Private blockchain is also sometimes named as DLT (Distributed Ledger Technology) but it’s not 100% correct. In fact, term DLT (Distributed Ledger Technology) can be applied to all solutions that use distributed ledger as a data storing model, while Blockchain is an example of this “block-based” model. If we take a deeper look at DLT (Distributed Ledger Technology) – it's a database that shares, replicates, and synchronizes data flow (geographically) beyond multiple nodes (sites) or other instances. There is no centralized principal entity or data storage.
A consensus mechanism and related algorithms are required along with the peer-to-peer system to guarantee replication across instances or nodes is undertaken. So, in this case, private (mainly) or public blockchain solutions are only one of the ways of realization of distributed ledger design. Comparing private and public blockchain models generally is all about access and permissions, this is why private blockchains are also known as permissioned blockchains.
When we mention private/permissioned blockchain networks, first what we pay credit to is identity, because we need to know who is the participant of the private blockchain network and define a set of rules for data access for that participant to know what kind of actions they can perform to the ledger and what data could be available for them from the ledger.
Most known private blockchain platforms are:
Hyperledger Fabric (in participants with IBM) - permissioned/private distributed ledger platform and framework for building decentralized applications and solutions.
Corda - provides business tools to enable straight transaction flow in the stern privacy layer using smart contracts, decreasing transaction fees and record-keeping expenses.
IdeaSoft has experience with a lot of business-grade use-cases dealing not only with logistics but with insurance, oil distribution, machinery closed financial platforms, governmental IoT solutions. Decentralized ledger technology is valued for flexibility that enables us to build industry acknowledged large scale solutions with fast forward integration process no matter is it Cord, Hyperledger Fabric or any other.
What’s called a public blockchain is a network that is accessible by all users. What is meant by accessible? Usually, it means that everyone can write, read, participate or in any other way interact - based on particular blockchain networks functionality - with a public blockchain. All public blockchains are decentralized and no one among the users gains control over the blockchain network. They could be sure that data and transactions are immutable since they got validated in the blockchain network once.
Regularly public blockchain anticipates all crypto currencies, such as Bitcoin, Etherum and tokens based on its network, USDT, Bitcoin Cash, Litecoin and others.
What is a cryptocurrency?
It is a digital asset created to work as a mechanism of change that uses robust cryptography to ensure financial transactions, manage the production of supplementary units, and verify the transaction of assets. Cryptocurrencies generally work with decentralized authority as opposed to banking systems or regular currencies that are centralized.
But things are not always painted black or white here. There are some public blockchain networks (e.g.: Ethereum) that can be applied to build permissioned flow and scenarios to control access to the data. Use of smart contracts architecture to create permission model and build an identity management system, for example - could be a perfect case for blockchain development.
IdeaSoft has experience with building solutions in financial, insurance and other industries with public blockchain networks as assets or payment providers. Usually, these solutions are used to grant easy and fast ways to pay for some goods or operate with asset management. We worked with those well known public blockchain networks like Bitcoin, Etherum, Stellar, USDT and others.
Another way to operate with blockchain-built networks is developing trading platforms. Development of such platforms (i.e. cryptocurrency exchanges and OTC desks) is one of our key knowledge, no matter whether it is centralized, hybrid or even a decentralized cryptocurrency exchange platform with a full batch of common and professional tools.
Smart contracts are one of the main killer features of blockchain solutions. Let's look deeply into what it is and what benefits it provides to the business.
First of all, any smart contract is a special blockchain-based or alternative protocol designed to digitally expedite, verify or implement a negotiation or some kind of execution of a contract. Distributed smart contracts are based on so-called dApps (decentralized applications) - distributed server-client applications that are run decentralized systems and allow achieving trustworthiness of transactions without any third parties entities. Transactions are 100% trackable in the decentralized blockchain and immutable.
Smart contracts architecture allows adding features to be made partly or completely owned and auto-performed or enforced, or both. The main goal of smart contracts is to implement a protection layer that would serve as a better means of regular negotiation basis and help diminishing transaction expenses associated with process negotiation. Many crypto currencies have executed some types of a smart contract.
Smart contracts could be helpful in such processes as assets exchange, property law, management of company shares or other values in a conflict-free and fully transparent way without a middleman.
Not only removing middlemen is a motto of smart contract usage. Smart contracts as well can define the negotiation rules and fines about an agreement in the way identical to a regular contract flow. A smart contract though can also automatically execute, operate and manage the defined commitment.
The best known platform to run smart contracts is Ethereum. Ethereum is a public blockchain network/platform that was built specifically for executing smart contracts. The so-called Etherum smart contract is a special code that is running on Ethereum through EVM (Ethereum Virtual Machine). Etherum smart contracts are developed with a special Ethereum language – Solidity.
IdeaSoft works not only with Etherum smart contracts but with a lot of different private and public networks: NEO, Hyperledger Fabric, Stellar, Corda, Ambrosus, EOS and etc. Using our expertise we could choose a better solution for every customer based on the business model, assets type and local regulations.
When public blockchain need some dramatic changes to their architecture, so it should be a new branch of the public blockchain network, and creation of this brach usually called Let's take a look at something hard fork or hardfork is?
It is linked to blockchain tech, as we mentioned previously is a fundamental difference to the blockchain rules that makes earlier invalid blocks or transaction valid and vice-versa. Usually, hardfork needs all peers, nodes and/or users to update to the moders version of a blockchain.
It is not only one case when a hard fork is needed:
No matter what case of hard fork it is always going the same: one part of the blockchain reflects updated blockchain network, and the other part remains the old one. Hardfork includes dividing the routeway of a blockchain network by revoking transactions approved by all nodes that have don't updated to the new protocol version. One of the most famous hard fork examples is a hack on the DAO (decentralized autonomous organization).
So, how it was on 17th June token funds from The DAO, which was built as a decentralized funding platform for The Ethereum projects (dApps), were hacked and then drained on hackers (group or person) account. Following various so-named "white hat" strikes planned to move the remaining tokens to accounts managed by the first fund's holders, their efforts were tried to restore the tokens or get a different way of action.
The hardfork of the Ethereum network transferred the tokens attached to The DAO to a next smart-contract developed to give the initial fund's owners ability to withdraw assets.
IdeaSoft uses hard forks as a powerful instrument to develop own blockchain network which could be based on some common network with unique adjustments, that previously not supported by original network developer. For example, it could be the change of consensus mechanism like we did for Dash and Tarraf.
MMain problems of blockchain networks - especially public ones - fall into scalability. Scalability has become the key point since the main part of public blockchain networks are designed to cover financial needs.
For example, Visa can handle around 24,000 transfers per second and 150 million each day, PayPal is recognizing up to 200 transfers every second and more than 5 million per day. Ethereum blockchain network can process up to 20 transactions per second nowadays. This makes the necessity of exponential up-scaling of Blockchain network platforms obvious.
If we are talking about private blockchain networks with the progression of the 4th Industrial Revolution technologies, we are to mention IoT (Internet of Things). It is meant to operate on top of Blockchain networks because of security, distribution, robustness, stability, delivery, glassiness, anonymity and reliability.
And that is where the scalability problem appears as critical, for example, centralized solutions of IoT transactions operate with millions of them now and it should be said to be a large capability issue when IoT based solutions gets connected to Blockchain platforms and decentralized systems, since transactions amounts per second are very limited.