Not all blockchains can be described as enterprise blockchains. However, both public (permissionless) and private (permissioned) blockchains can be enterprise blockchains.
By 2015, IBM, Microsoft, Accenture, JP Morgan, and other major technology companies and financial institutions had set up teams to research ways to innovate using blockchain applications. Soon they were launching their own, mostly private, blockchain enterprise solutions.
With the involvement of these major technology companies and financial institutions, the use of the phrase enterprise blockchain became popular.
Perhaps fortuitously, the word enterprise in this context came to imply the blockchains are permissioned and projects of major corporations or consortiums—enterprise blockchain companies. This is easily tied with the word's original meaning, which is that the technological solution is specifically designed to be used by businesses.
With this backdrop, it is easy for those who don't follow the blockchain evolution closely to believe that companies and institutions can only use permissioned or private blockchains. And that they should not even consider public (permissionless) blockchains.
Meanwhile, public blockchains offer some of the most robust enterprise blockchain solutions.
An enterprise blockchain is any blockchain that offers the capacity for institutions to automate their business processes and systems as well as improve how they verify, store and share data and value with others.
Indeed, whether a blockchain is public or private has little to do with whether it is a blockchain enterprise and therefore supports or offers solutions to businesses and institutions.
The major concern raised about using public blockchain is that data is on a public ledger, and therefore anybody can access it. However, one of the core features of public blockchains is cryptography, which makes users pseudonymous.
That often translates to data on the public blockchain being gibberish except to the intended users, who must use private keys to consume it.
The primary difference between an enterprise blockchain and the rest is the smart contract capability. Enterprise blockchains are designed with smart contract capability as a primary component.
Through the use of the smart contract application on the blockchain, an organization can automate processes and create systems. When choosing a blockchain to use, one has to consider the robustness of its smart contract application.
On the other hand, if a blockchain doesn't have a smart contract capability or if it does, it is so rigid that businesses cannot easily use it, then it is not an enterprise-grade blockchain. Bitcoin is an example of a blockchain that is not an enterprise blockchain.
Besides using it to receive, store and send digital assets, businesses can hardly build any applications and systems on top of it. With that stated, there are attempts to give the Bitcoin blockchain smart contract capability. The best known of these attempts is the RSK project.
There are different types of blockchains with smart contract capability and, therefore, can be used to improve systems of businesses and other organizations.
The following are the major categories of enterprise blockchains:
These are blockchains whose peer-to-peer networks anyone can join and leave without permission.
The Ethereum blockchain network is permissionless. If you want to join it right now as a staking node, light node, or full node, all you need to do is acquire the appropriate hardware, connect it to the internet and install it with the Ethereum core software.
You don't need to send an application to anyone or hope some admin somewhere approves your computer joining the network. It is permissionless because one does not need permission to join its network.
The list of permissionless enterprise blockchains includes the Casper Network, Cardano, and Polkadot. Meanwhile, Bitcoin, Litecoin, and Monero are public blockchains that don't have an elaborate smart contract capability that businesses and institutions can use.
A permissioned blockchain is on a peer-to-peer network set up and managed by a single entity. This entity can be a natural person, a company, or an institution. The entity has full control of all nodes on the network. Meanwhile, no one can join the network without express permission.
Indeed, a business or an institution might choose to build its own blockchain from the ground. It writes the core software, buys the necessary hardware, and sets it up. The organization can then deploy its systems on top of the blockchain it created instead of using an existing one. This, however, comes with significant financial, talent, and energy resources.
Also, users or clients might have concerns that the systems created are not transparent, secure, or immutable enough, given that a single entity has full control of the network.
These are blockchains on peer-to-peer networks set up by a group of entities. For example, several technology companies and financial institutions might agree to set up, staff, and fund a company (consortium) that will build and oversee a blockchain they all can use to improve their systems.
To join the network, the existing members have to approve your application directly through a vote or the management of the consortium.
The two most known and successful consortium blockchains are Corda by R3, Fabric by Hyperledger, and B3i.
R3 is a consortium with over 100 members, mostly major financial institutions from around the globe. The list of members includes Wells Fargo, Bank of America Merrill Lynch, Bank of New York Mellon, Citigroup, TD Bank, BBVA, Northern Trust, HSBC, Barclays, UBS, Intel, and Temasek.
The consortium was founded in 2014, and it released the first version of the Corda core software in late 2017.
Hyperledger is a consortium founded in 2015 by the Linux Foundation. The members are mostly technology companies, and the list includes ConsenSys, IBM, Cisco, and Accenture.
The consortium released the first version of the core software of its Fabric blockchain in June 2017.
