Posted by Blockchain has tremendous potential even if you didn’t invest in Bitcoin in 2009 (or ever since!). Today, we will help you get your grips on what a blockchain platform is and what technologies behind blockchain you need to be aware of.
blockchain network, accessIf you need help understanding the technical side of blockchain, today we will help (hopefully) answer a lot of your questions
What is Enterprise Blockchain?
An “enterprise blockchain” is different from a public blockchain like Bitcoin because it restricts who can see the data. It is a “permissioned blockchain” that businesses use to streamline large-scale business processes.
Today, most organizations – that don’t use a blockchain – maintain individual records because blind trust is not advisable when several billion dollars exchange hands globally. This is a massive data security risk.
These companies use some of the following processes to maintain the quality of this data:
- data stewardship
- standardization of data formats
- master data management
- security audits
An enterprise blockchain is like a database that no single user/company can control. A group of companies who wish to take advantage of blockchain’s benefits and certain third parties – that they frequently do business with – can access this database for read/write operations.
But they all have to agree that a new transaction is valid and verified before they can collectively save a record of this transaction on their respective systems. Once saved, this record is immutable – it cannot be changed by anyone. This provides a huge improvement in mutual trust over the current systems.
Also, all records are secured with the most secure encryption standards that are agreed upon by everyone in the consortium. Businesses that use a blockchain can do business without the worry of having to trust strangers across the globe.
As we’ll see later, business benefits of the blockchain extend to several spheres of the business including supply chain tracking, global payments settlement, and even prevention of corruption and fraud.
Building Blocks of Blockchain
To understand the core of blockchain, we must understand 2 key core concepts: P2P networks and distributed ledger technology (DLT).
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The blockchain network is the opposite of the traditional client-server networks. It is a peer-to-peer (P2P) network where all nodes hold copies of important data and can request more information from any other nodes. If you used torrents, you were using P2P client software to connect to a P2P network.
All information on the network resides in a database called the Ledger which is distributed across all network nodes. Hence, the name “Distributed Ledger”. There is no centralized server on a blockchain to manage this ledger and control access to it. Instead, all nodes must individually process and verify any new record on the network.
Refer to smart contracts and consensus mechanisms for a deep dive on how blockchain networks determine genuine, accurate, and legal transactions.Blockchain is an example of such a distributed ledger technology (DLT).
What are the business benefits of blockchain?
Blockchain brings forth a world of digitally-coded contracts. These contracts live in transparent, shared (peer-to-peer) databases (blockchains) where the data and transactions they govern have unique copies of these records (blocks). These databases prevent them from any revision, tampering, or deletion events by way of “consensus algorithms” which consult all nodes in the blockchain network. No event on a blockchain is finalized until it passes the consensus algorithm.
Here are the key business benefits of blockchain.
1. Trust where none exists
Unknown traders from different countries can’t immediately trust each other and find it hard to have an intermediary they can both trust.
2. Decentralized structure to enable quick fault recovery
Because blockchain records are stored across all peers in a network, that provides redundancy. It increases the strength of the network and makes dealing with faults much simpler.
3. Better security and privacy
Blockchain operations use the strongest encryption algorithms which are, computationally, very expensive to crack. Permission-controlled blockchains also let network participants control access to vulnerable data and resources.
4. Cost reduction
Blockchain eliminates middlemen that businesses would traditionally use to do the processing of transactions. No additional vendors and third-party providers mean lower costs for all traders on the blockchain.
5. Faster processes to fetch information
Fetching data from a Blockchain is faster than conventional or manual processes because there are no intermediaries. This is not always true but broad experts have drawn conclusions that indicate the faster retrieval speed on the blockchain.
6. Visibility and traceability on the supply chain
Blockchain records the movement of items on the supply chain within its immutable blocks for everyone to see. This helps vendors verify whether their purchased items – medicines, organic farm products, etc – are from the origin as their traders claim to be.
Types of Blockchain
Public Blockchain
This is an unrestricted, permission-less system that allows anyone to join its public blockchain network, access new and old records to verify transactions and add uneditable records to the ledger. However, they are large, slow to respond, and vulnerable to a “51% attack” when more than half of the nodes agree.
Private Blockchain
If the public blockchain is the internet, a private blockchain is an organization’s intranet. A controlling organization adds security rules, creates permission levels & authorizations, and controls accessibility while using the power of decentralization in a P2P network. Because of their limited size, they can run much faster.
Hybrid Blockchain
Sometimes, organizations create a hybrid blockchain to limit/control access to certain data while making other data public. Transactions are still uneditable and verified through smart contracts. These networks still use the basic principles of a distributed ledger on a P2P network and guarantee almost all benefits of an enterprise blockchain.
