So you’re a decision maker at your company and you’ve heard of enterprise blockchain projects — more and more companies are collaborating in business networks to streamline shared business process such as managing data, tracking transactions, and tracing real-world goods.
But maybe you’re asking, “Why not just use a shared database?”
The reason why not is the “who” problem — the problem of network governance. In a distributed database that’s shared across multiple organizations, governance boils down to four main questions:
- Who actually owns the data?
- Who enforces that the data hasn’t been tampered with?
- Who in the business network has the authority to change or delete data?
- Who creates and runs the application layer that allows all parties to validate the latest transactions?
A blockchain solves the “who” problem by establishing a shared network in which all participants agree on ownership and involvement. Members of a blockchain network host it jointly and equally in a decentralized fashion. The practical question is, what are the actual business benefits and revenue opportunities of enterprise blockchain solutions, and enterprise Ethereum specifically?
A Short Explanation: What Is Enterprise Ethereum?
Most people know that Ethereum is a public blockchain network that transacts billions of dollars in value. But many people don’t know that the Ethereum codebase is also used by enterprises worldwide to form business blockchain networks. Many of these private, permissioned Ethereum instances are separate from the public chain, though they have an option to bridge to data or value on the main public Ethereum network.
For the record, there is no single product called “Enterprise Ethereum.” We use the term here to refer holistically to blockchains built using modified Ethereum clients, such as ConsenSys Quorum, that address the specific needs of enterprise such as increased privacy, performance, and scalability, as well as permissions and governance controls.
The Enterprise Ethereum Alliance, the world’s largest blockchain initiative, distinguishes Enterprise Ethereum implementations as “extensions to public Ethereum providing enterprise-focused additions, including the capability to perform private transactions, enforce membership (permissioning), and provide transaction throughput scaling. Private transactions are transactions where the metadata or payload data are readable only by parties participating in those transactions.”
Another important fact that many people don’t know: Enterprise Ethereum networks don’t face the same scaling or privacy constraints as public Ethereum. They can transact much faster than the 15–20 TPS reported on public Ethereum because network size is smaller, and gas limits and block sizes can be adjusted to allow more transactions per block, scaling to as many transactions per second as other enterprise solutions and DLTs. Adhara has reported 400 TPS on an eight node banking network that includes the South African Reserve Bank, which we’ll discuss in depth later in this article. In addition, private enterprise Ethereum networks can maintain transaction confidentiality of participants, terms, and data at scale.
Enterprise Ethereum vs. DLTs
Hyperledger Fabric and R3’s Corda are the other two enterprise solutions that have earned recognition in this space. Enterprise Ethereum, Fabric, and Corda all share many of the same goals, including increased data coordination across shared ledgers. We greatly admire both Hyperledger and R3 and their contributions to enterprise needs, and we’re finding ways to collaborate on the mission of enterprise blockchain.
But what differentiates Enterprise Ethereum as the most powerful and versatile blockchain for business?
We focus on five reasons — from technical specs to real-world proof points — why Enterprise Ethereum specifically stands above the enterprise blockchain crowd.
1. Enterprise Ethereum has access to public Ethereum, the most secure and developed blockchain platform and ecosystem in the world.
Enterprise Ethereum benefits from the amount of innovation happening on public Ethereum, which is inevitably faster due to more participation — something that just cannot be said by other distributed ledger solutions.
Since 2015, millions of people have purchased billions of dollars of ETH on public Ethereum. But more importantly hundreds of thousands of developers — perhaps millions — have built over 2,000 decentralized applications on Ethereum, as well as the most advanced infrastructure and most robust enablement tools for blockchain solutions development, including testnets like Rinkeby and development environments like Truffle. This has made the public Ethereum network the most real-world tested, resilient, and advanced blockchain development platform in the world.
So how does development on the public mainnet benefit Enterprise Ethereum?
For starters, by building with Ethereum, enterprise solutions can quickly adopt updates to Ethereum and benefit from the innovations of the entire ecosystem. They also gain access to so much more….
A bridge to the mainchain
Ethereum offers enterprise networks one main thing that the other enterprise solutions don’t have — optional access to this vast, active, high-value public blockchain and all the parts of its ecosystem. Why is this important?
In the future, Enterprise Ethereum networks’ access to the public chain may be seen as analogous to an intranet’s access to the internet today, where users behind security firewalls still have access to all or select parts of the internet. In the case of blockchain, enterprise networks have access to the Ethereum “mainnet” via a bridge, able to pick and choose what to interact with on the main chain. This interoperability with the Ethereum mainnet allows data storage across the blockchain and private cloud with customizable privacy and scalability.
Connecting to the mainchain also allows compatibility with and access to:
- other open-source or business blockchain networks
- wider markets and users
- data or governance logic
- thousands of dApps
dApps, according to the Ethereum Foundation, are “unstoppable applications” built to “run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.” The unstoppability comes from the decentralization of the public network run by thousands of nodes securely storing the network, without a single point of failure. Examples of useful enterprise dApps are OpenLaw, a way to automate execution of legal contracts, and Balanc3, an accounting and financial management platform for digital assets. And now, Hyperledger Besu is the first enterprise client that is public chain compatible.
All of this access enables future project adaptations and expansions — effectively future-proofing Ethereum based business solutions. Other enterprise DLT offerings currently only have closed networks, which limit business models, tools, and growth.
Dispute resolution, arbitration, and enforceability
Bridging to a mainchain is also a way to add accountability and enforce the rules of a private network. In a closed private network, rules, terms and contractual agreements can be set beforehand in a highly coordinated way. But, if there’s any bad behaviour or any type of fault or disagreement on the current state, how is a party penalized and the rules enforced? And how can public entities like government regulators or other parties automatically check records for compliance in a trustless manner?
Companies can run a private system but link to a public network which gives the full benefits of a privately controlled network but with public enforcement.