Why is Hyperledger different to Ethereum and how?

Different blockchains

Why is Hyperledger Different to Ethereum and How?

The blockchain arena is with a gazillion options. There really is no one dominant technology in here. Instead, what you have are multiple options out there and they are as similar as they are different.

In this piece, we are going to try and compare two of them, namely Hyperledger and Ethereum.
There are key areas where the two blockchains differ. They are:

  • Design
  • Consensus
  • Cryptocurrency
  • Privacy
  • Resources

But, before we begin the comparison, let’s get introduced to both these blockchain technologies.

Design

Ethereum is a public blockchain with smart contract capabilities and many businesses build dapps (distributed apps) on top of the network. Essentially it is useful for mass consumption. It is also known as a public blockchain.

Hyperledger Fabric (as a framework) is a permissioned blockchain and modular in its architecture. It provides a lot of flexibility in terms of how information moves over the blockchain and what information will appear to some and not to others. This makes it ideal for enterprises.

Hyperledger Fabric provides a lot of flexibility in terms of how information moves over the blockchain and what information will appear to some and not to others. This makes it ideal for enterprises.

Consensus

The other major difference is the consensus Algorithm that is used on Ethereum vs Fabric. For now, Ethereum uses PoW (Proof of work), whereas with Fabric you can choose between No-op (no consensus needed) and pBFT (Practical Byzantine Fault Tolerance).

Byzantine Fault Tolerance
BFT or Byzantine Fault Tolerance refers to a distributed computer network’s ability to function as intended and arrive at a proper consensus correctly despite malicious components or nodes failing or sharing wrong data with peers. The goal here is to prevent major system failures by eliminating the influence that malicious nodes have on the proper functioning of the network and the proper consensus reached by the legitimate nodes in the network.

It’s called ‘Byzantine Fault Tolerance’ because it was derived from the Byzantine Generals’ Problem. It has been researched extensively and optimized with various solutions in practice and others that are still being developed.

Cryptocurrency

Different blockchains have different methods for members to participate on the network. Bitcoin incentivizes participants financially to solve complex mathematical problems (i.e. mining), which take time, computing power and energy.

In Hyperledger Fabric, participants work together around a common cause or goal—moving goods more efficiently, sharing patient data more securely, ensuring food safety and much more. These systems require far fewer resources, making them far more efficient for business.

Ethereum has a built-in cryptocurrency, Ether (ETH), and works well where applications have this cryptocurrency included in their apps, yet is not really necessary where use cases have no need for a cryptocurrency.

At this time, Hyperledger does not offer a cryptocurrency.

Different blockchains

Different blockchains have different methods for members to participate on the network

Privacy and permissions

Ethereum, as an ecosystem has matured and can be deployed as a private blockchain for a business. The inclusion of smart contracts and business logic is a huge advantage but when it comes to showing and sharing information across and between enterprise networks, it may not be as effective. In fact, some may argue that the total transparency that Ethereum offers comes at the cost of performance scalability and privacy.

Hyperledger Fabric solves performance, scalability and privacy issues using a permissioned mode of operation and specifically by using a BFT algorithm and fine-grained access control. Furthermore it provides a valuable toolset through its modular architecture that allows Fabric to be customized to a multitude of applications.

If you want a private blockchain where companies/persons that have permission to access information, you should consider Hyperledger Fabric instead of creating a private fork of Ethereum.

Hyperledger Fabric’s permissioned framework means that all participants in a blockchain network are known to one another, and in the case of a private permissioned network, membership may be by invitation only. This compares to permissionless blockchain platforms (like Ethereum), where network members can remain anonymous.

With Fabric, you have the ability to show certain bits of information as well as turn other bits off, or make that information to other parts of the network. Ethereum doesn’t allow something to be possible to one person and not visible to the rest. Hence why Fabric is suited for enterprises that want privacy of their transactions but also need to be known and trusted on the network.

Resources

Also, at the moment it is easier to find an Ethereum dapps developer than a Fabric developer. Fabric on the other hand is pretty new on the block and just warming up.

To conclude, we feel that in future most enterprise apps would get tilted towards Fabric, whereas Ethereum would continue to be a hotbed for dapps that are more B2C.

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