Smart Contract Blockchain/DLT Platforms: How Do They Measure Up?

When Bitcoin first appeared in 2008, as a “purely peer-to-peer version of electronic cash”, the concept of a blockchain, and the word itself wasn’t on anyone’s radar.

Over the years, cryptocurrency innovation and constant iterations have resulted in the furthering of blockchain-based technology. The most commonly accepted definition, according to the open source PT-BSC (Blockchain Security Controls) describes blockchain as a peer-to-peer network that time stamps record into an unbreakable chain of hash-based proof-of-work.

Blockchain’s are based on distributed ledgers. These are a peer-to-peer networks which allow for alterations to time-stamped records, usually involving agreed methods of consensus, such as Proof of Stake, a Federated Byzantine Agreement or Segregated Witness.

Although there is a lot of hype surrounding cryptocurrencies, governments, banks and multinational corporations are more excited about the potential impact of blockchain, especially when it comes to smart contract-orientated platforms. Blockchain and distributed ledgers can potentially replace and overhaul legacy systems that are straining under transactional demands and the need to drastically improve operational efficiencies.

Government and Blockchain

Blockchain facilitates the movement of large volumes of data securely: processing, recording and storing them at great speed. Governments exist in a world of data. Similar to banks, these are one group of organisations around the world that have a pressing need to transform how they absorb, process, transfer and store data.

Governments are overwhelmed with data from countless sources. Blockchain could revolutionise this relationship, improving government agency outcomes for everyone, especially citizens, businesses and anyone who benefits from government services.

In Dubai, the Smart Dubai initiative supported by hisHighness Sheikh Mohammed bin Rashid Al Maktoum, is aiming to make the city the happiest on Earth using technology and innovation. Now the city is making Blockchain a key part of this, bringing about the possibility for Dubai to “unlock 5.5 billion dirhams in savings annually in document processing alone — equal to the one Burj Khalifa’s worth of value every year.”

Developers and integrators of solutions for eGovernment have found that governments and agencies need solutions that reduce costs and make it easier to interact with different departments, citizens, businesses and foreign countries. Where legacy systems can’t cope with modern population and efficiency demands, blockchain can.

Let’s take a look at eight of the leading Blockchain platforms employing smart contract logic to facilitate processes, payments and transfers.

Ethereum

• An open-source, public, blockchain-based powerful distributed computing platform capable of writing and implementing smart contracts.
• Command line tools are built using Go, C++, Python, Java.
• Consensus is achieved using Ethash, a Proof of Work algorithm.
• Contracts that are agreed across nodes of the network and users can create democratic autonomous organizations (DAOs).
• It also allows for the creation of cryptocurrencies, e.g. Ether, and tokens, which means ICOs are possible.
• Wallets ensure users can hold crypto-currencies, tokens, and write and deploy agreements and asset transfers using smart contracts.
• Global consumer and central banks — individually and in collaborative groups (the most prominent is R3; 100 banks working to develop Corda) — are building on this technology to overhaul payment processing. Those working on this have taken it one step further: taking a much wider range of commercial applications into consideration.
• One of the main drawbacks of using Ethereum as the platform for smart contracts, is the number of transactions that can be processed per second. For comparison: Visa can handle over 1,600 per second, whereas in September 2017, Ethereum could only handle 5 per second.

Corda

• Corda touts itself as DLT which “meets the highest standards of the banking industry, yet is applicable to any commercial scenario [which means] participants can transact without the need for central authorities, creating a world of frictionless commerce.”

It should be noted that R3 Corda is not a blockchain.

• R3, the developers behind the project, assert that Corda offers bank-grade security and can process smart action contracts, matching the definition of Clack, Bakshi, and Braine.
• Corda is the only open-source distributed ledger platform with a pluggable consensus model.
• Unlike other platforms, there is no global broadcasting across the network — which is sensible, considering this platform was designed by and for the financial services sector, with multiple other sensitive commercial applications.
• Users can query with SQL, to join databases and make bulk imports/exports possible.
• The speed of transactions is faster than that of Ethereum, making it more useful for banks and private companies.

