Open Permissioned Blockchain, a Hybrid Blockchain Offers the Best of Public and Private Chains
#2 How does Open Permissioned Blockchain add value for clients?
Today, one of the most exciting projects in the global blockchain space is the BSN Open Permissioned Blockchain Initiative (OPB). Key information on the OPB can be accessed here; this article focuses on exactly how the OPB can add so much value for clients.
1. What are the advantages of the OPB?
- For the whole industry
First and foremost, the OPB massively expands the market size for blockchain applications. It does this by allowing the adaptation of public chains to run without cryptocurrencies, thus sidestepping anti-crypto regulations in China, India, and elsewhere. The OPB not only brings the benefits of blockchain innovation to a larger audience, a massive pool of developer resources to be assembled. The blockchain industry will likely develop considerably slower without including countries with regulations unfavorable to cryptocurrencies in this pool. In this way, the OPB allows for much more extensive economies of scale to be accessed, both by individual firms, but more importantly, by the whole blockchain industry itself.
- For developers
For developers, using the OPB platform means dramatically simplifying and reducing their transaction costs. This is true in both a monetary sense because the charges for accessing the OPB are considerably lower than the industry average, but also in the sense of saving time. Developers using the OPB no longer need to concern themselves with the operation and maintenance, thus freeing up their time to focus solely on developing new decentralized applications. Finally, on a technical level, the OPB platform offers more application tools to developers. Therefore, it can facilitate designing more specialized applications for a broader range of use-cases.
- For business users
As with any new technology, the cost of implementing blockchain applications is currently prohibitively high. Primarily this is due to the lack of economies of scale in the sector at present. As already mentioned, the OPB is rapidly increasing these economies, and as such is making it significantly more cost-effective for SMEs to benefit from blockchain technology. By using the OPB platform, SMEs do not need to build, operate, and maintain the blockchain nodes themselves. With simple access protocols and low fees payable in fiat rather than cryptocurrencies, they can access a massive variety of decentralized applications via the OPB to quickly reap the rewards of digital transformation.
2. Why is the OPB a necessary innovation?
Permissioned chains are effectively just local area networks (LANs). Only consortium members can see and call services through the network. This procedure can become cumbersome when the consortium in question is large and complex or quickly expanding and developing.
On the other hand, fully public chains have no blockchain as a service (BasS) capabilities. This means participants are required to do everything for themselves, which generates substantial costs of money, time, and ties-up resources that can’t be deployed elsewhere. Public chain is not a viable approach for SMEs and not an effective one for more giant corporations.
The inextricable link between public chains and cryptocurrencies poses regulatory compliance issues, as we have noted above. Meanwhile, the cost of cloud resources for applications running on public chains is exceptionally high. These thresholds have made it extremely difficult for traditional businesses to adopt public chain applications on a large scale and have held back the rate of innovation.
The OPB allows business users access to BaaS facilities at the lowest possible cost because users only need to pay for the cloud resources they use, not for the maintenance of the whole network. Numerous organizations find this cost structure very attractive because they can only pay for the cloud services they require and then run their applications on an infrastructure that everyone in the network backs. In this way, enterprises can enjoy a considerably more transparent network with low cost in a predictable manner.
3. What is the future for the OPB?
At BSN, our long-term ambition is that the OPB will eventually become a coinless public chain and a distributed cloud service accessible by everyone in return for a small node management fee.
We believe that the cost savings gained by fully exploiting the potential economies of scale available to the OPB platform will allow the fees charged to remain well below the industry average. This accessibility will enable the OPB to become an actual ‘public infrastructure’ in the future.
This vision of the OPB as a future public infrastructure is strengthened by developing a standard communication protocol that makes cross-chain transactions as simple as moving from one website to another on the internet as we know it today.
Our prediction over a longer-term time horizon is that the continuous development and disruption of the global blockchain space will eventually lead to many chains disappearing when they are either surpassed by or subsumed within newer innovations. Therefore, the OPB approach to interoperability gives businesses a chance to ‘hedge their bets’ over the question of which approaches to blockchain will stand the test of time.
It is impossible to predict with any clarity. Still, at BSN, we expect the global blockchain landscape that emergences from the waves of disruption and innovation over the next decade to be approximately 30% public chain, 50% OPBs, and 20% permissioned chains.