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Blockchain has entered its third generation and the key target is enterprises. In its metamorphosis it has taken Bitcoin and Ethereum’s most useful features and tailored them to suit the growing needs of large organizations looking for tracking, traceability, confidentiality, transparency, operational cost reduction and transaction cost reduction.
When looking for a blockchain solution, most large organizations today are looking for private blockchains to enable them to work with sensitive customer information in a secure manner.
Enterprise Blockchain has all the features of public Blockchain, though it is permissioned. This means that though it is a decentralized peer-to-peer system, users are restricted and each may be assigned a specific kind of transaction. In this system a central authority exists to ensure confidentiality and traceability for the enterprise data and people with access to it.
Let’s look at some key features of blockchain technology:
Transparency: Every node on the network has a copy of the digital ledger in a permissionless blockchain. To add a transaction every node needs to check its validity, if the majority think it is valid then it can be added to the ledger. This promotes transparency and makes it corruption proof.
Decentralized technology: The network does not have a single person looking after the blockchain framework. Instead a group of nodes maintain the network making it decentralized. In public blockchain users can be spread across geographies.
Enhanced security: Since there is no single authority in public blockchain, the characteristics of the blockchain network cannot be changed for a specific person’s benefit. Encryption also adds another layer of security to the network. In a private Blockchain, users are invited to participate thereby ensuring accountability.
Distributed ledgers: each node has its own copy of the ledger on the blockchain, this distributes the computational power across the computers ensuring greater efficiency and reliability.
Consensus: The blockchain architecture is designed to keep the consensus algorithm at its core thereby helping the users to make decisions.
Some special characteristics of private blockchain:
- Read and write rights vary from node to node
- Faster output
- Users cannot be anonymous
- More economical than public Blockchain
- Centralized authority grants permission to participate
- Users can only view data relevant to them
Challenges for Enterprise Blockchain:
These are some implementation challenges that need to be considered carefully by enterprises before opting for a private Blockchain.
Interoperability: An interoperable ecosystem enables multiple users from separate blockchain networks to interact. Without interoperability unconnected systems will be independent silos unable to communicate or transact.
Legacy systems: Existing legacy networks can create hurdles for implementing blockchain – changing them would require time and investments.
Skillsets: Skilled people are required to develop the blockchain network efficiently, which could mean new IT personnel will be required for the workforce.
Mass adoption: Scalability is a concern for mass adoption as to whether the blockchain network will be able to support numerous users and large volumes of customer-related information without taking a hit on performance.
Enterprise Blockchain has been chosen by a multitude of organizations from a variety of verticals that hope to reap the benefits of a permission peer-to-peer blockchain network that ensures their sensitive information is secure and everyone is accountable. As interoperability becomes easier and collaborations increase, private blockchains will become the game-changer that many experts have predicted.
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