Blockchain Applications in Business: Platform Considerations
There are different platforms for building a blockchain solution ranging from the original Bitcoin blockchain to EOS, from the smart contracts focused Ethereum to IBM’s HyperLedger Fabric, and so on. Blockchain applications in business largely depend on the use case or the specific problem one is trying to solve. In our earlier posts, we have detailed blockchain applications use case landscape, including cost implications one needs to prepare for.
Blockchain is a Distributed Ledger Technology (DLT) that allows for secure transfer of value in a way that is verifiable, traceable, timestamped and transparent. Blockchain is a database network to which anyone with access to the software can become a participant, while validation of data entry is done via a consensus algorithm.
Interestingly, when Satoshi Nakamoto, in 2008 released the 9-page paper titled “Bitcoin: A peer-to-peer electronic cash system”, the word ‘blockchain’ was never used. Later on, enthusiasts coined the term from Satoshi’s description of a system which adds transactions, timestamped, and validated via Proof of Work consensus algorithm, into a block and chaining (connecting) the blocks using cryptography.
In this article, we will explore the different types of blockchain applications platforms, on which one can build a decentralized solution. There will also be a mention of some alternative DLT platforms. Building a brand new blockchain platform from scratch is expensive and time-consuming. A smarter approach, clearly, is to utilize an already existing one.
Before delving into the actual platforms, let’s quickly check how to evaluate if your use-case demands a decentralized solution.
Table of Contents
- Proof of Concept
- Choosing the Right Blockchain Applications Platform
- Community Support
- Ensuring C.A.M.I in your Blockchain applications
- Hiring the right developer(s)
- Granular Security
- License Check
- Platform Native Tokens or Cryptocurrency
- Permissioned vs Permissionless
- Regulatory Compliance
- Road Map
- Platform Security
- Transactions Per Second (TPS)
- Use Case
- R3 Corda
Proof of Concept
Blockchain applications are best suited for systems requiring a trust layer for the multiple participant organizations to operate efficiently. This means not every idea will be a viable blockchain use case. However, traditional systems are not able to let one know for sure that, “what I see is what you see”, as coined by R3.
Once you have decided to integrate blockchain applications into your business, you must subject your idea to the Proof of Concept (PoC) litmus test. It’s a simple test where you and your team ask yourselves the following questions:
- Do you need to share data across organizations?
- Do all players trust each other?
- Is there a need for a strong audit trail?
- Does the data need to be immutable?
Did you answer yes to the above questions and believe that a centralized solution is not acceptable?
Congratulations! you have a valid blockchain application use case.
Choosing the Right Blockchain Applications Platform
We will begin by talking about the features to consider when choosing a platform for integrating blockchain applications into your business. Each business is unique, it is, therefore, important to choose a platform that best meets your business needs or a particular use case.
Although blockchain itself is a new technology (only a decade old), it is a combination of four previously existing technologies. These four technologies are the internet, cryptographic keys, distributed networks and protocol governing incentivization. As you bear this in mind, also consider the features below when making your choice.
How vibrant and accessible is the community for the blockchain applications platform of your choice? As you progress along with your blockchain project, you will need a good amount of feedback and support.
Ensuring C.A.M.I in your Blockchain applications
C.A.M.I stands for Compatibility, Adaptability, Multifunctionality, and Interoperability. We must ensure that as many of these 4 factors are covered in our Blockchain applications.
By default, a decentralized system is not compatible with a centralized system. Nevertheless, your chosen blockchain platform should be able to easily adapt to existing technologies already in use by your business.
Also, you would want a platform that is multifunctional, covering all aspects of the project, helping you avoid setting up on different platforms.
Hiring the right developer(s)
It’s no longer news that there is a huge gap between demand and availability of blockchain talent. Additionally, it doesn’t help that virtually each blockchain platform has its own language/ framework that needs to be mastered. There are even multiple languages for some platforms. To top it all, you also need developers who are proficient in web or mobile development to build interfaces to deliver your blockchain logic. In totality, this makes it hard to find the right developers for your specific needs in terms of blockchain.
