Michael G. Solomon - Blockchain Data Analytics For Dummies

Dozens of blockchain implementations are available today, and soon there will be hundreds. Each new blockchain implementation targets a specific market and offers unique features. There isn’t room in the book to cover even a fair number of blockchain implementations, but you should be aware of some of the most popular.

Remember that you’ll be learning about blockchain analytics in this book. Although organizations of all sizes are starting to leverage the power of analytics, enterprises were early adopters and have the most mature approach to extracting value from data.

The What Matrix website provides a comprehensive comparison of top enterprise blockchains. Visit www.whatmatrix.com/comparison/Blockchain-for-Enterprise for up-to-date blockchain information.

Following are the top enterprise blockchain implementations and some of their strengths and weaknesses (ranking is based on the What Matrix website):

Hyperledger Fabric: The flagship blockchain implementation from the Linux Foundation. Hyperledger is an open-source project backed by a diverse consortium of large corporations. Hyperledger’s modular-based architecture and rich support make it the highest rated enterprise blockchain.

VeChain: Currently more popular that Hyperledger, having the highest number of enterprise use cases among products reviewed by What Matrix. VeChain includes support for two native cryptocurrencies and states that its focus is on efficient enterprise collaboration.

Ripple Transaction Protocol: A blockchain that focuses on financial markets. Instead of appealing to general use cases, Ripple caters to organizations that want to implement financial transaction blockchain apps. Ripple was the first commercially available blockchain focused on financial solutions.

Ethereum: The most popular general-purpose, public blockchain implementation. Although Ethereum is not technically an enterprise solution, it's in use in multiple proof of concept projects.

The preceding list is just a brief overview of a small sample of blockchain implementations. If you’re just beginning to learn about blockchain technology in general, start out with Ethereum, which is one of the easier blockchain implementations to learn. After that, you can progress to another blockchain that may be better aligned with your organization.

Blockchain technology is revolutionary because it provides features not found in other technologies. It doesn’t solve all your computing problems and shouldn’t be part of every application. In fact, blockchain’s unique features address only a small subset of the many problems most enterprises face. Unfortunately, too many organizations choose to adopt blockchain technology and then try to find a place to put it. A far better approach is to understand what blockchain does well and then identify unsolved enterprise problems for which blockchain technology would be a good fit.

In this section, you look at some features that blockchain offers.

One of the unique strengths of blockchain technology is that it supports transferring items of value between entities that do not trust one another. In fact, that’s the big pull for blockchain. You have to trust only the consensus protocol, not any other user. Your transactions are carried out in a verifiable and stable manner, so you can trust that they are being handled properly and securely. This capability eliminates the need for a third party to act as a transaction broker. In today’s economy, most transfers of value include at least one intermediary, such as a bank, to handle transfer details.

Because blockchain allows entities that don’t trust each other to interact directly, it eliminates most middlemen. Whether you’re considering transferring money from one party to another or providing a product for payment, nearly all transactions need a middleman. Middlemen are entities such as bankers, importers, wholesalers, or even media publishers.

Blockchain makes it possible for producers to interact directly with consumers. For instance, artists can offer their art directly to buyers, without needing a broker or publisher. Eliminating middlemen either eliminates the fees paid for their services or replaces the fees with automated processes that greatly reduce costs, and these savings can be passed on directly to the consumer. Although blockchain transaction handling does incur a small cost, it's generally much less than what middlemen charge. That’s good for producers and consumers.

Lower fees aren’t the only benefit of eliminating middlemen. Any time you can remove one or more steps in a process, you increase efficiency. Greater efficiency generally means reduced time required for a process to complete. For example, suppose a musician decides to release her latest single directly to her fans by using a blockchain delivery model. Her fans can consume the new single the moment it drops. With a publisher, the content must be delivered, approved, packaged, and then finally released. Although the delay for digital media may be minimal, blockchain can eliminate any delays introduced by middlemen.

The contrast becomes even clearer when looking at delivering physical goods by using blockchain. If you buy strawberries from California, have you ever thought how many times they were handled before you got them? Lots of processors stand between you and the grower. Blockchain can reduce the number of people who participate in the supply chain for pretty much anything.

Another design feature of blockchain is its immutability. Because you can’t change any data, anything written to the blockchain stays there always. “What happens in blockchain, stays in blockchain.” Good news for any application that would benefit from a readily available transaction history.

Let’s revisit the strawberries example. You might go to the grocery store today and buy strawberries with a label that says “Fresh from CA.” You really have no idea whether the strawberries came from CA or perhaps Spain (the second leading exporter of strawberries). But with blockchain, you could trace a pint of strawberries all the way back to the grower. You’d know exactly where your strawberries came from and when they were picked. This level of transaction history exists for every transaction in blockchain. You can always find any transaction’s complete history.

Every full node in a blockchain network must maintain a copy of the entire blockchain. Therefore, all data on the blockchain is replicated to every full node, and no node depends on data that another node stores. If several nodes crash or are otherwise unavailable, other users of the application are unaffected. This resilience means that fault tolerance is built into the blockchain architecture. In addition, by distributing the entire blockchain to many nodes, which are owned by different organizations, you practically eliminate the possibility of one organization controlling the data.

Any application that benefits from high availability and freedom of ownership may be a good fit for blockchain. Many database applications go to great lengths to replicate their data to provide fault tolerance, and blockchain has it built right in!