In this blog post
Let’s start with blockchains, since that has been around the longest. Simply stated, a blockchain is a digital ledger containing all transactions occurring in the network. Blockchains are primarily used to record transactions, and to trade/track assets. The assets may be tangible or intangible and can be cryptocurrencies, medical records, supply chain transactions, intellectual property etc., enabling them to cater to a wide range of industries.
Transactions recorded in blockchains are tamper-resistant since they are encrypted, digitally signed using complex hashing algorithms (ex: SHA256, RIPEMD – 160, MD5) and stored as timestamped and immutable units in digital blocks. Different blockchain networks use different hashing algorithms. The blocks of transactions are linked together chronologically and stored across multiple computers, with data synchronized across locations. Hence, the technology underlying blockchains is referred to as Distributed Ledger Technology (DLT). All permissioned members of the network can access the records and see a single version of the truth at any time.
Participants of the network validate transactions based on consensus protocols (ex: Proof of Work (PoW), Proof of Stake (PoS), Practical Byzantine Fault Tolerance (PBFT)) and manage the network without involving a central authority. The validations are done by ‘miners’ who earn a ‘reward’ for successful validation, since the process is computationally complex and mining systems consume a lot of energy. These core features enable blockchain technology to deliver on the promise of trust, accountability, and transparency. It has tremendous potential to disrupt traditional ways of storing, handling, and securing transactions.
DLT Platforms
As we have seen, blockchains are based on DLT. There are several DLT Platforms today that allow the development of distributed ledger-based applications. Here is a quick look at a few popular DLT platforms including the one used by GS Lab | GAVS.
Some important criteria to choose your platform are:
- Network architecture supported (ex: Public/Private, Permissioned/Permissionless)
- Consensus protocol used
- Support for Smart Contracts (rules executed automatically that validate, trigger, or enforce specified actions/conditions on transactions)
- Scalability as required by your DLT applications
- Other factors include performance, cost, data security, ease of use and management
Hedera Hashgraph – Using DAG (Directed Acyclic Graph)
Like Blockchain, DAG is another type of DLT, but with some important differences. Unlike a blockchain which is a chain of blocks of transactions, a DAG is an acyclic network of individual transactions. In DAG the transactions validate each other, eliminating the costs involved in mining such as mining systems, miner rewards, energy consumption, etc. DAGs are much faster and scale very efficiently due to the lightweight structure and validation process. DAGs however are more vulnerable in low transaction volumes and not suitable for high levels of decentralization.
The Hedera network based on DAG is a public, permissioned network. It has a highly secure and distributed database that everyone can read from and write to. While currently permissioned and run by the Hedera Governing Council, consensus nodes will be permissionless – able to be run by anyone – in the future. The public ledger is stored on the Hedera mainnet, a network comprising consensus and mirror nodes. Transactions on Hedera are immutable and verifiable. It is the only public ledger that uses hashgraph consensus, which is a secure alternative to blockchain consensus mechanisms.
Hedera has very low latency and delivers a high throughput of 10,000+ transactions per second today. Hedera network services are a set of APIs that allow you to create accounts, mint tokens, write data to the ledger, call smart contracts and other functions. Hedera token service offers organizations an opportunity to embrace the disruption of public distributed ledgers for payments in a secure, compliant, and performant manner.
Holochain
Image Source: 101blockchains.com
Holochain is an open source framework based on peer to peer DLT that works differently from blockchains. It’s wide range of use cases makes Holochain a valid alternative to Ethereum, which is also a dApp (decentralized application) platform. While blockchain is ideal for systems that require global consensus, holochain is suitable for systems that can work without the need for a global agreement. It offers better scalability, adaptability, efficiency, and extensibility.
Holochain uses three key cryptographic technologies – Hashchains, Cryptographic Signing, and Distributed Hash Table (DHT). DHT affords great value to the ecosystem through eventual consistency and safe propagation of data through the network, ensuring that each peer is made accountable for their activities on the network. Holochain uses Go programming language, while apps can be written in JavaScript or Lisp.
Quorum – Used by GS Lab | GAVS
Quorum is an Ethereum based DLT platform that enables enterprises to grow and operate blockchain networks at scale. It provides a permissioned implementation of Ethereum which supports transaction and contract privacy. Quorum Blockchain Service (QBS) is a fully managed ledger service.
Key Features of Quorum
- A permissioned blockchain
- Networks using Quorum not open to all
- Only between participants pre-approved by a designated authority
- Network and peer permissions management
- Ensures data confidentiality – a crucial factor for financial institutions
- Introduces on-chain public and private transactions
- Enhances transaction and contract privacy
- High performance
- Can carry out more than 100 transactions per second
- RAFT consensusfor fault tolerance
- IBFT consensus for Byzantine fault tolerance
- Faster Proof of Work consensus
- Voting-based consensus mechanisms
- Eliminates additional transaction costs through usage of gas
- No cryptocurrency costs associated with running transactions
- Many tools available for the Quorum ecosystem
- Provides enhanced user and developer experience
- Eliminates the hassles of network governance and management
GS Lab | GAVS is committed to enabling enterprises to utilize the power of blockchain technology towards their business needs using a step-by-step approach. We start with an initial blockchain framework implementation for Master Data Management (MDM) that can be leveraged for other needs like data security, regulatory compliance, consent management, and master data governance. We then extend the framework to cater to B2B and B2C use cases. You can find more information on our blockchain services here.
Please Note: Content in this blog may have been taken from different online sources and mentioned where possible. The aim of these technical blogs is to provide consolidated information on a topic, before delving into GS Lab | GAVS specifics/inputs.
