What Is Enterprise Blockchain?
An enterprise blockchain refers to a kind of permissioned blockchain utilized to streamline processes concerning business, for example, settlement of global payments and tracking supply chain goods. Corporations prefer it to a public blockchain network as they can restrict data visibility to a certain group of people.
Enterprise blockchains can revolutionize how businesses collaborate and operate. Such blockchain networks retain the advantages associated with blockchain technology, like decentralization, and immutability. However, they make slight changes to the underlying architecture for functioning in an enterprise-level environment. There are various types of such blockchain networks, for example, hybrid, consortium, and private blockchains.
Table of contents
- Enterprise blockchain refers to a closed blockchain network that requires a mutual agreement between different entities to grant or share access utilized by enterprises.
- Such a blockchain network is of three types — hybrid, private, and consortium.
- There are various advantages to implementing enterprise blockchains. For example, such networks can enhance security and transparency, besides improving speed and efficiency.
- A key disadvantage of this type of blockchain is that integrating it with the existing IT infrastructure might be a daunting task for various companies.
Enterprise Blockchain Explained
Enterprise blockchain refers to a closed blockchain network that enterprises can choose to integrate and apply. It helps in creating contracts, scaling up commercial processes, for example, tracking supplies, exchanging digital information within the company or with other organizations, and settling internal transactions.
These blockchains empower organizations with immutability, scalability, accountability, control, and ease of use, transforming their business radically. By utilizing the key characteristics of this type of blockchain, including transparency and security, organizations can minimize costs and improve efficiency.
These blockchains solve the issues associated with conventional blockchains. Moreover, the former modifies the latter to fulfill large organizations’ requirements.
One can go through these points to understand how this system works.
- These blockchains use distributed ledger technology. This means that in the case of such blockchains, the sharing of the ledger among all permitted participants takes place, and each of the participants has the exact copy. This promotes trust and transparency among users.
- These blockchains involve using smart contracts, which automate the contractual procedures, eliminating the requirement for any intermediary and minimizing potential delays and errors.
- The blockchains run in a decentralized way. Hence, a single entity does not have complete control. Rather, participants make decisions collectively. This contributes to the resilience of the system and makes it challenging for a party to manipulate data.
- Enterprise blockchain solutions employ different consensus mechanisms, for example, Practical Byzantine Fault Tolerance or Proof of Authority. These mechanisms ensure that the recording of only valid transactions takes place on the network.
Some key features of these blockchains are as follows:
- Such blockchains prioritize performance and stability to fulfill business environments’ demands. They employ off-chain processing and sharding techniques in addition to consensus algorithms to ensure high transaction speeds.
- Often, such blockchains support self-executing and smart contracts with prespecified conditions and rules.
- These blockchain networks integrate governance models for the purpose of ensuring consensus and effective decision-making among network participants.
- Such blockchains offer immutable and transparent records of every activity and transaction. This makes auditing and tracking data easier.
- The blockchains generally run on a permission basis.
- These blockchain networks provide privacy features, enabling participants to share and transact sensitive data securely.
- The blockchains concentrate on interoperability, allowing for seamless integration with the existing networks and systems.
- Such blockchains have dedicated consortiums or network administrators overseeing the maintenance, management and governance of the blockchain network.
Let us look at the different kinds of these blockchain networks.
#1 – Consortium Blockchains
These blockchains resemble public blockchain networks owing to their peer-to-peer (P2P) decentralized structure. A single entity does not control the system. Also, all network participants have the distributed ledger’s copy. That said, these blockchains are still private networks. In this case, the difference is that a central organization does not decide who can join the network. Instead, the collective takes this decision. Besides, every network participant must have an agreement regarding data validity before the recording on the chain is complete.
#2 – Private Blockchains
Private blockchains refer to closed networks that are open to only those participants the central entity allows. Contrary to public blockchains, private ones depend on a central node for validating transactions. This node also determines the acceptability of data and who is able to make contributions to the network. Note that these blockchains are prone to attacks; any attack on such a network’s central node can put the whole system in jeopardy.
