Wednesday, May 1, 2019

What You Need To Know About Ethereum and Hyperledger

In today’s financial space, blockchain is the talk of the town. Many companies are trying to incorporate blockchain technologies in their processes, thus the need for blockchain developers is increasing. Two of the most prominent blockchain technologies are Ethereum and Hyperledger. Before diving deeper into technical aspects of the two, there are some things that needs to be understood first.

Know what blockchain is

Imagine a database, but it has several copies across many computers and is encrypted using cryptographic keys. That is blockchain in a nutshell, as it stores data in blocks distributed in a network. Its first widely known use is in a cryptocurrency called Bitcoin, where every transaction is saved in a blockchain.

    Know the principles of blockchain
One of Blockchain’s key “selling” point is the use of consensus when submitting transactions, as data is verified by people in the network before a transaction enters into the blockchain. Another is immutability, meaning once a transaction is stored it can no longer be tampered or deleted. This is significant in the long run as this mechanism preserves records better than databases.

  Know the difference between a private and public blockchain

Let’s go with public blockchain first, as it was the initial idea of blockchain. Being public means virtually anyone across the world has access to the blockchain. Ethereum is public and is for general purpose such as cryptocurrency. One risk associated with this is high risk of being hacked by highly-programming-skilled criminals. To prevent this, transactions must be “paid” using cryptocurrency. In addition, Ethereum has a thing called “gas”, a second currency required so a transaction can go through.

Security concerns lead to the development of private blockchain. Instead of being worldwide accessible, transaction records are stored on a specific, limited network. This is where Hyperledger belongs, as it offers development tools for specifying own blockchain network. Private blockchains do not have cryptocurrency by default, but it can integrate cryptocurrencies from other platforms.

    Know the significance of blockchain in a use case

You might end up saying blockchain is cool, but this does not mean everything is “blockchainable”. Review and understand each aspects of a use case scenario. Once you have created an application design based on the scenario, think carefully if the principles of blockchain can benefit potential users of the application, or its disadvantages will make people “turn off”.

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