applications that run on top of the Corda platform. It has the following key components:

 

States: All the parameters over which the agreement is reached has to be clearly defined.

Contracts: States the valid ledger update.

Services: Must provide utilities within the node.

Serialization Whitelists: This restricts the types your nodes will receive off the wire.

 

#2 Hyperledger Fabric

 

 

Hyperledger Fabric is one of most enterprise blockchain options out there. Fabric develops blockchain-based products, solutions, and applications aimed for use within private enterprises. Since these are simple plug-and-play solutions, integration with enterprise workflow is a breeze. Hyperledger Fabric’s permissioned architecture enables businesses to segregate confidential information and speed up transactions. Fabric 2.0 was released in January 2020 with faster transactions, updated smart contract technology, and streamlined data sharing.

 

 

How does Fabric work?

 

The framework is coded using Go. The smart contracts within Fabric are coded using “Chaincode.” Every peer of the network runs in Docker containers. To write Chaincode contracts, one must be well-versed in four main functions:

 

PutState: Create new asset or update existing one.

GetState: Retrieve asset.

GetHistoryForKey : Retrieve history of changes.

DelState: Delete the asset.

 

Modular Architecture

 

Fabric’s modular structure separates the transaction processing workflow into three different stages:

 

Chaincoded smart contracts for distributed logic processing

Transaction ordering.

Transaction validation and commitment.

 
This segregation is useful because:
 

It reduces the amount of trust-level and verifications required.

Improve network scalability.

Improve overall performance.

Readymade integration of various modules.

Easy reuse of existing features.

 

Enterprises like Walmart, Sony Global Education, Honeywell, etc. have worked with Hyperledger Fabric before. You can read these case studies here.

 

#3 Ethereum

 

 

The Enterprise Ethereum Alliance (EEA) is an organization that aims to drive the use of Ethereum blockchain technology in enterprises.

 

Why should Enterprises look into Ethereum?

 

Alright, so Ethereum is supposed to be a public blockchain, right? It has all the deficiencies that we have already discussed before. But, if that’s the case, then why should enterprises bother looking into it.

 

The fact is that Ethereum has the largest and most well-respected developer community in the space. Plus, it already has a significant number of usecases. Because of these reasons, Ethereum can be a good platform for enterprises to build on.

 

Who is in the Enterprise Ethereum Alliance?

 

The EEA members are an eclectic mix of large and established organizations in their respective industries as well as startups. There are currently over 200 members and some of the more well-known names include Microsoft, JP Morgan, Toyota, ING, British Petroleum, Wipro, etc.

 

What is the purpose of the Enterprise Ethereum Alliance?

 

>Become a governance and standards body for Ethereum’s enterprise applications. The EEA will design a framework for industry-wide governance and implementation of smart contracts with inputs from members. This makes the transference of real-world transactions onto a blockchain easier.

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Bring in real-world business use-cases to the Ethereum blockchain and improves its overall framework. Bring in new features and use-cases and help the chain evolve.

Ensure rapid technical innovation and enterprise-grade governance.

 

Conclusion

 

Enterprise blockchains are a critical component of the decentralized ecosystem. By bringing in institutions and large-scale organization, not only are we experiencing real-world value, but also taking blockchain adoption to a whole new level. Projects like R3 Corda, Hyperledger Fabric, and EEA will make the entry of these institutions considerably simpler and pain-free.