Enterprise Blockchains for Business are Taking Over for Reducing Costs and Increasing Efficiencies
Enterprise blockchain seems to be on the rise around the world, despite all the criticism against it. In a recent announcement made by IBM X-Force Red, the company mentioned that corporations are seeing ‘real efficiencies and cost savings' when it comes to blockchain technology. The statement also covered the launch of blockchain security testing service.
IBM also predicted that blockchain spending around the world would hit $9.7 billion in 2021, and it is not the only one to make positive predictions about blockchain. Even Forbes itself released an article in February stating that 2019 might become the year of enterprise blockchain. All of this indicates that there are high hopes for the new technology, its development, as well as its acceptance by corporations.
However, not everyone agrees, and there are numerous critics who claim that there is no need for enterprise blockchain. They even tend to question whether such investments are warranted, which puts a lot of companies in a serious dilemma. On the one hand, they do not want to fall behind the competition. However, they are also fearful of investing in new technology as its future is still unclear.
However, while a number of corporations have expressed interest in the blockchain, some of which stated that they do not even consider whether it is worth switching over to or not, a lot of the comments indicate that the dilemma lies in the debate regarding enterprise blockchain and public blockchain.
What is the Difference?
Public and enterprise (private) blockchains share a number of similarities, such as consisting of distributed P2P network which is governed through a consensus protocol. They are both much more secure than any other type of similar technologies, and they also provide immutability of their networks, which prevents data tampering and manipulations.
However, there are several key differences between them as well, the biggest one being that public blockchain is accessible to anyone with a computer and an internet connection. On the other hand, private (enterprise) blockchain can only be used by those who receive access to it.
This makes enterprise blockchain a bit more centralized, but it also offers benefits, such as not needing large amounts of computational power to reach consensus on the network. These are permissioned blockchains, which means that only those with permission can participate or see data stored on the blockchain, which makes it even more secure and private.
The permissioned process varies from one network to another, and there are several ways to decide who gains permission to access it and who does not. Such strict rules regarding who participates on the blockchain directly lead to little to no anonymity, which is in compliance with KYC regulations. As mentioned, this leads to more security, as well as lower operating prices, as there are no vast amounts of transactions which are encountered on public chains.
Numerous corporations have already tested enterprise blockchain, and many have implemented it into their systems, such as R3 Corda, Everledger, Hashgraph, Quorum, and Hyperledger. Even some banks have ‘gone blockchain,' including the Royal Bank of Canada, Goldman Sachs, and Santander.
Enterprise blockchain opponents
As mentioned, not everyone is a fan of the blockchain, and some have taken quite a cynical stance toward it, such as the international consulting company McKinsey & Company. In their article, they criticize the technology's influence, stating that it is still too early for it to be a game-changer that everyone thinks it to be. Further, they claim that there is still no practical, scalable use for blockchain, despite billions of dollars that were invested in this technology.
One Bitcoin developer, Jimmy Song, also stated that enterprise blockchain does not make sense. Abra's CEO, Bill Barhydt said the same, criticizing the closed-off blockchain.
It appears that, while many remain against blockchain technology completely, even many of those who support it want it to be permissionless, transparent, and open to everyone. Meanwhile, blockchain itself still has a lot of challenges to overcome, and a lot of issues to solve before the companies decide to massively turn to this technology.
Another popular opinion is that blockchain needs a few more years of development, so that new and improved algorithms can be developed, and that businesses who integrate blockchain at this point in time will have to change everything about it once the new solutions arrive. With that in mind, it is possible that the blockchain platform that will dominate the future still doesn't even exist. Until it becomes clear which design will dominate the world of business, it is unlikely that blockchain technology will enter the mainstream, particularly when it comes to its permissioned versions.