Blockchain solutions are increasingly finding favour with companies aiming to cut costs and enhance the efficiency of their systems. Worldwide spending on blockchain solutions is expected to more than double in 2018 to $2.01 billion, from $945 million in 2017, according to the International Data Corporation (IDC). IDC expects robust growth in blockchain spending, with a 5-year CAGR of 81.2% during 2016-2021.
While blockchain has interested many companies for aggregating data into sequential and immutable blockchain ledgers, concerns about privacy and manipulation have made them think of opting for enterprise blockchain solutions rather than consumer applications.
Advantages of Enterprise Blockchain Applications
Hundreds of companies, including banks, are in the process of testing blockchain solutions for their business. According to a study, over 90 central banks across the world are mulling investment in blockchain, with several countries already having announced massive investments in the sector.
These solutions are in the form of horizontal applications, such as supply chain management, product governance and authenticity, system interoperability and product life cycle data; or vertical applications like transaction settlement, cross border payments, personal health records, and biometrics monitoring.
Blockchain popularity is growing within the corporate world and it’s clear to see why.
Enterprise blockchain tech is revolutionising and enhancing business models and strategies in many different sectors with completely decentralised ledgers expected to play a significant role in tracing supply chains. Indeed, it’s thought that tens of thousands of blockchain pilots are already running within organisations.
Privacy and Security
Public blockchains store data in such a manner that it is easily accessible to anyone. However, this can create problems like allowing a company’s competitor to track business activities or understand its operational process. To avoid such issues, enterprise blockchain solutions take a different approach allowing only trusted and authorised users to take part in transactions.
Competing Businesses Join Hands
Like minded or similar businesses have formed groups like the Ethereum Enterprise Alliance (EEA) who work together to develop enterprise blockchain solutions that specifically address business-related needs. Privacy enterprise blockchain features like ‘permissioning’ and ‘private transactions’ have ensured that even competing groups can work together without worrying about data breaches. Enterprise blockchain groups like the Mobility Open Blockchain initiative and R3 Fintech Consortium are focusing on achieving a perfect balance between speed, security and energy.
Some Popular Enterprise Blockchain Platforms
The number of B2B projects using private and permissioned blockchains rather than public chains has increased in 2018. With companies like Google exploring blockchain for secure audits and other big names from multiple sectors testing blockchain platforms, the day is not far when this revolutionary technology will make cross border payments and supply chain management highly efficient and cost effective.
Some of the most popular enterprise blockchain platforms today are:
1. Hyperledger Fabric
Hosted by Linux Foundation, this platform is an open source collaboration to advance cross industry blockchain technologies. Set up in 2016 by IBM, this platform aims to create enterprise grade distributed ledger frameworks and codebases through plug and play components around consensus and membership services. The major uses of this platform include reconciliation, cross border settlements and payments within distributed environments, like banking and finance.
The key pilot customers of Hyperledger include fintech companies like ABN AMRO and BNP Paribas, healthcare players like Hashed Health, and tech majors like Cisco, Swisscom, Okia, VMware and Thomson Reuters. Several other versions of the Hyperledger, with a different focus, are currently being deployed in various industries.
2. R3 Corda
This platform for financial transactions has been developed by an alliance of 200 financial institutions. Transactions on this platform are recorded on an SQL database, which is easy to search. Some unique features of this platform are Ricardian smart contracts, smart contracts in Java or Kotlin, data tracked in UTXO format and consensus by notaries that check for both validity and consensus. Key pilot and deployment customers include ABN AMRO, Deutsche Bank, Morgan Stanley, UBS, Huawei, Mitsubishi and Wells Fargo.
This enterprise-focused version of Ethereum uses many elements of the famous blockchain platform with some modifications. A major modification is the use of BFT or RAT consensus as opposed to PoQ. Some other features include a peer-to-peer layer that allows only transactions between permissioned nodes and a zero knowledge security layer for extreme privacy.
The feature of allowing both transactions and smart contracts to be made private allows competing entities to work together without sharing their customer data. Major companies trying this platform include National Bank of Canada, Goldman Sachs, Legg Mason, Pfizer and Genentech for their MediLedger Project.
This enterprise blockchain platform was originally created for supply chain management, but its scope has been widened for several other applications, including product authenticity, logistics, real-time monitoring and digital passports. This Ethereum fork uses solid smart contracts, the Ethereum Virtual Machine (EVM) and the Ethereum data store. Unlike many other enterprise platforms, this one uses a cryptocurrency and has two tokens. While the first token is an ERC-20 token that is actively traded on many cryptocurrency exchanges, the second one is used internally on the platform to pay for all transaction fees and smart contract execution fees. Main features include permissioned access, access control and identity management. Major applications of this platform include automobiles, fintech, real estate and supply chain.
Apart from these four platforms, several other enterprise blockchain projects are under development or testing for making supply chain management or operations in the fintech industry more efficient. Although most companies are not using these platforms for large scale productions and processes at present, the trend is likely to change in the coming years. This area of enterprise blockchains is all set to grow and create huge value in the next few years.
Also, what is expected is that many of these leading platforms will join hands to create a base that allows transactions at a high speed, without putting intellectual property at risk.