When choosing a platform, make sure to consider the availability of developers experienced in working on that platform. Or better yet, choose a platform that allows your developers to build in a language they are already familiar with.
There is no business value in being the only project using a particular platform. When searching for a platform to use for your project, confirm that some other projects within your industry and adjacent industries are also using the platform. Later on, there could be potential to collaborate and deliver cross-industry products and services. Working on the same platform makes achieving this easier and faster.
Be sure to confirm that the granularity of security of the platform you choose meets the standard required from an enterprise IT system. This is especially important if your blockchain project would require giving restricted permissions to vendors and users. For instance, in a supply chain solution built on the blockchain, a private platform is more likely to enable you to grant limited access to the transporter, the retailer and participating organizations.
Open source could be the tagline for the decentralized community because most platforms are free to use with commissions paid in the form of transaction fees. However, there are patented platforms like Hedera Hashgraph that charge subscription fees.
Platform Native Tokens or Cryptocurrency
If for instance, you have an energy industry use case that requires the tokenizing of watts for easy peer-to-peer trading of excess energy by consumers, then you would need a blockchain application platform that supports the creation of platform-native tokens. It is important to note here that most enterprise-grade blockchain platforms do not support native tokens or cryptocurrency. But virtually all public blockchain platforms support native tokens and crypto.
Permissioned vs Permissionless
Blockchains are categorized based on whether participants in the network need to be authorized (given permission) before they can join. Cases where you require all your participants to be authorized before joining the network, you will also need an enterprise-grade blockchain applications platform like IBM Blockchain or Quorum. But where you do not require all your participants to be authorized before joining the network, a public permissionless blockchain platform like Ethereum and Waves should suffice.
In today’s age where data is everything, protecting it becomes vital. Blockchain is primarily a database and runs on data. This data is generally available to anyone, especially on permissionless blockchain platforms. If privacy is of utmost concern to your project, you should explore options that guarantee privacy only sharing data on a need-to-know basis with authorized persons.
It is pointless to spend time and resources launching your blockchain project only to get slapped with a cease order. Clearing things with a lawyer who understands blockchain is vital. This is especially important for the financial industry and payments use case blockchain applications. Some countries’ regulations do not allow for the creation of native tokens to sell to the public.
Also, considering that blockchain is first a database, you must ensure that your chosen platform complies with privacy, security and data protection laws like the EU General Data Protection Regulation (GDPR), depending on your location.
While your project and the platform could be going in the same direction at the early stages, things could change down the road. You want to check the roadmap for your chosen platform to confirm that its direction is clear and aligns with your project’s goals. For instance, generally, private permissioned platforms do not issue native tokens, however, some like Ripple issue native tokens. If your project requires the creation of native tokens, ensure the platform intends to support that as seen in their roadmap, even though not supported at launch.
Scalability is often quoted as the number one challenge with blockchains. This becomes a consideration as users of, and transactions performed on a blockchain platform increase. Before picking a platform, you want to ensure that it is one that has a sustainable plan for scalability. Only a few permissioned blockchain applications platforms like NEO, Quorum and Hyperledger are agile in this area, while most permissionless blockchains still struggle. In essence, projects that are transaction-intensive will incur high network fees, in addition to security and scalability.
Blockchain’s cryptographic security layer feature has endeared the novel technology to many. You want to ensure that the security of your choice of blockchain platform has been tested and peer-reviewed several times.
Do they have a strategy to protect against the 51% attack?
How large is their hash power?
You may also want to stay away from platforms not yet ready for deployment or still in experimental mode.
Transactions Per Second (TPS)
Average throughput for popular blockchains ranges from about 10 tps for bitcoin, 56 tps for Dash and 1,000,000 tps for Ternio. The lower the tps, the more likely the blockchain is decentralized and permissionless. The higher the tps, the more likely the blockchain is centralized and permissioned. So, bear this in mind when choosing a platform based on tps.
