11 Ways Ethereum Can Benefit Enterprise
11 Ways Ethereum Can Benefit Enterprise
Here’s how Ethereum blockchain solutions can future-proof business networks.
“The large organization has to learn to innovate, or it will not survive.”
– Peter Drucker
What Enterprises Need
Enterprises have very different needs from individual users on a peer-to-peer network. Enterprises need to manage sensitive data in high volume, track quality, and hold themselves accountable to safety and regulatory standards in their industries, be it issuing IDs, executing trades, tracking cargo containers, or labeling pharmaceutical products. Security, certainty, and accountability at scale are paramount for a high-performance enterprise. Enterprise needs ultimately fall into four categories:
- Permissioning. Enterprise use cases often require that only authorized parties can join the network, and that participants have different read, access, and write roles.
- Privacy. Specific transaction data — product name, quantity, price, address, personally identifiable financial information, etc. — should be withheld from or made available to network participants depending on their roles. A freight forwarder, for example, might not need to know the contents of a certain shipping container, but only that the container has arrived. Banking regulations also restrict who may have access to transaction data.
- Performance. Enterprises must have the infrastructure to process thousands of transactions per second and tolerate periodic surges in network activity. One sales order with a thousand lines, for example, triggers a cascade of transactional events. In today’s networked economies, enterprises must be able to collect, validate, and publish an ever-increasing volume of diverse transactions.
- Finality. Institutions transferring large amounts of money need certainty about the outcome of transactions. Funds must be good, and payments must be final.
What Ethereum Offers: Facts and Benefits
Ethereum launched in 2015 as a much more extensible and performant version of the Bitcoin payment system’s underlying blockchain technology. The value of a blockchain is the native certainty of the network: participants can establish a trusted and immutable record of transactions without the need for intermediaries. The decentralized architecture of a blockchain — multiple distributed nodes simultaneously running the software and building the record — ensures that the certainty of the network is never compromised.
The power of the Ethereum blockchain is its programmability: agreements are embedded in the code so that transactions automatically execute. These digital agreements, or “smart contracts,” can have limitless formats, conditions, and even call on other contracts, making Ethereum useful not just for payment settlement, but for arbitrating transactional events in trade finance, supply chains, government registries, energy grids, real estate, law, and many other sectors.
Stability and Popularity of the Ethereum Blockchain
Ethereum has proven to be highly robust against attack while also supporting a diverse range of applications. It is popular for both public and private networks. Here are the facts of the public mainnet today:
- 14K+ live nodes
- 40M+ unique addresses
- 10B daily API requests served by Infura
- $1.5B+ daily trading volume
- 1,900+ decentralized applications (dApps)
- 94% of top 100 blockchain projects are built on Ethereum
- 250K+ developers (more than any other blockchain community)
- 500k+ daily transactions (more than all other blockchains combined)
11 Benefits of Enterprise Ethereum
Ethereum is designed to be low-cost, open, flexible, and suited for cooperation between multiple parties. In terms of coordinating data, Ethereum functions much like a distributed ledger, but its architecture also has unique layers that both strengthen and create new possibilities for business systems. For those who want to understand the different functionalities in-depth, our Protocol Business Architect Brent Xu has written an incredibly thorough, two-part comparison of blockchain vs. distributed ledger technologies. These are the current capabilities of Enterprise Ethereum:
- Data coordination. Ethereum’s decentralized architecture better allocates information and trust so that network participants do not have to rely on a central entity to manage the system and mediate transactions.
- Rapid deployment. With an all-in-one SaaS platform like Kaleido, enterprises can easily deploy and manage private blockchain networks instead of coding a blockchain implementation from scratch.
- Permissioned networks. Kaleido’s Blockchain Business Cloud enables enterprises to form consortium networks in which privileged nodes can function as gatekeepers or regulators (i.e. stop executions, see encrypted state information in plaintext, etc). PegaSys, ConsenSys’ protocol engineering spoke, is currently developing Pantheon, an Apache 2.0-licensed Ethereum Java client which can be used for both public and private network use cases.
- Network size. The mainnet proves that an Ethereum network can work with hundreds of nodes and millions of users. Most enterprise blockchain competitors are only running networks of less than 10 nodes and have no reference case for a vast and viable network. Network size is critical for enterprise consortia that are bound to outgrow a handful of nodes.
- Private transactions. Enterprises can achieve granularity of privacy in Ethereum by forming private consortia with private transaction layers. Constellation, Quorum’s privacy module, uses privateFor parameters to allow participants to exchange private transactions. PegaSys has open sourced Orion, a Java-based private transaction manager that facilitates transactions between authorized parties. PegaSys also recently ported private transaction capabilities from Zcash into Ethereum using smart contracts.
- Scalability and performance. With Proof of Authority consensus and custom block time and gas limit, consortium networks built on Ethereum can outperform the public mainnet and scale up to hundreds of transactions per second or more depending on network configuration. Protocol-level solutions like sharding and off-chain, layer 2 scaling solutions such as Plasma and statechannels present opportunities for Ethereum to increase its throughput in the near future.
