Blockchain has now been around for over 11 years, and its potential applications in enterprises are now becoming evident. From the supply chain to banking, insurance to copyright protection, many sectors are leveraging the features of blockchain to automate transactions, reduce inefficiencies, and enable easier collaboration between interconnected parties. So much so that IBM predicts the blockchain market will be worth $60 billion by 2024.
However, blockchain isn’t necessarily a panacea. It offers great value in various use cases, but in some circumstances, its features may be limited. Blockchain works best in situations where multiple parties would benefit from a means of automating transactions, where the transactions are recorded permanently and transparently in a shared ledger. Because the ledger is stored across multiple nodes on a network, it also offers more security against attacks than data stored on a centralized server.
If you’ve decided already that there’s a business need that can be met by blockchain, then there are several questions to ask that will help to choose the right platform.
Public vs. Permissioned
Blockchains are broadly split into two camps – public and private.
A public blockchain is open to participation from anyone. Developers can build applications that write data, or anyone with the right hardware and software can act as a network node. In a public blockchain like Ethereum, nobody knows the identity of the node operators.
Although public blockchains are developed around the principles of transparency, this doesn’t mean that anyone can see all the data on a public blockchain. Applications can be programmed to require user permissions for reading or writing.
As things stand, many public blockchains have severe limitations on scalability and throughput. Bitcoin and Ethereum are known as highly secure blockchains, but both are also inefficient and costly in terms of energy and capacity. For example, Ethereum can only manage around 15 transactions per second.
Transaction fees are directly related to the throughput capabilities. At times of high throughput, transaction costs can rise. Therefore, if speed is a consideration, you’ll need a blockchain already capable of managing your transaction throughput.
Permissioned blockchains require user authentication before anyone can join the network. Transaction data is private and only visible to those with the necessary access rights. The trade-off with permissioned blockchains is that they may be less secure, due to fewer nodes running the network.
Hyperledger Fabric is one example of a permissioned blockchain. It powers IBM’s Food Trust, which is the supply chain platform used by Walmart and Nestlé, among others. R3 Corda is a permissioned blockchain developed by a consortium of banks.
In 2020, there are so many blockchain platforms, with different features, that no enterprise needs to go out and develop their own. With the availability of reputable blockchain-as-a-service (BaaS,) enterprises can leverage the experience of blockchain experts to create customized applications and solutions.
Jelurida is one example of a BaaS provider with a comprehensive range of services. Jelurida operates the Ardor platform, which is a customizable blockchain infrastructure based on a parent-child chain structure. The main Ardor parent chain performs all the generalized work of transaction security and processing. Child chains can be configured for any purpose, and carry out operational tasks such as asset creation and transfer, running a vote, or messaging.
Ardor’s structure means that child chain operators can pay their transaction fees in a token that’s unique to their child chain. As an operator, you can also assume transaction costs on behalf of your users or clients. This is in contrast to other single-chain blockchains such as Ethereum, where the user must pay the transaction fees in the network token.
The parent-child structure, combined with a mechanism known as transaction pruning, also gives the Ardor platform far higher transaction capacity than Ethereum.
Ardor is a public blockchain, meaning anyone can participate and set up their own child chain. However, child chains can also be configured for security. It’s possible to apply multiple signature approval models or restrict transactions to certain users.
If an enterprise decides that a separate private blockchain is better suited to its needs, Jelurida can also provide private blockchain implementations based on its established codebase.
Among the company’s existing clients is German household goods giant Henkel, which engaged Jelurida to help realize its digitization strategy.
DragonChain is an open-source blockchain infrastructure, with the BaaS services provided by DragonChain Inc. The original platform was developed by The Walt Disney Company, but later open-sourced in 2016.
DragonChain provides a serverless ecosystem enabling companies to start using blockchain applications easily and securely. The system uses existing programming languages familiar to most programmers, such as Java, Python, or C++.
This means DragonChain is likely to be compatible with existing enterprise technology stacks and offers the flexibility for businesses to employ their own developers for writing smart contracts.
DragonChain also enables businesses to specify the level of security around their transactions, applying a multi-tiered approach to block validation. For lower security transactions, say low-value payments, a representative within the business could approve the transaction, and it doesn’t need to undergo any further validation.
DragonChain has been implemented in Yok Impex, a textile recycling service holding an 80% market share in Singapore. The blockchain capability provides improved track and trace capabilities, helping to reduce overstocking in the fashion industry.
Blockchain is set for significant further growth among enterprises over the coming years. Leveraging the capabilities of a reputable BaaS provider sooner rather than later provides the opportunity to start capturing efficiency gains today. By the time enterprise adoption peaks, the earlier entrants will already be ahead of the competition.