This is Part Eight in the series looking at Quant Network, where we look at Enterprise adoption, the difference between Permissioned and Permissionless blockchains as well as existing barriers to further enterprise investment which Quant Network help overcome to enable the mass adoption of blockchain by Enterprises.

Part one can be found here and a link to the other parts can be found at the bottom of this article.

Existing Adoption

DAPPs are still in very early stages of development and for those few that have a small amount of daily users consist mainly of Gambling and Gaming DAPPs. Over 90% of dApps had no volume / users according to data from dAppRadar. So, some might question is Blockchain just a load of Hype?

Enterprise Adoption

It’s Enterprises that is going to be the biggest driver of Blockchain adoption. Forbes recently released their list of 50 Enterprises with minimum revenues or valuations of $1 billion, and U.S. operation and that are currently leading the way in adapting decentralized ledgers to their operating needs.

According to International Data Corp, total corporate and government spending on blockchain should hit $2.9 billion in 2019, an increase of 89% over the previous year, and reach $12.4 billion by 2022. When PwC surveyed 600 execs last year, 84% said their companies are involved with blockchain.

And this isn’t adoption years away, as an example in a few months DTCC will quietly begin the largest live implementation of blockchain. Records for about 50,000 accounts in DTCC’s Trade Information Warehouse, where information on $10 trillion worth of credit derivatives is stored, will move to a customized digital ledger called AxCore. Soon all will have access to a single real-time account of trades, eliminating layers of databases.

The requirements for enterprise blockchains are however different from those developed for consumers and consumer applications. Enterprises are very concerned about the privacy and security of their data. They are also very protective of the intellectual property in their business processes. Most enterprises don’t want their transactions and business processes to be visible to anyone but authorised users and as a result adoption of public blockchains in their current state is limited. Once public blockchains mature and resolve issues such as speed, privacy as well as regulation in this space evolving as well then possibly there will no longer be a need for permissioned blockchains. However today, adoption of blockchain is good, Enterprises are still exploring public blockchains as is the case with Ethereum, its just it will likely be with a combination of permissioned blockchains at least in the next couple of years.

Permissionless vs Permissioned Blockckchains

Permissionless Blockchains — Also known as Public blockchains, these you will likely be most familiar with where anyone can access and interact with the blockchain and consensus mechanisms such as proof of work and proof of stake are used. Anybody can run a node, view transactions on the blockchain. A gas fee is charged via a token. Examples include Bitcoin, Ethereum, IOTA etc.

Permissioned Blockchains — Also known as Consortium blockchains and also commonly misunderstood as private blockchains are where nodes are run only by trusted participants in the consortium and only authorised users can take part in transactions. Even within members of the consortium permissions can be applied so that only certain members can see transactions that relate to them.

Decentralisation is sacrificed to improve speed and privacy. There is no need for the slow and energy intensive consensus protocols such as proof of work or even proof of stake as the network selects the groups that will run the nodes. Since these groups are vetted or selected from a pool of trusted entities, they create ‘trusted’ nodes. Trust is therefore much less of a concern than in a public blockchain where the groups that run the nodes are anonymous. As a result, enterprise blockchains can afford to use much less secure consensus protocols to maximize speed of transactions while reducing energy consumed. In permissioned chains subsets of the nodes can run less intensive consensus protocols, which enables parallel processing of the consensus. Hyperledger fabric is able to hit 20,000 transactions per second with recent improvements and they believe 50,000 transactions should be achievable with optimisation

There are no gas fees with a permissioned blockchain, so all transactions are completely free. Examples of Permissioned blockchains include Hyperledger Fabric, R3’s Corda and JP Morgan’s Quorum

These blockchains aren’t one big blockchain like Ethereum, Bitcoin etc. Each consortium will create their own separate instance of the blockchain. So, if there are 5 EU Large Car manufacturers who decide to create a consortium on Hyperledger then each of those companies will run nodes to interact and verify transactions on the blockchain. Each company will have an equal say / vote on governance for that instance of blockchain. Nobody outside of those 5 companies would be able to interact with that instance of Hyperledger. The nodes only contain data that has been put on the ledger by those 5 companies. All transactions between those 5 companies would be free, fast and private. Privacy can be extended so for example transactions between 2 of the 5 companies would be visible between those 2 companies. The other 3 wouldn’t be able to see them.

Similarly, if 5 Food retailers create their own consortium and instance of Hyperledger then it would be completely separate to the 5 car manufacturers instance. The nodes would be controlled by the food retailers and the nodes would contain data only related to the Food retailers.

Analysing the Forbes 50 Blockchain list

Blockdata did a post analysing the Forbes list which can be seen here