Blockchain is revolutionizing the way global businesses operate. It’s the hottest buzzword in boardrooms around the world. But for financial transactions, blockchain for enterprise is not infallible because decentralized platforms are not monitored by any central authority. So a theft or loss might never be fully compensated.
Still, as Thomas Jefferson once said, “With great risk comes great reward.” After all, blockchain has the potential to do far more than count coins.
Blockchain for Enterprise
The right blockchain platform for your enterprise can:
- Smooth logistics
- Simplify trades
- Organize and track contracts
- Transfer sensitive patient medical information
- Improve traceability — which is particularly useful in the hazardous materials sector in the US or in pharmaceutical supply
- Monitor financial transactions, of course
We can also imagine it’s useful for government processes, particularly voting verification.
So today, our goal is to help you choose which platform might be right for blockchain for enterprise purposes, at least for your organization. We’re not here to make a choice for you or pitch a specific platform. Instead, we’ll cover the key criteria you should consider before selecting a platform. Then we’ll discuss a few popular blockchain platforms and compare them.
Finally, we’ll shift gears and dig a little deeper into sustainability and energy use because all these blockchain servers use power to operate, and they need to be housed in a cool location. This energy use can have significant impacts on your company’s overhead and social reputation.
But getting back to blockchain for enterprise platforms, let’s start with a checklist of key points to consider when shopping around.
Key Points to Consider When Selecting a Blockchain Platform
Every organization has different needs. You’re looking for a platform that balances these qualities:
- Centralized vs. decentralized — A decentralized platform’s biggest strength is redundancy. Centralized blockchain platforms might sacrifice some redundant data storage to achieve a better price per transaction or speed.
- Performance — Decentralized systems are usually much slower than centralized platforms.
- Actual cost — Some platforms claim to be free but aren’t, especially for commercial applications.
- Development tools and support — The amount of support a platform provides directly relates to your developers’ productivity and ability to launch new applications quickly.
- Maturity — Established blockchain platforms usually boast better interoperability and have a bigger population of experienced developers.
- Smart contracts — Your enterprise might benefit from automation or programmability in contract creation and storage.
Keep these in mind as we introduce you to a few platform options.
Platform Options: Blockchain for Enterprise in 2021
Here are a few popular blockchain platforms to consider. We don’t speak on their behalf, but we believe they are among the most exciting choices in 2021.
Ethereum is one of the older, more established platforms. We like it for that because older platforms are more difficult to attack or alter. It provides a decentralized blockchain comparable to Bitcoin. Its key strength for enterprise markets is support for smart contracts. Key weaknesses include higher transaction processing costs and slower processing times.
Besides its role as a platform, it has its own cryptocurrency: ether.
- The Ethereum platform is gaining popularity among programmers who build decentralized applications (dApps).
- This means a population of technologists will be ready to help solve your problems in the future, or an app may already exist.
- It has a mature ecosystem of tools for writing smart contracts.
- But it’s not the fastest horse in the race.
- Other blockchain networks operate faster and at a potentially lower cost.
It also has an active developer community and plenty of corporate interest from the likes of Microsoft and JP Morgan. With friends like these, we can imagine a future where Ethereum becomes closely monitored by governments and the IRS and eventually too big to fail.
IBM offers a private, decentralized blockchain platform. Rakesh Mohan, IBM’s development director for blockchain solutions, says it’s ideal for enterprise clients who are “less risk-averse.” (There we go with that risk-reward thing again!) Mohan says he sees promising opportunities for organizations using IBM Blockchain to link into enterprise cloud and their traditional “legacy” tech more seamlessly than other decentralized networks.
IBM claims it’s invested in a user-friendly interface to simplify critical tasks, like setting up, testing, and rapidly deploying smart contracts.
R3 Corda (We Call it Schrödinger’s Platform)
R3 Corda uses a different mechanism in which transactions are linked but not periodically batched into a block like a “traditional” blockchain. So it’s “both a blockchain and not a blockchain,” as per the official Corda website. (Thus the Schrödinger reference; here’s a video about his imaginary cat.)
