5 Reasons Why Enterprise Ethereum Is More Than Just a Distributed Ledger

This article comes from media.com, the original authorConsenSysforeword

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If you're a decision maker at a company, you've probably heard of the enterprise blockchain project—a growing number of companies collaborating in business networks to streamline shared business processes such as managing data, tracking transactions, and keeping track of goods. Traceability.

But you might ask: "Why not just use the shared database?"

The reason is that there is a problem in network governance - the problem of "who":

• Who actually owns this data?

• Who can guarantee that the data has not been tampered with?

• Who in the business network has the right to change or delete data?

• Who creates and runs the application layer that allows all parties to verify the latest transactions?

Blockchain solves the “who” problem by creating a shared network where members of the blockchain network collectively and equally use it in a decentralized manner.

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What is Enterprise Ethereum?

Most people know that Ethereum is a multi-billion dollar public blockchain network. However, many people don't know that the Ethereum codebase is also used by some businesses around the world to build their own commercial blockchain networks. Many of these private, permissioned Ethereum applications are independent of the public chain, although they can optionally connect to the Ethereum mainnet.

To be clear, there is no product called "Enterprise Ethereum". We use this term here to refer to those blockchains built using modified Ethereum clients (such as Quorum and Pantheon), which mainly meet the specific needs of enterprises, such as preserving privacy, improving performance and scalability As well as increasing authority and control governance.

Here I have to mention an organization - the Enterprise Ethereum Alliance (Enterprise Ethereum Alliance), which has created a series of standards for Ethereum on best practices, security, privacy, scalability and interoperability, and is committed to bringing Ethereum was developed as an enterprise-grade blockchain.

Another important fact that many people don't know: the enterprise ethereum network does not face scaling and privacy limitations like public ethereum, and its transaction speed is much faster than public ethereum (15-20 TPS). Because of its smaller size, gas and block sizes can be adjusted, allowing blocks to process more transactions. Adhara previously reported that the banking network, including the South African Reserve Bank, had reached 400 TPS.

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Enterprise Ethereum VS Distributed Ledgers

Hyperledger Fabric and R3's Corda are two other enterprise-grade solutions gaining recognition in this space. As enterprise Ethereum, Fabric and Corda share some goals, such as coordinating the entire business network through the use of a shared ledger.

Here is a question, as a blockchain for business networks, what is the difference between Enterprise Ethereum and other distributed ledgers?

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1. Enterprise Ethereum can access public Ethereum, which is currently a relatively safe and developed blockchain platform and ecosystem.

Enterprise Ethereum benefits from innovation on public Ethereum, and because the system is open source and has many participants, this innovation will be more and faster - something that other distributed ledgers cannot do.

Since 2015, millions of people have purchased billions of dollars in Ether ( ETH ) on public Ethereum. But more importantly, tens of thousands (could be millions) of developers have developed more than 2000 Dapps on Ethereum, building the most advanced infrastructure and support for blockchain solution development Tools, including testnets like Rinkeby and development environments like Truffle. This makes the public Ethereum network the world's most tested, resilient and advanced blockchain development platform.

So, how will the development of public ethereum benefit enterprise ethereum?

For starters, by using the Ethereum network, Enterprise Ethereum can quickly adopt public Ethereum updates and benefit from innovation across the ecosystem.

bridge to the main chain

Ethereum provides enterprise networks with a feature that no other enterprise solution offers - selective access to all parts of this large, active, and high-value public blockchain and its ecosystem.

Why is this important?

In the future, enterprise Ethereum networks' access to public chains may be viewed as similar to intranet access to the Internet. Today, users behind secure firewalls can still access all or parts of the Internet. In the blockchain space, corporate networks can access the Ethereum mainnet through a "bridge" and be able to choose what to interact with on the mainchain. This interoperability with the Ethereum mainnet allows data storage across blockchains and private clouds with customizable privacy and scalability.

Connecting to the main chain also allows compatibility and access to:

• Other open source or commercial blockchain networks

• Broader market and users

• data or governance logic

• Thousands of Dapps

According to the Ethereum Foundation, Dapps are "unstoppable applications" that are built to "run exactly as programmed, without the possibility of downtime, censorship, fraud, or third-party intervention." "Unstoppability" comes from thousands of distributed nodes running on the entire public network to store data, and there is no single point of failure. Examples of enterprise Dapps are OpenLaw (a platform for automating the execution of legal contracts) and Balanc3 (an accounting and financial management platform for digital assets), PegaSys’ Pantheon is the first enterprise client compatible with public chains.

All of this access supports future project adjustments and extensions - ready for future Ethereum-based business solutions. Other enterprise distributed ledger products are currently only closed networks, limiting the development of business and tools.

Dispute Resolution, Arbitration and Enforceability

Bridging to the main chain is also a way to increase accountability and enforce private network rules. In a closed private network, rules, terms and contractual agreements can be pre-set in a highly coordinated manner. But how to punish one of the parties and enforce the rules if the current state has any bad behavior or any kind of mistakes, dissent? How can government regulators, or other public entities of various parties, automatically check records for compliance in an untrusted manner?

A company can run a private system but must be connected to a public network — which has all the benefits of a private network but requires public enforcement.

Enterprise network participants do not need to protect their private chains from rewriting history or changing the rules of the network, as they can anchor to the Ethereum main chain that publicly commits to obeying the rules of their private chains.

Base Layer Security

The main chain can also be used to secure assets on private networks, allowing smaller networks to act as sidechains and the main chain to act as a vault. Plasma sidechains or Plasma Cash can be used to transfer assets between the main chain and the connected network, so that the sidechain does not have to rely on itself for full trust permission and security, especially when consumers or customers need to interact with high-value assets , such as escrow loans. Real-world testing of thousands of nodes on public Ethereum ensures the security of the base layer on sidechains or private networks, and allows for greater interaction of enterprise networks with more parties and marketplaces.