- Finality. A blockchain’s consensus algorithm secures confidence that the record of transactions remains tamper-proof and canonical. Ethereum offers customizable consensus mechanisms including RAFT and IBFT for different enterprise network instances, ensuring immediate transaction finality and reducing the required infrastructure that the Proof of Work algorithm demands.
- Incentive layer. Ethereum’s cryptoeconomic layers allow business networks to develop mechanisms that both punish nefarious activity and create rewards around activities such as verification and availability.
- Tokenization. Businesses can tokenize any asset on Ethereum that has been registered in a digital format. By tokenizing assets, organizations can fractionalize previously monolithic assets (real estate), expand their line of products (provably rare art), and unlock new incentive models (crowdsourced data management).
- Standards. Ethereum is where the standards are. Protocols around token design (ERC20), human-readable names (ENS), decentralized storage (Swarm), and decentralized messaging (Whisper) keep the ecosystem from balkanizing. For enterprises, the Enterprise Ethereum Alliance’s Client Specification 1.0 defines the architectural components for compliant enterprise blockchain implementations. The EEA is planning to release version 2.0 of the spec soon.
- Interoperability and open source. Consortia on Ethereum are not locked into the IT environment of a single vendor. Amazon Web Services customers, for example, can operate private networks with Kaleido’s Blockchain Business Cloud. Like the Java community’s spec-driven philosophy, the Ethereum ecosystem welcomes contributions to the codebase through Ethereum Improvement Proposals (EIPs).
The Future of Enterprise Ethereum
Less than a year ago, standing up a permissioned blockchain network was still a time-consuming and expensive endeavor, and involved assembling a team of blockchain developers and spending months and millions of dollars writing custom code. Kaleido’s Blockchain Business Cloud, however, has radically simplified the creation and operation of private blockchain networks for enterprises. They are currently offering no-charge access to their SaaS platform for business organizations to register, spin up, and configure a custom blockchain environment in a matter of minutes.
The long-term option value of enterprise Ethereum is interoperability with the public mainnet, which offers global reach, extreme resilience, and high integrity. Mainnet compatibility will significantly reduce the amount that enterprises currently invest in IT infrastructure and security.
PegaSys, ConsenSys’ protocol engineering spoke, is following the EEA’s specification to build Pantheon, an enterprise-grade Ethereum client written in Java. Pantheon will be open-sourced under the permissive Apache 2.0 software license and is designed to be more performant, pluggable, and maintainable than current Ethereum clients, such as geth. Most importantly, Pantheon will be public chain compatible, opening the doors for enterprises to build private networks that use the same tools and applications as the public Ethereum blockchain, and that envision interacting with the mainnet.
In the near future, the concept of “private” versus “public” blockchain networks might well become a historical footnote, as John Wolpert often opines. Enterprise solutions will maintain private transactions, yet work together to build shared, secure, and future-proofed IT infrastructure, rather than each enterprise duplicating and reduplicating infrastructure for its own use cases. Shared infrastructure will free up innovation and unlock assets that were previously frozen between siloed organizations.
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ConsenSys Solutions brings blockchain to business. We work with enterprises, governments, non-profits, and startups across the globe to build, test, and deploy public and private blockchain solutions.
Industry Use Cases and Applications
Enterprise Ethereum blockchain technology is increasing trust, improving business processes, reducing costs, and creating new revenue models across industries. Find out how.
Real-World Blockchain Case Studies
ConsenSys Solutions and several of ConsenSys’ products have built industry-changing Ethereum blockchain solutions for the sectors of finance, international trade, supply chain, government, social impact, and more.
Learn more about Enterprise Ethereum
- Learn MoreWhat is Enterprise Ethereum and Why is it the Best Blockchain for Business?
- Learn More6 Questions to Ask When Considering Blockchain Solutions for Enterprise
- Learn More5 Reasons Why Enterprise Ethereum Is so Much More Than a Distributed Ledger Technology
- Learn MoreBusting the Myth of Private Blockchains
- Learn MoreDesigning Trust at Scale: Hiding Enterprise Blockchain Complexity in Products
- Learn MoreBlockchains and Interoperability: Helping Enterprise Step into a Larger World
Enterprise Ethereum is the foundation for many industry blockchain use cases and case studies. Find out more about blockchain applications in banking and finance, digital identity, energy, government, healthcare, law, real estate, sports and supply chain management. And read our other case studies:
- Project i2i: Driving financial inclusion in the Philippines
- komgo: Bringing commodity trade finance into the 21st century
- Project Ubin: Exploring the potential of distributed ledger technology in central banking
- Project Khokha: Pushing the limited of interbank payment settlement with blockchain
- Zug: Introducing civil identity on the blockchain
- Smart Dubai: Forging a seamless city experience in the UAE
- EU Blockchain Observatory and Forum: Accelerating blockchain innovation in Europe
- August Debouzy: Introducing joint security token offering services
- Project Unblocked Cash: Revolutionizing humanitarian cash transfers in Vanuatu
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