Crypto Academy Week 9 - Homework Post for @alphafx

The ethereum blockchain is an open source blockchain that is built on decentralization ; like most blockchains . In a public blockchain like the ethereum blockchain, transactions are recorded or updated and every node of the blockchain has an un-alterable copy ; even in the even of alterations, majory of the nodes will reject it and this makes it a very secured avenue for transactions , hence its wide application in cryptocurrency. Hyperledger on the other hand is a private blockchain. What it means is that only a few people participate; It may be the members of a company or anyone they invite.

Let us look at some similarities between these two blockchain platforms.

DECENTRALIZATION: Both blockchains operate using a decentralized ledger system where by every node has a copy of transactions .It means information or transactions are not controlled by a single player . This helps to make the platforms a lot secure and safer as cyber criminals won't be able to target the blockchain easily because of the level of distribution.

The ethereum blockchain is more decentralized than the hyperledger partly because the hyperledger is private and permissioned ; it regulates the number of nodes .

THEY BOTH TRY TO SOLVE THE DOUBLE SPENDING PROBLEM :

One loop hole of digital currency is the "double spending problem”. This is when one particular unit of a currency is used more than ones . Criminals exploit loop holes in the blockchain structure to get into the system and divert funds but both the ethereum and hyperledger blockchains take away most of those fears as the blockchains uses a universal ledger system that gets updated upon every transaction.

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THE USE OF SMART CONTRACTS :

Smart contract is a systematic program or order of transaction which is meant to automatically carry out, regulate or sort out events and actions according to a predetermined agreement. For instance a smart contract may be made to make funds continuously available for the tuition fee of one's ward on a yearly basis once a particular limit or requirement, like age , is met. Ethereum supports the use of smart contracts for inputs. For the hyperledger, it is alternatively called a “chain code” ; it is technically a smart contract itself . Smart contracts helps to make the digital space automated and efficient as codes could be made to regulate future events .

Let us take a look at some of the differences between the ethereum blockchain and the hyperledger.

PRIVACY:

Consider two people,say Mary and Mercy, engaging in a trade;at an unusual price tag, and Mercy does not want her other trade partners to know that she is trading with Mary.

Which blockchain would you recommend that Mercy uses? The best blockchain for Mercy to use in this scenario is the hyperledger .Ethereum is a public, permission less blockchain where all the transactions are visible to every node in the system but that is not the case in hyperledger as hyperledger prioritizes privacy and confidentiality.

PROGRAMMING :

The ethereum blockchain uses smart contracts written in “solidity” whereas the hyper ledger uses a special kind of smart contract referred to as chain codes written in “Golang”; a unique programming language formulated by Google. The use of programming languages helps to open up more applications for these blockchains.The etherium blockchain for example , creates a platform(DApp )for software developers and programmers to come together and bring out innovations for the betterment of the society.

CRYPTOCURRENCY:

Crypto currencies are digital currencies based on the cryptography technology. These currencies are decentralized and have proven to be a very secure means of exchange as it reduces the risk of theft and fraud aided by the advent blockchains; since it is a virtual currency . the availability of a built-in currency is one major difference between ethereum and the hyperledger blockchains . Ethereum has a built in cryptocurrency known as the ether(ETH) while hyperledger does not have such.

The implication of that is that the ethereum blockchain is going to find more relevance or a wider range of application because of the surge in the demand for crypto currencies.

NATURE OF THE BUSINESS :

Certain blockchain technologies are more efficient in certain business set-ups. For instance a blockchain technology of higher degree of anonymity is necessary when dealing with businesses directly but when a business offers services directly to the customers , then a more transparent blockchain will be needed. Sometimes an appropriate combination of different blockchain platforms is best . that is, in the processes that involve doing business with other companies ; like sourcing for raw materials , can be done with a private blockchain platform like the hyperledger and then processes that involve doing businesses directly with consumers should be done with a very transparent system like the ethereum blockchain. In summary , if a transaction is a business-to-business(B2B) type, hyperledger is best, but if it is a business-to-customer (B2C) kind of transaction, then the ethereum blockchain is best.

PEER INVOLVEMENT:

The ethereum blockchain , because of its open source design,it involves and informs all the nodes in the network about every transaction that takes place in the network. If, for example ,Mathew initiates a trade on the ethereum blockchain ,every other node in the system will be involved or alerted of the changes but when Mathew is dealing with the hyperledger blockchain, the other nodes are not involved because of the unique nature of the blockchain so Mathew does not need to worry about other nodes being aware of his private transactions.

SPEED OF VALIDATING TRANSACTIONS:

In the hyperledger blockchain, each node or a group of nodes perform different functions that help to improve the speed at which transactions are done or validated unlike in an ethereum blockchain where all nodes in the network perform same functions thereby making it difficult for fast decision making.

EASE OF USE:

Because of the simplicity of the solidity programming language; it can be learnt in a week, compared to Golang; which is the main programming language for hyperledger , the ethereum blockchain is easier to learn and operate .

HIGH COST OF OPERATION:

The ethereum blockchain charges the members of the network for every transaction made. This was aimed at tackling malware attacks or attackers as in a long run ,the cost of infiltrating the system and reaching all the nodes; since a scam must involve gaining access to every node, will become very high and so it is believed that that will help to reduce if not eliminate malware attacks.On the other hand, using a platform like hyperledger eliminates those “gas price” as it is deemed unnecessary because the system is private and so only trusted people or nodes are allowed into the system.

In conclusion, both the ethereum and hyperledger blockchains are great blockchain platforms . The choice of which to go for depends heavily on the type of transaction involved. Just as stated earlier , if a company intends to do business with another company, the best platform is the hyperledger but when the businesss is between a company and the direct consumers then the ethereum blockchain comes into play. Also, the infrastructure needed to ensure a secure transaction should be put into consideration which includes the services of cyber security professionals because criminals are always looking for faults in the system and as we know, the cyberspace is not a hundred percent safe no matter the blockchain technology employed.