Avanza Cipher

• Avanza Cipher is the proprietary blockchain of Avanza, an innovative IT/software company with over 17 years experience and 300 clients.
• Avanza created this platform which was subsequently selected by the Smart Dubai Office as the basis of a city-wide Blockchain-based payment system in 2017.
• Cipher, will rollout to and engage with 38 partner government entities, financial institutions and other departments in the city of Dubai, according to a memorandum of understanding signed in April 2017.
• Cipher was selected through the Dubai Future Accelerators program after a successful pilot project with Dubai’s largest bank, Emirates NBD.
• Interestingly, before the Smart Dubai Initiative announced the partnership with Avanza, it signed an expanded agreement with IBM for the establishment of a Cognitive Center of Competence, which suggests that Avanza needs some support from a much larger more experienced partner to make the original aims of this project possible.

Another pilot between Emirates NBD and India’s largest private bank, ICICI Bank, successfully saw real-time international transactions executed over a blockchain. Other transactions, such as purchase orders, invoices, shipping and insurance documents were also sent over the blockchain, demonstrating its commercial value for international trade.

Hyperledger Fabric

• Supported by The Linux Foundation and launched in 2016, Hyperledger, was founded as a business blockchain umbrella organisation, with 30 founding corporate members, supporting working and proven blockchain projects.
• One of these is Hyperledger Fabric, created from a codebase that combined work from Digital Asset, libconsensus from Blockstream and OpenBlockchain from IBM.
• Users can search and update the ledger using key-based lookups, range queries, and composite key queries.
• Users can also can conduct read-only searches.
• Transactions contain signatures of every endorsing peer; peers can validate transactions against policies and they’re enforceable against these, with consensus only achieved when the results of a transaction (e.g. a contract) have met the policy criteria for that transaction.
• Consensus is only met when the order of and results of the blockchain’s transactions meet and adhere to the policy/contracts criteria and checks.
• With Fabric, “channels” can be created which contain the defining policies of a block, access and control lists, and other information. It is also possible for crypto materials to be generated from different certificate authorities

Hyperledger Sawtooth

• Another Hyperledger incubated project called Sawtooth was announced in January 2018 as a working enterprise blockchain. Sawtooth was developed at Intel’s incubation group.
• Sawtooth is committed to maintaining “focus on making smart contracts safe and bringing blockchain to the enterprise without cutting the benefits of blockchain that inspired interest to begin with.”
• The consensus mechanism on the platform is known as Proof of Elapsed Time.

Once the platform evolved into an active project within the Hyperledger, they were eager to roll out enterprise features that include:

• Governance within each blockchain — with smart contracts, configuration settings can be changed that will improve the user-experience.
• Transactions can be processed faster and in parallel, which will improve transaction speeds and thus solving one of the main problems of other popular platforms.
• Integration with Ethereum and Ethereum tooling.
• Those with a vote can upgrade or swap the consensus mechanism as required, making it easier to scale the platform and network of users.
• Other advantages of Sawtooth is that apps can be built on the API, it comes with Byzantine Fault Tolerance options to make it more robust, and it offers a “‘global state agreement,’ an assurance that each node has cryptographically identical copies of the blockchain database.”

NEO Blockchain

• Founded in 2014 by Shanghai-based blockchain R&D company, OnChain, NEO was formerly known as Antshares, is now often known as the “Ethereum of China.”
• NEO was funded by two ICOs — in 2015 and 2016 — raising over $5 million.
• NEO wants to be a leading blockchain platform for the smart economy, as per their website: “Digital Assets + Digital Identity + Smart Contract = Smart Economy.”
• NEO is a “non-profit community-based blockchain project that utilizes blockchain technology and digital identity to digitize assets, to automate the management of digital assets using smart contracts, and to realize a “smart economy” with a distributed network.”
• NEO uses the X.509 digital identity standard — based on ISO/IEC 24760–1 guidelines — the most widely accepted way of issuing certificates to verify the digital identity of an asset, using the public key infrastructure. The Web of Trust point-to-point certificate issuance mode is also supported on this platform.
• Similar to Ethereum, NEO uses the Smart Contract 2.0 system for smart contracts.
• There are currently two tokens on the platform: NEO — with a cap of 100 million tokens — and GAS (formerly known as Antcoins).
• Consensus on NEO is through Delegated Byzantine Fault Tolerance, also known as dBFT, which they believe will scale easier than the methods on Ethereum.

