The Best Blockchain For Your Business
Blockchains are a powerful concept. They are decentralized trustless peer-to-peer networks enabling the participants to transact without trusting anyone in the network. Transactions performed on the Blockchain are grouped together in blocks which are then chained together using cryptography.
Blockchains are here to solve a fundamental problem in our society which is the need for an individual to trust a third party with their money or valuable data.
So, you have decided that you are going to incorporate blockchain to streamline your business process. Now you need to decide which platform you need to build upon. The Blockchain technology domain is one of the fastest-growing and the most unpredictable areas to work in. After the advent of Ethereum, countless other public Blockchain platforms have propped up claiming to be better than it, the same is true for private/permissioned Blockchain platforms. When you think about implementing Blockchain technology in your business, you are overwhelmed by the number of options there are to choose from. This article is going to help you make a better and more informed decision.
Permissionless or Permissioned
First and foremost, you have to figure out which parties will have access to read and write data in the Blockchain. The questions you need to ask yourself are:
- Do you need it to be open to anyone?
- Do you need the data to be public?
- Will the Blockchain be open to anyone to write?
- Do you need a cryptocurrency or crypto-token?
If you answered "yes" to all of them, what you are looking for is an open permissionless Blockchain platform. If you answered "no" to at least one of the above questions, you might need a permissioned platform.
Public or Permissionless
Open/Permissionless Blockchain platforms are exactly what they sound like. They are public and open for anyone to read and write data. The community collectively owns and maintains permissionless Blockchain platforms. Permissionless platforms are plagued by scalability problems as they have to sacrifice speed and efficiency for decentralization and security.
They typically have a native token that is used to incentivize the participants in the network and can also be used as fuel to run computations on the platform.
Some of the well known public Blockchain platforms are:
To read about these platforms in more detail, click here.
Some of the use cases of a public platform are:
- Supply Chain management
- Real Estate
- Digital Identity
- Food safety
- Cryptocurrency & Fungible/Non-fungible token
- Asset Tokenization
A blockchain which is open to be read by anyone, but has limitations on who can write data to it. They are comparatively less decentralized and are typically owned collectively by a group of organizations to bring transparency in their processes. By design, they are faster and more efficient than their permissionless counterparts because of relative centralization.
Some of the use cases of the public permissioned platforms are:
- Supply chain management
- Personal health records
- Digital identity system
A Blockchain which is not open to being read by anyone, and is also limited to a certain number of participants who can write to it. They are the most centralized variant of the technology and anyone or multiple organizations can own them.
Some of the use cases that the private permissioned Blockchain platforms are:
- Inter-department communication
- Inter-organization supply chain
If you have decided to go with a public Blockchain platform, then you need to decide the platform which will fulfill your resource appetite. The questions you need to ask yourself are:
- Will your users be doing a lot of transactions on the Blockchain?
- Are fast transaction confirmations essential to the success of your project?
- Will you be storing a lot of data on the Blockchain?
- Would you rather prefer to pay the gas on behalf of your users?
Scalability issues have plagued Blockchain platforms today. There is something called the "Scalability Trilemma", a term coined by Vitalik Buterin (Founder of Ethereum), referring to the tradeoffs that crypto and Blockchain projects have to make. The three components are decentralization, security, and scalability. That is to say "you can't have everything". There are tradeoffs that you have to make between these components. Therefore, there are only two things that you can have at the expense of the other.
If you answered "no" to the above questions, then this probably means that your use of Blockchain is minimal. In that case, you should go with a platform with a proven track record of reliability.
These platforms can include:
- Bitcoin, in some cases
If you answered "yes" to at least one of the above questions, then this probably means that your project is resource-intensive, and Ethereum won't do the job. You are looking for a platform that can handle and confirm a lot of transactions per second.
In that case, these platforms will do the job:
But you have to keep in mind that the projects that claim to be scalable enough to process thousands of transactions per second are usually making some tradeoff on either decentralization or security of the platform.
Read more about it here.
The security is probably the most important aspect of the Blockchain platform that you are ultimately going to use. You need to ask yourself:
- What's the security of the underlying consensus algorithm?
- Have you tested the consensus algorithm in production?
- Has the code been peer-reviewed and audited?
If security is your utmost priority, then you have no other choice than going for the Bitcoin Blockchain, you can harness the security of the most popular Blockchain platform in the world. Bitcoin Blockchain has limited functionality. If you want to go for a platform that offers more control and lets you build more complex smart contracts, then Ethereum is an equally good choice.
- Is your project more suited to be built on a permissioned platform?
- Does your project target a specific Blockchain use case?
There are quite a few Blockchain platforms that target a specific use case.
- Hyperledger Indy - Digital Identity
- Hyperledger Grid - Supply Chain
- Corda & Quorum - Financial Applications
Since Blockchains are still fairly new, having a vibrant and resourceful developer community around that platform will enable your engineering team to get help in the time of need. Certainly, the skilled developers in the community and the resources available online will enable them to build your product in a better way. The questions are:
- How big is the current community around that project, or will it be in the coming years?
- How responsive is the community in providing feedback and support?
Since Bitcoin and Ethereum have been around the longest, they have the most vibrant and resourceful community. But other platforms are catching up fast.
Finally, you need to judge the changing trends of the Blockchain world and which platforms are going to win in the long run.
- Will it support communication with other Blockchains in the future?
- Are they actively working on increasing the transaction throughput without compromising on security or decentralization?
- What are their plans to attract more DApp developers in the future?
- What other future upgrades do they have in store for their users?
- Do you foresee a big enough developer community around that project?
These questions will help you make better decisions.
Still unsure about which Blockchain is best for your business needs? Talk to a Blockchain expert from Xord here and get FREE consultation on choosing the best blockchain solution.