Insolar is blockchain 4.0, and that’s not just a buzzword. Blockchain 1.0 (Bitcoin) was designed for P2P transactions, blockchain 2.0 (Ethereum) introduced business-oriented smart contracts, and blockchain 3.0 (EOS, Ziliqa, etc) aimed at improving scalability with sharding, higher transaction speed capacity. Nevertheless, the latter two generations failed to embrace the complexity of business processes. So far, the logic behind most DLT platforms makes them valuable for some use cases, but a poor fit for enterprise, for three reasons.

First, storing the whole ledger on every node and running all smart contracts simultaneously limits block size capacity and CPU power. Blockchain 3.0 introduced sharding as a technical solution to this, but failed to enable on-chain document storage and processing, which is an essential part of any business workflow.

Second, each blockchain protocol is governed by a single consensus algorithm. In addition to obvious shortcomings (PoW is wasteful, DPoS is centralized), this gives businesses only one way to manage risk, which could be either excessive — when you process a small transaction and need to pay a high overhead — or insufficient — when you need the transaction to be documented with legally binding signatures.

Third, there is the issue of regulation. Existing blockchains have not been flexible enough to meet various regulatory requirements, since different countries have various cryptography standards and data regulations.

While it’s true that there are several private DLT solutions that were designed solely for enterprise needs and therefore address some of the above issues, their implementation costs are high and they operate as isolated systems without any interoperability with public chains and among each other. Thus, they are able to serve certain enterprise needs, but fail to become game changers in the blockchain industry.

In contrast, Insolar is reinventing the entire logic of DLT with enterprise needs at the forefront. Insolar is building distributed business networks, and operating as a hybrid solution between public and private DLT.

So what are the key features that make Insolar the most business-oriented DLT solution in the market?

1. Governance model

Any Insolar network user, whether an enterprise or an individual, is free to choose between operating in an Insolar Public network or to create a domain with its own rules. The latter could be either an isolated (Private) network with its own servers, or a controlled (Permissioned) network, where the participants do not own the hardware, and computing power is provided by ecosystem members who are bound to financial and legal guarantees of liability and confidentiality.

The main idea behind the system of interconnected Public and Private domains is not just securing sensitive data, but rather allowing any businesses to set their own rules, according to their own policies, risk management, regulatory framework, or other wishes. Thus, they are free to choose any consensus algorithm, any role within the protocol, and any level of data security.

One of Insolar’s unique features is that it enables interoperability between the Public chain and Private domains. In this system, smart contracts within Private domains are able to activate smart contracts from the Public network. This also works in reverse unless the privacy settings within a private domain allow sharing data outside of it.

All of this makes Insolar more than just a blockchain network in the traditional sense, but rather, what we call, Distributed Business Networks, where everyone is able to choose features that best suit their needs.

2. Performance and Consensus

Using Insolar within the Public network is similar with other public blockchain protocols, but the network is organized in a more efficient way. All of the nodes may have one of two roles: Storage or Processing. The Storage nodes are divided into “Heavy” and “Light” material.

The “Heavy material” nodes store the ledger, but unlike other blockchain protocols, none of them keep it entirely, but only a certain part. This is done both for the sake of security and storage capacity. The “Light material” nodes keep only the recent history of a ledger and are used for traffic inside the network.

The Processing nodes do the computing and carry out the transactions. The difference to other protocols is that they do not do it simultaneously. Instead, each smart contract is delegated to a single node. Next, a few other nodes (called “Validators”) approve the transactions. As a result, the throughput capacity increases. Thanks to this, the Insolar network is able to provide large-scale transactions. This in turn enables businesses to process documents on-chain.

To make sure that the network is resistant to attacks from malicious nodes, all the nodes are chosen pseudo-randomly at start of each block, which is triggered by signals called “Pulse”. Pulse also carries a source of randomness / entropy and is generated every 5–15 seconds by Pulsar nodes.

3. Smart contracts

Through the use of sharding technology, all smart-contracts are run simultaneously, and — unlike say Ethereum — could not be delayed to the next block. Enterprise business logic requires the ability to create complicated smart contracts with heavy ledgers inside them. In the Ethereum contract model, all data is stored inside the contracts. Thus, popular contract ledgers continually grow, which makes working with them expensive for users.

The Insolar platform uses helpful “Embedded contracts”, so when key value storage is needed, the contract gets only necessary data. This way, neither the creator of the contract nor the user needs to pay huge overheads when working with large contracts that contain irrelevant data.

True to its service-orientated approach, Insolar’s contracts are especially created for enterprise developers, who might not be familiar with the way that DLT works. Unlike Ethereum, EOS and other blockchain protocols, an Insolar contract developer can focus on the contract logic and the calls of other contracts. Details like the location and implementation specifics of other contracts are managed transparently by the platform. Golang is the main programming language, but some others, like Java, will be added soon.

Unlike on other blockchains, in order to run tests, a contract developer working with the Insolar platform will not need to launch a testnet. Testing a smart contract will work like testing an ordinary Golang or Java program.

4. Data management

Insolar is regulatory-friendly in terms of data governance and encryption and fully compliant with the General Data Protection Regulation (GDPR) and other major data protection standards. For instance, GDPR foresees erasing private data in certain cases. This can be executed in private or permissioned domains in the Insolar network, thus ensuring none of third parties keeps any private data after the access has expired.

Also, Insolar is the only DLT protocol that has embedded support of any national cryptography standards. It can thus enable any international transaction, no matter what the local requirements for data encryption.

Insolar’s main focus

Insolar is a new generation of blockchain — blockchain 4.0 — not only in terms of technology, but in terms of approach. While other DLT networks are solely focused on the protocol layer, Insolar builds enterprise applications on top of this. This approach can only work when the whole logic of DLT is reinvented according to real business needs.

The Insolar platform handles the real-world complexity of business networks, building easy-to-design, shared business processes. It works like using Lego building blocks.

Insolar’s technology and solutions will make the world much more efficient, transparent, and connected. We believe that people and companies are stronger when they work together.

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