Private blockchains’ strength comes from trust. When creating a blockchain application, the first question is “is there complete trust between the individuals using this blockchain”. Like most business, the common answer is “no”, which is why public blockchains’ decentralized network keeps all records out in the open.
When there is trust between parties, say through a legal agreement, then private chains become very attractive. Today, one of the most popular ones is Hyperledger. Created in 2015 by the Linux Foundation, it become an umbrella for blockchain collaboration, hosting multiple projects supported by over a hundred organizations. IBM is a leading contributor into these projects, helping make Hyperledger the fastest growing product from the Linux Foundation.
Instead of miners – and the currency needed to pay them – Hyperledger is secured by “Validating Peers” (VP). Each Hyperledger project takes a different approach in how the VPs perform the needed cryptological work, modifying stability, performance, permissions, and trust. Companies can select the best project by weighing these options against their network’s needs.
Free from maintaining a currency and existing only to serve business needs, Hyperledger contributors have created IT-specific products, such as Identity Management, Smart Contracts, and modular consensus engines. This lack of a currency, and a public installation, gives the Hyperledger team the ability to be incredibly agile and bring on new emerging blockchain technology quickly and efficiently.
Hyperledger release frequency is well-planned and doesn’t have the same constraints public chains have. Public chains have a much slower release functionality, as each fork must be carefully managed to ensure all miners switch to the correct side of the fork at the exact same moment. In comparison, organizations can plan, test, and upgrade new Hyperledger releases on their own schedule.
I believe as organizations start putting aside the cryptocurrency hype and look at the underlying backing technology of blockchain they will be drawn to Hyperledger. It has a strong use case in B2B partnership applications and internal organizational communication solving their many pertinent business problems.
- Hyperledger Indy is only months in development but is already creating excitement. It’s a Hyperledger-based implementation of Identity Management and creates a self-sovereign identity token that can be used across silo’d private blockchains. It allows users to authenticate and authorize themselves on private blockchains to create secure communication channels.
- Hyperledger Burrow is an Ethereum implementation enabling developers to create Ethereum byte code with the programming language Solidity and run it on a Hyperledger-based Virtual Machine. Smart contracts are deterministic and give great functionality to storing data and interacting with blockchain data. Ethereum also can run as a private blockchain but Hyperledger removes cryptocurrency, while adding valuable, flexible addons, such as secure signing and a cryptographically-secured consensus with proof-of-stake (PoS).
- Still in the early days of 2018 and we’ve already seen BC Public Sector posting development opportunities into this technology stack.