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Understanding Enterprise Blockchains


The advent of blockchain technology has disrupted the technological landscape and several tech giants like IBM, Microsoft, RigoBlock have incorporated it for more transparent and robust systems. While the level of interest in blockchain remains fluid, a July 2017 survey of 400 large companies by UK firm Juniper Research found 6 out of 10 respondents were either actively considering, or are in the process of deploying blockchain technology.

Companies like is trying to use it to enforce content ownership, wants to enforce data ownership, and the IBM TrustChain consortium to track the provenance of diamonds from mine to store. Despite the huge potential, scalability and significantly lower transaction speeds continues to be a persisting issue.

The blocks on Bitcoin and Ethereum have significantly less storage. Bitcoin has a little over 1 mb of space per block, which is not enough to sustain all transactions and store all data. Bitcoin can barely manage 7-8 transactions per second.

Moreover, the block confirmation time is 10 minutes which adds to the latency. It is a major issue with big enterprises as they need to deal with millions of transactions per day with nearly 0 latency.

Since the arrival of Bitcoin several blockchains have emerged, namely: Public, Private and Consortium Blockchains. Consortium blockchains additionally remove the sole autonomy which gets vested in just one entity by using private blockchains.

Public and private blockchains are peer-to-peer networks, both of them offer a decentralized ecosystem. Every single node has copy of the blockchain. The blockchains are kept up-to-date by consensus protocols and both guarantee immutability.

Public Blockchains

  • Public blockchains are open ecosystems where anyone can take part.
  • The network contains a built-in incentive mechanism which rewards the participants for taking part more extensively in the system.
  • Public blockchains following the proof-of-work protocol which requires immense amount of computing power in order to solve hard puzzles.

As a result, public blockchains are not the ideal choice for enterprises.

Private Blockchains

  • Private blockchains are not open to everyone.
  • People who want to participate in the private chain must gain permission from the existing participants.
  • Private blockchains are also known as permissioned blockchains.
  • An access to a new participant can be given by existing participants in the ecosystem, a consortium or a regular authority.
  • Once a participant joins the ecosystem, they can play a role in network maintenance.
  • For example, Hyperledger Fabric is a permissioned blockchain framework. It has been created to meet enterprise requirements.

The blocks on Bitcoin and Ethereum have storage issues. Bitcoin has a little over 1MB of space per block, which is not enough to sustain all transactions and store all data. Bitcoin can barely manage 7-8 transactions per second. Moreover the block confirmation time is 10 minutes which adds to the latency. It is a major issue with big enterprises as they need to deal with millions of transactions per day with nearly 0 latency.

Necessary  Features of Enterprise Blockchains

Public blockchains are highly unsuitable for enterprises whereas private blockchains can meet the required enterprise requirements.

1. Privacy

Privacy and security are a must for enterprise-level blockchains. Since enterprise blockchains are permission blockchains all members are carefully verified before they enter the system. With the use of digital signatures all network messages enable nodes and clients to verify the sender and validate the message. It is combined with transport security to authenticate the communication end points and simultaneously encrypt the message traffic. When these practices are used transparently for all communications and data stored on the ledger, it helps maintain the integrity and security of the blockchain network.

2. High Performance

Public chains cannot sustain even 100 transactions per second. Whereas most enterprises need 10,000 -100,00 TPS, it is not an ideal proposition. Consequently, blockchains need to adopt an approach which-

  • Supports in effectively compartmentalizing different tasks
  • Uses faster consensus protocols
  • Utilises parallelization efficiently
  • Uses asynchronous flows
  • Executes itself in optimised environments

For example, Hyperledger Fabric has incorporated these principles. Software Guard Extensions (Intel)  is another avenue which has implemented these architectural principles.

The enterprise PoC (Proof-of-Concepts) only have a few participants during test runs. A permissioned chain needs to accommodate a minimum of 100 participants. Thus, it must have an efficient onboarding process.

3. High Resilience

Enterprise blockchains must be able recuperate effectively from downtime and potential failure scenarios. The blockchain must have sound resilient systems which assume that failures will happen and equip the system accordingly for smooth functioning of the system during such events. Enterprise chains can deploy clustered ordering services redundant peer nodes and maintain a copy of other working blockchain network components for working seamlessly.

Many industrial groups have created consortia to work together on blockchain technology projects and frameworks. Private transactions and permissioned protocols enable competing groups to work together without the fear of the competitors gaining access to the company secrets.