#3 – Hybrid Blockchains
These blockchain networks combine the characteristics of both public and private blockchains. Because of this, such a blockchain can address the issues inherent in the above two blockchains while retaining the benefits offered by both.
Let us look at a few enterprise blockchain examples to understand the concept better.
Suppose Company ABC is an organization that engages in manufacturing automotive parts. It wants to send financial information that should remain confidential. In this case, using a public blockchain won’t help. So, the organization uses an enterprise blockchain where all nodes cannot view the confidential data exchanged on the network. Before integrating this type of blockchain, the business spotted a suitable blockchain platform and integrated it into its existing business infrastructure. Then, the testing and development phase followed before the final launch.
Nottingham, United Kingdom-based Antier is delivering an advanced enterprise blockchain development solution that serves multiple sectors within the economy. Although there are adverse events or potential challenges in the crypto space, more organizations are switching to transformative blockchain solutions to reduce costs, increase security, and improve traceability and transparency.
Expanding the areas of work and stretching its enterprise blockchain development solutions, Antier is now focusing on strengthening the ecosystem of additional sectors, such as healthcare, finance, education, transport and logistics, entertainment, and more.
Use Cases & Applications
The use cases and applications of enterprise blockchain solutions are as follows:
- Such a blockchain can offer traceability and visibility within the supply chain. This helps in optimizing logistics, improving overall efficiency, and minimizing fraud.
- These blockchains can assist healthcare providers in securely managing patient data, streamlining the pharmaceutical supply chain, and enabling interoperability between various systems.
- Such blockchain networks can make selling, managing, and buying real estate easier by increasing the speed of transactions, minimizing fraud, and giving an immutable and clear ownership record.
- This kind of blockchain offers a decentralized system for identity verification, thus improving security and reducing the possibility of identity theft.
From the above points, one can observe that these blockchains can be utilized in healthcare, real estate, financial services, and supply chain management.
Advantages And Disadvantages
Let us look at the benefits and limitations of such blockchains.
- A key advantage of implementing enterprise blockchain is that it can offer better security through its utilization of cryptographic methods and its decentralized nature.
- It provides a high level of transparency.
- This kind of blockchain can offer an audit trail comprising all transactions. The increased traceability can prevent errors and fraud. Moreover, it can increase accountability.
- These solutions can significantly increase operational speed and efficiency.
- Lastly, such a blockchain can reduce operational costs by automating processes and eliminating intermediaries.
- Implementing and managing such blockchains can be complicated. The complexity can establish a barrier for organizations lacking the required technological resources.
- The evolving regulatory environment can lead to uncertainty. Moreover, it might make it difficult for organizations to ensure compliance while using this kind of blockchain network.
- Integrating these blockchains with an existing information technology or IT infrastructure can be time-consuming and challenging.
Frequently Asked Questions (FAQs)
The four main components of such blockchain networks are as follows:
– Consensus Algorithm: All these blockchains require consensus algorithms to agree on the distributed ledger’s state.
– Virtual Machine: It executes smart contracts on a blockchain.
– Node Application: Such an application allows participants to record, validate, and propose transactions, ensuring the integrity and continued operation of the blockchain.
– Shared Ledger: It records all transactions carried out within the network.
A few examples of such a platform are Hyperledger Fabric, Tezos, Ripple, XDC, R3 Corda, and Hyperledger Sawtooth.
No, Bitcoin does not utilize such a blockchain platform. The Bitcoin cryptocurrency runs on a public blockchain. This means that any person can become a participant within the network. Moreover, they can get access to the information stored on the blockchain network.
This article has been a guide to what is Enterprise Blockchain. We explain its use cases, applications, examples, features, types, and advantages & disadvantages. You may also find some useful articles here –