Technical Architecture: A Unified Ledger

Like public Ethereum, Enterprise Ethereum implementations exhibit a single unified network-stored ledger. This single ledger can support countless use cases, allowing additional privacy and scalability solutions to be built on top of the protocol without restricting ownership.

Other enterprise solutions build these aspects into the protocol itself. Corda is not a single DLT (decentralized distributed ledger technology) — in fact, Corda doesn’t even call itself a blockchain — and most Fabric implementations are multi-channel, which is the distributed ledger equivalent. Of course, this can cause customization and scaling issues, since maintaining a large number of encrypted channels at the same time can make things very complicated.

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2. Enterprise Ethereum has a lower-cost business model and can be deployed quickly.

Ethereum's open-source codebase and flexible platform enable Enterprise Ethereum to have a low-cost business model as it eliminates vendor lock-in and reliance on a single large solution provider whose business model is to upsell , providing deeply dependent services such as cloud services and consulting services.

A permissioned private Ethereum network can be set up in a matter of weeks — a fraction of the time compared to other solutions that are difficult to maintain. What's more, over the past three years, Ethereum has proven itself on thousands of nodes on the public mainnet. New business solutions are constantly being launched, such as Kaleido's Blockchain Business Cloud, which is an integrated blockchain solution for business platforms; another example is the SaaS platform, a solution for building and running enterprise blockchains; modified Ethereum clients such as Quorum and Pantheon allow enterprises to create, test and deploy enterprise network solutions in minutes.

Kaleido is a good example. The Small and Medium Business Exchange (SMBX) provides a blockchain-based trading platform for community investors to issue, buy and sell small business bonds. "Since we operate this marketplace on behalf of the SMBX community, Kaleido has helped us bring our solution to market in a very short time and at a very low cost," said SMBX CEO Benjamin Lozano.

Another example of Kalego is Komgo, a cutting-edge commodity trading and financial network comprised of Citigroup, ING, Koch Supply & Trading, MUFG Bank, Societe Generale, Credit Agricole Group, BNP Paribas, Shell and other global institutions.

"By building on an open blockchain system, Komgo can choose among the best protocols developed from across the ecosystem and use existing building blocks to optimize the solution," said Komgo CEO Sulaima Ba De (Souleima Baddi) said. "Now, with the proof-of-concept and pilot work complete, Kaleido will help us quickly deliver a production-ready product to a large number of participants."

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3. Enterprise Ethereum obtains cash flow by uniting participants through asset digitization.

Enterprise Ethereum has the most advanced asset digitization platform on the market - derived from the ERC-20 tokens used on public Ethereum.

Tokenization has three significant benefits:

First, converting a fiat asset or an asset into a digital asset enables businesses to perform secure, scalable, and fast asset transfers. Assets registered in a digital format can be migrated and tracked faster while achieving a high degree of security, saving time and money, and opening new revenue streams.

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Source: Global Banking and Finance Review

There are now 8 banking entities in the Khokha blockchain network who are transacting faster than ever before with extreme security, saving themselves and their clients hours of time and millions of dollars . Other banks on the Khokha blockchain network are incentivized to keep the blockchain network running at its best and further to find more ways to achieve common operations that were not previously thought of. Adhara also built privacy into transactions, which is not possible on public Ethereum.

Multiple companies coming together on a blockchain to optimize shared processes can significantly reduce trust costs while improving security and increasing control of trust operations between entities, such as data sharing, digital transactions, and legal agreements.

The second reason why asset digitization presents profound opportunities for businesses is that it opens up new investment and equity models, where ownership of real-world assets can be “divided.” Tokenization allows all participants on the platform to obtain equity, including companies, investors, developers and users, thereby increasing the opportunity of the entire ecosystem.

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4. Enterprise Ethereum has a large enterprise ecosystem.

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5. Enterprise Ethereum can be future-proof

Future-proofing your company against obsolescence. Earlier this fall, we explored three case studies of companies that failed to innovate, failed to meet market needs, and were consigned to the dustbin of history. For enterprise blockchain solutions, in order to face the future, we must focus on these three aspects:

• Ethereum itself

• your company data

• your company itself

More and more businesses are recognizing the power of the entire Ethereum ecosystem, as evidenced by the explosion of high-paying blockchain engineering jobs and the macro trends in venture capital. There are more Ethereum developers than any other blockchain community, with over 1 million downloads of the Truffle-based Ethereum development framework alone. If you want to hire a blockchain engineer, look for Ethereum.

In the words of TechRepublic, Ethereum is "first and foremost a secure way to power an ecosystem of applications." Due to its size and diversity, Ethereum has built-in network effects. Additionally, it has become the most technologically mature and production-ready blockchain with the largest development ecosystem, most active community, most resources, and second-highest market cap. Ethereum is more forward-looking than any other protocol.

Second, for the future, you can refer to the actual functions of the blockchain. Blockchain can store data and cannot be tampered with, which is safer than centralized third-party databases. On Ethereum, a company's data is future-proof.

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Conclusion: Enterprise Ethereum is a real-world application of Ethereum

Over the past 3+ years, public Ethereum and its developer community have created the most flexible, tested and advanced blockchain platform to best build and customize "unstoppable applications". "This paves the way for businesses to take advantage of the public network and customize it to their own network needs, including improved privacy, permissions, and faster transaction speeds." But the real product of the Ethereum ecosystem (Enterprise Ethereum ) is the key to the future success of the enterprise.