Nodes are an essential part of networks, blockchain or otherwise, as these are the computers which process data for the network. It would then, therefore, make sense that if a participant wants to join a blockchain network for business interactions, they would need their own node to participate and contribute. However, Insolar’s blockchain network allows business users to join without setting up their own node and this presents several advantages.

In terms of expenditure, blockchain nodes held on site at an organization mean high capital expenditure on IT infrastructure and housing for the technology, while moderate operational expenditure is incurred for the running costs. However, using a cloud node on the Insolar network allows for capital expenditure to be reduced to zero, with a much lower operational expenditure. Moreover, this requires no IT effort from within the company and no knowledge of blockchain or special training.

Mutual advantage

The benefits that blockchain offers grow with the amount of network participants, no matter how big or small they may be. A system where computing resources can be loaned out to business network participants offers double-sided advantages:

Small and medium sized enterprises (SMEs) may not have the funds or space to increase their computing infrastructure. Being able to rent spare capacity from larger or specialised network participants allows these SMEs to save resources over the short term and means they can become part of the network without any large upfront costs. Larger or specialized firms (whose primary business model is loaning out hardware capacity) can profit from selling spare capacity to smaller firms and make this into a profitable business model. Both those that buy and those that sell hardware capacity can benefit from the decentralized data backup that distributed ledger technology provides.

Moreover, SME participants can benefit from:

On demand storage solutions that can be increased/decreased as required.

Think of it as having all of the benefits of cloud storage, but without the disadvantages of data recovery costs in case of loss and the time consumption that comes with it, due to the fact that data is scattered across a decentralized network of computers. Moreover, in a blockchain network with several hardware providers, uptime can be guaranteed around the clock since, should one hardware provider suffer difficulties, another data source takes its place.

As an illustrative example of such a network, let us consider the following.

The little man

A greengrocer recognizes a growing trend in which consumers are more interested in knowing exactly from where the produce they consume comes from. As such, the greengrocer sets out to become part of a blockchain network to trace provenance of all fruit and vegetables, using this information as an advantage over her competitors who do not provide the same service. The greengrocer considers that they can pass on any related costs to the consumer, whilst the provision of the service will increase sales and revenue. However, the greengrocer has no need or desire to set up a server to join the network, but would still like the benefit of access to the network.

The blockchain network offers the greengrocer a discount for providing consumer end-point figures, which contribute the data held on the network meaning that all participants have access to sales figures. The greengrocer is thereby incentivised to provide statistics on sales figures.

The supply chain

All participants of the supply chain for the groceries are also part of the network, starting from the producers of, for example, the avocados in Mexico, through to the buyers, warehouse owners, exporters, port authorities, logistics firm, importers and distributors.

With Insolar, none of the above need to own their own node, instead, each party can store all of their shared data within a secure blockchain cloud hosted by a specialized company, which provides its hardware capacity for a fee. If any of the participants has the space and resources to deploy their own node to the network, they are free to do so and sell any excess capacity to the other network participants.

The cloud providers

For example, the import/export authorities already have their own dedicated servers as previous cloud systems were not secure enough to house the authorities’ data. However, with blockchain cryptography, data scattering and node liability, the import/export authorities and other participants can be sure that the data will be kept confidential as they are bound by legal and financial responsibility to store the data securely. Parties acting maliciously, erroneously or insecurely can be identified and prosecuted in line with contractual agreements or respective data protection laws.

How Insolar’s approach differs

To highlight the difference in Insolar’s approach to network participants not having to deploy a node to participate in the network, let’s look at how other blockchain platforms approach network participation.

In other blockchain platform networks, an organization can only participate by deploying their own node. If the organization has data, it is held on their own node’s database; if they have no data then nothing is stored on the node. In still others, you don’t have to deploy a node, but all your data is held by third party hardware providers, including your private key. This makes your data vulnerable.

Conversely, at Insolar, at application logic level there is no concept of a node. Instead, this logic is only applied in the cloud: an abstracted set of servers which shards data across several members of the network, with no single server having a complete data set for a certain object. Moreover, the business network participants stores their own private key separate from their data.

Execution and validation roles on the Insolar blockchain platform change randomly at every Pulse (time interval that synchronizes the network), thereby removing the possibility that the executor node could predict which node(s) will validate the result of its calculation. As such, the network user operates on the application level, signing off data with their private keys, which give full rights to conduct operations in their own name. The way in which data is stored, sharded, recollected back together and validated is handled by the technologies of Insolar. Furthermore, the platform’s cloud takes care of storage in such a way that an object is diffused across the network so that its data is stored separately across the network, meaning any third party trying to access data objects without permission cannot see them in their complete form.

Cloud-based storage for blockchain networks alleviates the need for businesses to purchase and store expensive IT equipment, which in turn provides greater flexibility. Insolar provides a secure network for businesses to share data with relevant stakeholders, overcomes the barriers of previous blockchain platforms, while it also introduces the concept of cloud storage to blockchain.

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