B3i is a consortium formed by major insurance companies from around the world. It is tasked with building an enterprise blockchain that can help solve some of the insurance industry's problems using the blockchain's potential.
The membership of the B3i consortium includes Aegon, Ageas, Allianz, AXA, China Pacific Insurance, Deutsche Rück, Generali, Hannover Re, IRB Brasil Re, Liberty Mutual, Mapfre Re, SBI Group, SCOR, Swiss Re, Tokio Marine, VIG Re, and Zurich Insurance Group.
These are blockchains on permissionless peer-to-peer networks but allow businesses and institutions to create mini private blockchains on top of them.
While the private blockchain is only accessible to its creator and the stakeholders they let in, it benefits from the security and stability that the main public blockchain on which it is built provides.
Some of the blockchain platforms that can be described as hybrid blockchains are Polkadot and Kusama. On these public platforms, you can create custom and project-specific private blockchains known as parachains.
It is hard to find an industry that will not benefit from blockchain technology in one way or another (see blockchain uses and use cases).
With that stated, the following are some of the industries that are already witnessing enterprise blockchain services that help improve efficiency, cut costs, and improve privacy and security for financial transactions:
Enterprise blockchains are defined by being platforms, or virtual machines, on peer-to-peer networks. More importantly, they are designed with robust smart contract capabilities through which users can automate processes and build systems.
The list of benefits a business or organization can get from using blockchain technology is long. The following are the most conspicuous:
Blockchain creates transparency as data is recorded on a ledger accessible by all stakeholders. Also, through smart contracts, processes and systems can be managed so that it is difficult for someone to interfere with them or change the course of expected executions, which increases trust by all the stakeholders.
The processes on the blockchain are approved and confirmed through a consensus process on a peer-to-peer network. This ensures that nothing can be done arbitrarily, either by a stakeholder or an external entity, by hacking the system.
In addition, data and processes are secured through immutability and public-private key cryptography. This also gives users of the system control over their data, which means mass hacks are impossible and there is increased privacy for the end-user.
Most systems are expected to expand over time, especially as usage grows. It is therefore important that when the need grows, it is easy to scale them. The blockchain is often highly elastic. That means it can easily and, in some cases, instantly scale depending on the need.
First and second-generation blockchains such as Bitcoin and Ethereum have indeed faced significant scalability challenges. When they were designed, there was little thought on their mass adoption.
These blockchains have had to work on layer one and layer two scalability solutions.
Meanwhile, third-generation blockchains such as the Casper Network have been designed with care taken to make them intrinsically scalable. The latter blockchains can process hundreds of thousands of new transactions per second.
The Casper Network is a public blockchain developed with a unique smart contract capability that businesses of all sizes can use to improve their systems and processes. Its focus is on helping businesses and institutions leverage the power of smart contracts on the blockchain.
The blockchain was designed with the enterprise user in mind. It provides optimum capacity but in a more accessible way, especially compared with the other options in the market.
The robustness of a smart contract comes from its dynamism. That is how it can be customized to meet unique needs and adapt to emerging realities both internally and externally.
One way smart contracts are made dynamic is through the use of oracles. These are external sources of data fed to a smart contract to determine if predefined conditions have been met to take a particular action. Dedicated networks provide this service, and Chainlink is the most popular.
The Casper Network goes a step further to make smart contracts on top of it even more dynamic. It creates the ability to have upgradable smart contracts. That means developers behind the project can change particular aspects of the smart contract in the future if there is a need to. That could be an increase in the number of stakeholders, steps, or a change in how data needs to be processed.
However, the ability to upgrade the smart contracts does not affect the system's credibility.
The first generation smart contract blockchains force developers to learn new languages and tools. That could be costly in terms of money and time.
What the developers of the Casper Network have done is to enable the use of already widely used languages and tools. That means an enterprise does not need to acquire the new capacity to build new systems on the blockchain.
In particular, the blockchain supports rust and webassembly. Developers can build enterprise-grade solutions on the Casper network using tools and languages already familiar to them.
A challenge that has stood in the way of many developers and enterprises in leveraging smart contracts on the Blockchain is the cost involved, especially the gas fees.
The gas fees can be not only extremely high on some blockchains and highly unpredictable, making planning a little difficult.
The Casper Network has a protocol that sets the gas fees so that developers and enterprises can predict how much they need, which can help with both short and long-term planning.
If you are a developer or business considering using blockchain to improve your processes and systems, contact Casper Labs today to get the help you need to get started. You can also apply for a grant to help you build your dApp at Devxdao.
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Image courtesy of Pixabay.