As we discussed several times, most blockchains are built with a specific use case in mind. In fact, for the forefather of all use cases, bitcoin, its blockchain was specifically developed for the facilitation of peer-to-peer transactions, without the need for trust and capable of crossing international borders in minutes. It is therefore important to observe that some blockchain application platforms are best suited for particular use cases.
Another point to note here, which has been detailed in the Proof of Concept section above, is to ensure that the problem being solved is not already taken care of by existing technology.
Top Ten Blockchain Applications Platforms
Here is a list we compiled of top ten blockchain platforms based on the above criteria:
The EOS platform is open source, although founded by a private company, and offers tools for building, hosting and storage solutions to blockchain projects. Consensus on the EOS platform is through multi-threading and delegated proof of stake.
Almost synonymous with “smart contracts” for being the first platform to allow for easy automation of transactions based on the execution of preprogrammed conditions. Vitalik Buterin, its founder, together with a small team of other developers had taken inspiration from the bitcoin blockchain, launching Ethereum in 2014. Applications built on the Ethereum Platform are run on the Ethereum Virtual Machine (EVM). This blockchain platform is not industry-specific and it is being used from gaming to media to payments to governance. The Ethereum platform has a native cryptocurrency called Ether, used for facilitating transactions on the network.
Founded by the Linux Foundation, there are three Hyperledger platform projects that let one build and deploy decentralized apps (DApps) on the blockchain.
- Hyperledger Sawtooth contributed to by IBM and Digital Assets, uses Proof of Elapsed Time (PoET) and integrates with Hardware security.
- Hyperledger Fabric adopts a modular approach to building blockchain applications.
- Hyperledger Iroha uses a consensus algorithm called “Yet Another Consensus”, supports macOS and is also modularized in approach.
Multichain is another open-source blockchain platform, modelled after the bitcoin blockchain but supporting multi-asset financial transactions.
Owned by the OnChain blockchain R&D company, NEO uses the Delegated Byzantine Fault Tolerance mechanism allowing projects to build scalable DApps.
A blockchain platform where transactions are free of costs. The platform, developed by CoinPrism is open-source and uses a partitioned consensus that allows for a single authority to validate transactions. OpenChain is better suited for projects involved in the administration of tokenized digital assets.
Private and permissioned, Ripple’s goal is to connect banks, local and international, on its RippleNet, thereby allowing for a large volume of transactions with no chargebacks. It has a native cryptocurrency called XRP.
R3 Corda is a private blockchain platform that allows blockchain projects to interact directly with smart contracts. It uses the Asynchronous Byzantine Fault Tolerance consensus algorithm and adopts the Hedera Hashgraph council for its governance.
An example of a specific purpose blockchain platform, Stellar was built to allow for cross-asset value transfer on the blockchain. Think about someone sending Dollars from the US and another receiving Euro in Europe. Same value, different assets. You can build banking tools or mobile wallets on the platform thanks to its unique consensus algorithm: the Stellar Consensus Protocol (SCP).
An enterprise version replica of Ethereum built by JP Morgan Chase, Quorum is open source, although permissioned. It uses votes based algorithms to validate transactions, thus majority always wins.
Other Worthy Mentions
The rest of the other platforms are mentioned here, so you can have more options to consider.
- Chain Core
- Domus Tower Blockchain
- Platform 6
- Symbiont Assembly
Alternative Decentralized Solutions
Blockchain is not the only DLT out there. There are others like the patented Hedera Hashgraph looking to solve the decentralized trust problem, Directed Acyclic Graph (DAG), HoloChain, Interplanetary File System (IPFS) looking to solve the decentralized data storage problem, and more.
As we can see from the discussion above, there is no one blockchain or DLT to rule them all. No one blockchain or DLT is superior to the other. Your choice will depend on the platform that best meets your business needs and better supports your industry use case.