What is Ethereum?
Ethereum launched in 2015 as a much more scalable and
extensible version of the Bitcoin payment system’s underlying blockchain
technology. The Ethereum blockchain’s decentralized architecture—multiple
distributed nodes simultaneously running the software that creates an immutable
ledger —provides a network that is secure and operates without intermediaries.
The power of the Ethereum blockchain is in its unique
programmability. Agreements are embedded in the code so that transactions are automatically executed, and these digital agreements (or “smart contracts”) can
have limitless formats, conditions, and even call on other contracts.
This makes Ethereum useful not just for payment settlement,
but for arbitrating transactional events across financial services, trade
finance, supply chains, government registries, real estate, law, and many other
sectors.
11 Benefits of Enterprise Ethereum
Enterprise Ethereum is designed to be low-cost, open,
flexible, and offers the following qualities either natively or through
protocols built on top of the foundational blockchain layer:
- Data Coordination
Ethereum’s decentralized architecture better allocates
information and trust so that network participants do not have to rely on a
central entity to manage the system or mediate transactions.
- Rapid Deployment
Via an all-in-one SaaS platform, enterprises can easily
deploy and manage private blockchain networks instead of coding a blockchain
implementation from scratch.
- Permissioned networks
Using Ethereum, enterprises are able to form consortium
networks (private blockchains), in which privileged nodes can function as
gatekeepers or regulators. The platform allows granular contextual access,
meaning that only authorized individuals and applications can access data. This
ensures that the level and type of data accessed is appropriate to the role
responsibility of the employee.
- Network size
The mainnet proves that an Ethereum network can work with
hundreds of nodes and millions of users. Most enterprise blockchain competitors
are only running networks of less than 10 nodes and have no reference case for
a vast and viable network.
- Private transactions
Enterprises can achieve granularity of privacy in Ethereum by
forming private consortia with private transaction layers. Enterprises using
Ethereum can utilize parameters to allow participants to exchange private
transactions.
- Scalability and performance
With Proof of Authority consensus and custom block time and
gas limit, consortium networks built on Ethereum can outperform the public
mainnet and scale up to hundreds of transactions per second or more, depending
on network configuration.
- Finality
A blockchain’s consensus algorithm secures confidence that
the record of transactions remains ordered and tamper-proof. Ethereum offers
customizable consensus mechanisms, including Raft and Istanbul Byzantine Fault
Tolerance for different enterprise network scenarios, ensuring immediate
transaction finality.
- Incentive layer
Ethereum’s cryptoeconomic layers allow
business networks to develop mechanisms that both punish nefarious activity and
create rewards around activities such as verification and availability.
- Tokenization
Businesses can tokenize any asset on Ethereum that has been
registered in a digital format. This opens the door for new business and
incentive models, such as the fractional division of traditionally illiquid
assets like real estate or equity in private markets. Subsequent solutions
thereby enable a broader prospective investor base to access a variety of assets
with far greater liquidity and lower capital requirements.
- Standards
Ethereum has multiple open-source standards—including
protocols around token design, human-readable names, decentralized storage, and
decentralized messaging—that keep the ecosystem from splitting apart. For
enterprises, the Enterprise Ethereum Alliance’s (EEA) Client Specification 1.0
defines the architectural components for compliant enterprise blockchain
implementations.
- Interoperability and open source
Businesses operating on Ethereum are not locked into the IT
environment of a single vendor. Amazon Web Services customers, for example, can
operate private networks using a blockchain SaaS platform.
In the near future, the long-term value of enterprise
Ethereum will be realized through interoperability with the public mainnet,
which offers global reach, extreme resilience, and high levels of integrity.
Rather than replicating the infrastructure of a public chain in miniature,
enterprise solutions will maintain customizable privacy over transactions while
enabling data storage built on a shared, secure, and future-proofed IT
infrastructure.
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