Some of the key groups and consortia that are active today include:

  • Enterprise Ethereum Alliance (EEA): 500 members including  HP Enterprise, JP Morgan, NTT Data, Microsoft, Cisco, Accenture, Bancor, Consensys, Intel, Pfizer, Samsung, Thomson Reuters
  • Mobility Open Blockchain Initiative (MOBI): 30 members including BMW, GM, Ford, Renault, Bosch, IBM, Hyperledger, IOTA, Blockchain at Berkeley
  • R3 Fintech Consortium: 200 members including Barclays, Bank of America, Citibank, Morgan Stanley, Goldman Sachs, JP Morgan, Credit Suisse, UBS, Commonwealth Bank of Australia, Wells Fargo, ING, BNP Paribas, US Bancorp, Deutsche Bank, HSBC, State Street.

In a private chain the network selects groups which will run the nodes. As these groups are selected from a pool of trusted entities, they form trusted nodes. Enterprise blockchains can thus utilize much less secure consensus protocols to maximize the throughput while simultaneously reducing energy consumption. The subsets of nodes can run less intensive consensus protocols. This enables parallel processing of the consensus.

The combination of parallel processing, trusted nodes and less demanding consensus protocols lead to higher performing networks. As a result, permissioned chains have greater performance efficiency than public chains.

Top Enterprise Blockchain Platforms include:

  • Hyperledger Fabric
  • Quorum
  • VechainThor
  • R3 Corda
  • Digital Asset
  • Hedera Hashgraph

Enterprise blockchains have much higher throughput, lower latency, and often less complex consensus protocols thanstandard public blockchains like Bitcoin or Ethereum.

Hyperledger Fabric

Hyperledger Fabric is a distributed ledger technology (DLT) developed by IBM and Digital Asset.The source code was open sourced and was donated to Linux Foundation which maintains the Hyperledger Project.

Fabric is a modular platform that allows customization and taps the permissioned blockchain technology to build private business networks.

Fabric provides a framework that includes-

  • Smart Contracts
  • Identity Management
  • Sub-channels
  • Consensus
  • Support for a range of languages

Fabric is usually  deployed in within a company, group of companies, or a consortium; thus the design had been changed to Execute-Order-Validate where  transactions can proceed before consensus is reached. After the execution  consensus is used to order the transactions, validate them, and then write them to the ledger.

The consensus is plugabble and can utilize faster Crash Fault Tolerant (CFT) or a range of Byzantine Fault Tolerant (BFT) protocols. Consensus relies on a subset of nodes that makes parallel processing possible. Consequently, sets of transactions for a given smart contract need not be executed in a specific order.

The primary mechanism for executing permissioning and privacy in the blockchain is a function of subchannels. They enable groups in a specific network to lay down rules for transactions which cannot be seen by other members of the same network. Subchannels also enable a high level of customization.

Key use cases for the network include cross-border payments, supply chains, reconciliation and payment within distributed networks.


Quorum is a permissioned blockchain platform developed specifically for enterprise use cases. It is a fork of “Go Ethereum” which was developed  by JPMorgan, the major bank based in New York City. It is based on Ethereum and it utilizes many of the elements of the well-known public blockchain platform.

Transactions and smart contracts can be made private in Quorum. Parties not included in the transactions will only see hashed data which  can only be decrypted with the private keys of the participating parties. Subsequently, transacting parties will be able to decrypt the information and and will execute the required smart contract (Contract Code). All other parties are unable to decrypt the  information and will skip the transaction.

The primary modifications to Ethereum include:

  • Use of BFT or RAFT consensus, as opposed to PoW
  • Both Public and Private transactions are allowed
  • Addition of ZSL — Zero Knowledge Security Layer for extreme privacy
  • Private data is shown as encrypted hashes to those without permission
  • Peer-to-peer (P2P) layer only allows transactions between permissioned nodes

Quorum operates in a trusted node environment so it can use a simpler consensus protocol than Ethereum. This results in lower latency and faster TPS when compared to Ethereum mainnet. Moreover, all upgrades to Ethereum are built so Quorum has an additional advantage of leveraging the Ethereum developer ecosystem.

A large number of technological platforms are seeking to implement a working PoC to disrupt their systems. With IBM and Microsoft already tapping the advantages, it is not false to assume that blockchain technology will transform the technological landscape.


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