Consortium Blockchain
Unlike a single governing authority in hybrid blockchains, a consortium blockchain has a “federation” of governing organizations to provide greater transparency and trust. This limited group has certain special nodes to send/receive transactions – just like member nodes – with the additional responsibility for verifying transactions. Although this type provides the highest safety, trust, and scalability, the scope of transparency is still limited to special nodes within the controlling group.
Use cases of Enterprise Blockchain projects
The United Nations has connected 193 countries using blockchain-based initiatives. For example, it is distributing aid to Syrian refugees in Jordan using blockchain-verified iris scans. They have moved on from using ID cards which make their aid vulnerable to theft by local warlords.
Insurwave is a blockchain-based marine hull insurance platform. It provides real-time information to insurance agencies and insured parties. This information includes ship location, safety hazards, and the condition of various parts of the ship. Blockchain’s immutable records help provide reliable tracking for verified insurance calculations when ships enter a high-risk area.
Companies are using
- Blockchain identity management solutions
- Track and trace capabilities of the blockchain for the supply chain
- Blockchain as a single source of truth for the entire supply chain
- Unmatched transparency for stakeholders.
All this to say: Blockchain isn’t a rebel technology. Its booming phase is just getting started. There is one segment of business leaders who are still discovering use cases. There is another segment that has found a use-case and has a budget but is wondering where to start. They are not sure whether they should build it from scratch or use an existing plug-and-play solution.
The most popular Enterprise blockchain platforms
There are several enterprise blockchain platforms but this section will provide a brief overview of each of the more popular platforms.
Ethereum
Ethereum is a highly mature blockchain platform founded by Russian Vitalik Buterin. It is a permissionless platform meant for mass consumption and may not fit into traditionally private requirements of enterprise use cases. This is also not the fastest blockchain network and sucks a lot of energy.
Ethereum, an open-source platform, also has frequent product updates, enhancements, and a large online support community.
If you want to develop apps based on Ethereum, do check out Ethereum Enterprise Alliance (EEA). It is a non-profit organization that connects startups, academics, enterprises, and technology vendors with Ethereum subject matter experts.
Hyperledger Fabric
Hyperledger is an open-source collaborative framework for codebases and distributed ledger frameworks optimized for the enterprise.
There are 8 Hyperledger projects so far and Hyperledger Fabric is one of them. IBM and Digital Asset initially contributed to it. Its main claim to fame is its modular architecture which allows plug-and-play components for consensus and membership services.
R3 Corda
R3 Corda is a permissioned-blockchain that works without a cryptocurrency. Some of the world’s biggest financial institutions created Corda is an open-source blockchain platform that makes managing complex financial agreements easier. R3 is the name of their consortium.
R3 Corda is a permissioned-blockchain that works without a cryptocurrency. Some of the world’s biggest financial institutions created Corda is an open-source blockchain platform that makes managing complex financial agreements easier. R3 is the name of their consortium.
Ripple
RippleNet is a global blockchain that facilitates nearly-free transactions without chargebacks. It uses a cryptocurrency called “Ripples” or “XRP” for its transactions and is one of the faster blockchain networks out there.
For comparison, consider Bitcoin’s 3 to 6 transactions per hour and 1+ hour payment settlement period. In contrast, the XRP blockchain can support up to 1500 transactions per hour with a settlement period of about 4 seconds.
Quorum
Quorum blockchain modifies Ethereum’s code to achieve another open-source permissioned blockchain for a fixed group of participants. Instead of Proof-of-Work (PoW), Quorum uses vote-based and other consensus algorithms that make its faster transaction speed possible.
Blockchain-as-a-Service (BaaS)
Like a web host that manages the storage and other operations on your website, a BaaS platform will let you create, configure, and manage your own distributed blockchain apps.
BaaS platforms have become a catalyst in the faster worldwide adoption of blockchain.
Blockedge is an end-to-end blockchain transformation platform that
- helps you build and integrate blockchain applications into your business infrastructure
- deploy and manage elastic blockchains effortlessly,
It does so with the utmost importance to governance and data security.
Blockedge is part of a larger technology group SecureKloud Technologies that has over 13 years of experience in building cloud transformation solutions for some of the top fortune 500 companies. For a company like SecureKloud, whose roots are from delivering and simplifying cloud adoption, Blockchain is a natural evolution. With our expertise and experience in collaborating with cloud providers, we believe that we are the ideal partners for a company to explore multi-Cloud and multi-blockchain platform support for their transformation.
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Navin Navin is a freelance copywriter and content marketer who loves to translate technical content for humans, including how-to content, resource guides, glossary, and other helpful content to help users break into a technical niche. He plays Tennis & advocates for everyone’s positive mental health! |