Enterprise Blockchain Emergence- Hyperledger Fabric
The word “Blockchain” has gained it’s popularity with its use in Bitcoin. Essentially it has redefined how information sharing happens between stakeholders. Due to its key intrinsic characteristics like immutability & transparency, blockchain has widely found use cases across various industries.
What is Blockchain?
Blockchain is an autonomous append only system of records in which every transaction is linked with the previous transaction with a cryptographic hash.
Key Components of blockchain:
Shared Ledger: Append-only distributed system of record shared across business network.
Cryptography: Ensuring secure, authenticated & verifiable transactions.
Consensus: All parties agree to network verified transaction.
Smart contract: Business contract/terms embedded in transaction database & executed with transactions.
Modern applications involve two or more parties exchanging monetary values, a third trusted party is required to verify and approve the transactions. The third trusted party will make sure that all transaction is rejected or accepted and finalized. To enable a tech-based platform without the third-part intermediaries, the capabilities of blockchain and smart contracts can be leveraged.
There are many blockchain enabled platforms that allow using smart contracts, Bitcoin, Ethereum, Hyperledger Fabric etc., but they are not equally good for enterprise use cases.
Many blockchains smart-contract follow the order-execute architecture in which 1) transactions are first ordered and subsequently broadcasted to all the peers and 2) each peer executes on the transaction sequentially. The order-execute architecture can be found in virtually all existing blockchain systems, ranging from public ones such as Ethereum (with PoW-based consensus) to permissioned ones (with BFT-type consensus) such as Tendermint, and Quorum. The order-execute architecture requires transactions to be deterministic, which is difficult to ensure programmatically. Due to this limitation, it is difficult to guarantee the finality of the transactions.
Most of the blockchain platforms works on “One Size Fits All” principle so they are not suitable for various industry use cases, which require the flexibility to choose subset of permissioned participants to validate and approve the transactions. Enterprise blockchain use cases demand privacy, performance at scale, compliance & regulations. This is where Hyperledger Fabric and Chaincodes take a leap.
What is Hyperledger Fabric:
Hyperledger Fabric is an enterprise-grade, distributed ledger platform that offers modularity and versatility for a broad set of industry use cases. The modular architecture for Hyperledger Fabric accommodates the diversity of enterprise use cases through plug and play components, such as consensus, privacy and membership services.
Why Hyperledger Fabric?
One of the many compelling Fabric features is the “channels” which enables a network of networks. All the participants of a business network but certain stakeholders may need to maintain separate business relations and some of their data to remain private. For example, a purchaser may work with different sellers, selling the same product. The transactional relationship between the purchaser and each of the sellers should remain private and not visible across all sellers. This is made possible via the “channels” feature in Hyperledger Fabric if you need total transaction isolation, and the “private data” feature if you’d like to keep data private while sharing hashes as transaction evidence on the ledger (private data can be shared among “collection” members, or with a specific organization on a need-to-know basis.
Below are some of the key differentiating features of Hyperledger Fabric as compared to other distributed ledger technologies:
• Permissioned architecture
• Highly modular
• Low latency of finality/confirmation
• Open smart contract model — flexibility to implement any desired solution model
(account model, UTXO model, structured data, unstructured data, etc)
• Pluggable consensus
• Transaction processing in 3 phases:
endorsement, ordering, and commitment. This separation confers several advantages: Fewer levels of trust and verification are required across node types, and network scalability and performance are optimized
• Flexible approach to data privacy: data isolation
using ‘channels’, or share private data on a need to-know basis using private data ‘collections. Governance and versioning of smart contracts
• Flexible endorsement model for achieving consensus across required organizations.
• Security:
i) Permissioned network with strong Identity Management.
ii) Anonymous client authentication with Identity Mixer.
iii) Zero Knowledge Proof to prove that a secret satisfies certain properties without revealing the secret.
iv) Supports HSM for safeguarding and managing digital keys for strong authentication.