In this perspective, corporate blockchains also known as permissioned blockchains or DLTs are a different category intended to meet company and organization needs. Unlike public, permissionless blockchains like Bitcoin or the main Ethereum network, enterprise blockchains are restricted.
Why Enterprise Blockchains
The shortcomings of public blockchains when used for standard business needs are a major factor in the creation and uptake of corporate blockchains. Public blockchains provide decentralization and transparency, however they frequently lack crucial features that businesses need:
- Performance (Slow Throughput and High Latency): Traditional corporate systems need thousands of transactions per second, however public blockchains like Ethereum (~14 TPS) and Bitcoin (3–4 TPS) are far slower.
- Lack of Privacy and Confidentiality: All participants may see transaction data on a lot of public blockchains. Businesses frequently need secrecy for transactions and sensitive company data. Although there are various privacy options for public chains, businesses frequently want more robust assurances.
- Lack of Access Governance: Anyone may join public blockchains since they are permissionless. For security, compliance, and accountability, businesses must be aware of and approve participants. Public chains lack central authority and supervision, thus enterprises may worry about accountability in disputes.
- Finality: Transactions in public blockchains, especially Proof of Work blockchains, can be undone, although this becomes harder with time. Businesses usually need transactions to be definitive and irrevocable right away.
- Transaction Fees: Every transaction on public blockchains frequently requires fees to be paid in native coin, such as gas on Ethereum. Businesses may find this to be an unwelcome additional expense.
What are the Key Characteristics of an Enterprise Blockchain
Enterprise blockchains are made with particular features to overcome these constraints:
- Permissioned Access: To join the network and take part in validating or writing to the ledger, participants need to be approved. An owner or group of organizations frequently oversees this.
- Higher Performance: Compared to public chains, they strive for far faster transaction rates and reduced latency.
- Privacy and Confidentiality: They provide private transactions in which the participants or the payload can be concealed from those who are not directly engaged. Access to read and write might be limited.
- Efficient Consensus Mechanisms: Participants can employ more effective consensus algorithms, such as versions of Practical Byzantine Fault Tolerance (PBFT), Raft, Paxos, or Proof of Authority (PoA), because they are somewhat recognized and trusted. This enables instant finality and quicker transaction processing.
- Governance: Usually, the owner or consortium is in charge of the network’s operations and regulations.
- Smart Contracts: Enterprise blockchains, like certain public chains (like Ethereum), allow smart contracts to automate agreements and business logic, therefore automatically enforcing regulations.
- Integration Capabilities: Designed to work with databases, APIs, security infrastructure (such as PKIs or HSMs), and corporate systems that are already in place.
- Scalability: They are made to manage the volume of transactions needed by a particular group of participants, even though they are frequently constrained by the nature of BFT consensus with a very high number of nodes.
- Trust: Instead of depending just on cryptographic evidence and financial incentives, as in permissionless systems, trust is built and maintained among the known players. Mechanisms for fostering trust amongst participants are required.
- Channels: Certain platforms include channels that let smaller groups of users exchange information in secret without disclosing it to the larger network.
- No Native Token or Fees: Unlike public blockchains, many commercial blockchains do not require a native coin or transaction fees.
Architecture and Design Considerations
Instead of being standalone systems, business blockchain solutions have to be seen as a component of a broader enterprise design. Network, protocol (ledger, consensus), privacy, governance, integration (middleware, APIs), and application (smart contracts, DApps) layers are all common in an architecture. All levels share issues about security, speed, scalability, and monitoring. Creating these solutions requires integrating them with current systems and can be aided by well-known frameworks such as Zachman or TOGAF. Deployment and maintenance are made easier by Blockchain as a Service (BaaS) products from cloud providers like IBM, Microsoft Azure, and AWS.
Examples
A number of platforms are made specifically for business use:
- Hyperledger Fabric: IBM made major contributions to this Linux Foundation-hosted open-source permissioned DLT project. used for supply chain tracking by businesses such as Walmart.
- ConsenSys Quorum: ConsenSys purchased a lightweight, open-source Ethereum fork from J.P. Morgan. For corporate use cases, it emphasizes performance, privacy, and permissioning. used in supply chains and finance.
- R3 Corda: A distributed ledger platform for businesses, especially in the financial industry, that isn’t really a blockchain because it doesn’t group transactions into blocks.
- Hyperledger Sawtooth, Oracle Blockchain Platform, VmWare Blockchain, SAP, Everledger, and Autonity are some other platforms.
Blockchain Enterprise Use Cases
Numerous industries are investigating and implementing enterprise blockchains for a variety of purposes, such as:
- Financial Services and Banking: Peer-to-peer loans, trade financing, post-trade settlement, KYC/AML data sharing, payments (cross-border, interbank), and financial crime prevention.
- Supply Chain Management: Tracking, logistics, anti-counterfeiting, transparency, traceability, and provenance.
- Government: Voting procedures, identity management, land records, tax administration, border control, and e-governance.
- Healthcare: Data exchange, remote patient monitoring, and patient record management.
- Enterprise Asset Management: Monitoring, controlling, and transferring both material and immaterial assets.
- Other Areas: Internet of Things, media, retail, real estate, insurance, and education.
To put it briefly, enterprise blockchains seek to modify the fundamental ideas of blockchain technology specifically, distributed ledgers and consensus to meet the unique needs of companies by implementing permissioned access, improved performance, privacy features, and strong governance. This frequently entails trade-offs when compared to the openness and decentralization of public chains.