The goal of this post is to aid in choosing a permissioned blockchain project for different use cases. I’ve compared different permissioned blockchains. Even though most of the projects look alike, they all shine in different ways.
A private blockchain is useful when you have an organization where
- the members of the organization are geographically distributed, and cannot trust each other completely,
- there is a documented history of corruption, specifically one that goes undetected for many years,
- there is no possibility of establishing a centralized control, whom everyone trusts, like a “head office”, “president” or “company servers”.
Permissioned Blockchain has different use cases such as supply chain, payments, custody, credit swaps, commodities, micro lending, escrow, charity, music publishing and much more.
In other words, the security of a public blockchain like Bitcoin comes from Proof of Work, which makes it mathematically impossible to fake or reverse transactions without colluding miners. On the other hand, the security promises of distributed ledgers and private blockchains are only as good as the honesty of the entities validating the transactions. There are no mathematical guarantees behind the irreversibility of transactions in a private blockchain.
I’ve researched 15 projects and rated them based on 7 parameters.
- Has Finality: Whether there is transaction finality in less than 10 seconds. Bitcoin has probabilistic finality of ~99.99% after waiting for 45 confirmation blocks whereas Stellar has instant transaction finality where there can’t be a fork thus a transaction can not be reverted.
- Transaction Speed: Rather than writing maximum transaction per second (tps), I’ve decided to divide into 2 groups. (1) Fast and (2) Slow. Fast is more than 100 tps and slow is less than 100 tps. If some modifications are made to the protocol it’s always possible to increase tps. This parameter is based on its default configurations.
- Confidentiality: For businesses, privacy is really important. Some of the projects which support confidentiality may leak information such as the total transaction count.
- Smart Contract: The project allows Turing complete programming.
- Light Client: Whether a transaction could be made without the need of a full node such as from mobile phones or browsers.
- Multi-Sig Wallet: Is it possible to support multi-sig wallets?
- Community: Does the project have a big enough community? Is it possible to ask a question to the community and get an answer in less than a day?
I’ve set minimum requirements for attributes I find as a must for a permissioned blockchain. These requirements are:
- Minimum 100 tps
- Active community
- Active development of the project
- Transaction finality in less than 10 seconds
- At least one company worth more than $5M using the project
I’ve marked the project color as red if the project does not satisfy any of these requirements. Empty cells mean the project did not satisfy the requirements, so I have ceased research.
Original Data Name, Has default currency, Has Finality, Transaction Speed, Confidentiality, Smart Contract, Light…
For a business it’s critical to choose the right technology. This is truer for blockchain projects. If the wrong blockchain technology is chosen, it will be difficult or even impossible to migrate data. My research serves as a starting point, however, I highly suggest researching the technologies in-depth before choosing.
Let me know if you happen to need more details on selecting the correct Permissioned Blockchain for your use case.
Disclamer: I advise companies that use permissioned blockchains.