The primary benefit of R3 Corda is real-time transaction processing. This can improve performance or speed compared to other platforms, but it’s neither the cheapest nor fastest option.
Proponents of R3 include HSBC, Bank of America, Intel, and Microsoft. Rakesh Mohan of IBM believes it will be a game-changer for the insurance industry. Still, it faces significant competition from other networks that process transactions faster and cheaper.
Stellar is a newer platform optimized for decentralized finance applications, and we love their snazzy website. This platform uses the Stellar Consensus Protocol, which will supposedly speed up the process and finalize transactions of a public network.
It includes security mechanisms for shutting out bad math or questionable actors in a financial transaction. If you read the first blog in this series, you’re already aware of how important that feature could become.
In 2021, organizations are using Stellar for international trade and exchanging money across borders quickly and cheaply.
So far, we’ve discussed some criteria you should consider when selecting a blockchain platform for your organization, and we’ve introduced you to a few notable players in the game.
Now it’s time to switch gears and think about sustainability and climate issues associated with blockchain for enterprise (and blockchain overall). We glossed over this lightly in our last piece, but if your organization needs to present an environmentally friendly “green” face, this is a point worth bringing up in the boardroom.
Climate, Sustainability, and Blockchain for Enterprise Use
Some proponents of blockchain claim it will help us tackle climate change. The idea is that governments, organizations, and individuals can be rewarded for behaving in a climate-friendly way. Of course, we’ll need to monitor them before we can hand out those rewards, and we’ll need to create an organization to do so.
We’re talking about regenerative agriculture at the macro-level — the notion that colossal factory farm operations and agricultural communities can be incentivized to reduce their carbon footprints. Plant more trees, avoid chemical dumping mishaps, keep your satellite-monitored soil data up to par, and your community or organization will earn a relished reward! Maybe it’s cash, maybe carbon credits. Perhaps it’s something yet undefined.
And, okay, we can dig that. But we’ve got some questions.
- Who becomes the authority? Which organization decides how much improvement is needed, and by whom?
- Will it end up like our current situation with the Kyoto Protocol of 2005, with developing nations given free rein while industrialized nations are restricted?
- Will China be similarly above restriction, even though it’s an industrialized nation?
Next, we consider the reality of energy consumption used to power, house, secure, cool, and maintain the servers for this kind of enormous application.
Who Will Pay for That Much Data Storage?
Server rooms get hot. They’ll need extensive cooling. Just ask Google! We know that as of 2014, Google was spending $5 billion per quarter on server maintenance — and that’s before the internet use balloon caused by the COVID-19 pandemic and the resultant work from home/learn at home movement. We cannot imagine the resources needed to maintain a blockchain of global soil data for eternity.
Now, the way blockchain works, individual users can supply nodes to house that data and earn compensation. That’s what crypto “mining” is all about.
But it doesn’t matter if you spread 100,000 servers over 100,000 locations or put them all in one building — they’ll need electricity and climate control. Our imagination reels! Because eventually, it will become the social responsibility of persons — both organizations and individuals — in advanced countries to maintain their portion of dedicated servers to further the cause. Plainly put, this cost will be placed on everyone. We’ll all have a vested interest in putting pressure on businesses to behave in specific ways.
This Sounds Like Really Bad Science Fiction
It sounds like bad sci-fi, worse than Star Trek: The Animated Series.
But is this the reality you want for the future of your enterprise?
Think about it: as developing nations eventually find their way to industrialization or discover their pathway to wealth, all the numbers only get bigger. Historically, wealthier populations tend to breed less (though that’s not explicitly true), and they live longer. More people need more food and more energy. As a growing and aging population needs more this and more that, and the blockchain ledger gets longer, the system cripples itself.
(Unless we can perfect a truly clean, cheap, endless power supply.)
Ultimately, we think these various blockchain platforms hold considerable promise for big business, but look at the entire impact. What say you?