EOS Blockchain

• Fortune describes EOS as “one of the most talked-about blockchain services in the crypto-sphere”, founded to challenge Ethereum.
• EOS.IO Testate is a platform that will be able to support thousands of Commercial Scale DApps, with parallel execution, asynchronous communication which separates authentication from execution.
• According to CoinMarketCap, Block.one, the company behind EOS, has raised the ninth largest ICO to date, pulling in over $700 million through a crowdsale.
• EOS plans to remove transaction fees — potentially transforming financial services and FinTech — and support millions of transactions running through industrial/enterprise-scale decentralized apps (DApps).
• The plan is to ensure that DApps run as smoothly as possible, with the lowest possible latency and processing to take place in parallel to distribute workloads and consensus and save time/resources.
• EOS promises to combine the most useful features from platforms with good throughput, such as Graphene and BitShares (Dan Larimer, the CTO is the man behind BitShares), with the smart contract features of Ethereum.
• Consensus is achieved using the Delegated Proof of Stake (DPOS) method.

Apla

• Launched in February 2017, Apla is a private blockchain platform for building digital ecosystems: software environments for writing and running blockchain applications.
• Created by eGaaS — electronic Government as a Service.
• Smart contracts are created in Simvolio, the language for writing smart contracts with fast compilation in byte code. The contract code is written in Molis editor.
• Molis is the tool that ensures users can access every Apla feature — it contains an APL token wallet and an integrated development environment for blockchain applications.
• The Apla blockchain platform offers rapid application development and aims to bring simplicity to blockchain usage via the provision of frameworks and flexible integration.
• Any owner of an Apla account can create their own ecosystem in one click. Access to applications and right to participate in ecosystem management are owned by its members — Apla users invited by the ecosystem creator.
• The consensus mechanism is through customized Proof-of-Authority.
• Legal frameworks exist at the contract level, making it far more versatile than other platforms. Contracts can only be executed in accordance with rules set out in Smart Laws.
• Smart Laws also introduce oversight to smart contract logic, meaning transactions which involve code exploits, mistakes and illegal activity can be reversed without having to hard fork.

What do governments need from Blockchain technology?

Dubai is the first government to take blockchain so seriously and invest so much. However, it isn’t the only one. Austria, Switzerland and Estonia (a small country at the forefront of many things digital) are also taking a serious look at finding blockchain solutions for government.

In many respects, governments can take the same approach as banks, providing they get comfortable with sharing information, technology and best practices.

As a minimum, governments are going to the following from blockchain platforms:

• High volume transactions per second. Current platforms don’t get anywhere near close to Visa, Mastercard, bank legacy systems, or PayPal. Governments need to know that any platform replacing their legacy systems can cope with hundreds of transactions per second (if we are taking into consideration the whole range of eGovernment services that citizens and businesses need to access).
• Bank-grade security. Even though blockchain platforms were built, in part, on the premise of security, there have been far too many high profile “thefts” of cryptocurrencies. “Hacks” that break platforms, such as the DAO on Ethereum (now fixed and resolved). Governments can’t put their citizens’ data at risk in this way, which is why extensive field tests are needed for any platform that is attempting to provide a new, more efficient solution for governments. Not enough of those listed above are fully tested in a live environment handling citizen and business data, or inter-departmental data.
• Creating large registries. Governments process and store huge amounts of data. Platforms need to be able to handle this. A new record would be created on the ledger with every new interaction, update, tax payment, customer query, etc. As departments communicate with one another — increasingly on an automated basis — data is shared, and new information added. So far, on Ethereum and Fabric, it isn’t possible to create and store large databases, which is one of the challenges Apla is attempting to solve.
• The most effective consensus algorithm. Again, this comes back to the issue that there hasn’t been enough testing in a live environment; many are still experimental. It will largely depend on the normal democratic, legal and legislative processes of individual governments, which is why more consensus models need testing with government agencies and departments.

Governments that want to experiment with blockchain need partners that can solve these problems. Improve systems and create noticeable efficiencies that improve how governments operate, for the benefit of all involved and every stakeholder. With more testing and investment, an open-source, blockchain solution, or consortium of solutions (which is far from ideal since it causes data to sit in silo chains) can be found that solve the problems and challenges governments face.

Due to the scope of this article, not all of the platforms listed in the graphic at the top have been included in the analysis. I will be happy to receive comments and suggestions to spread knowledge about different blockchain platforms!

Author: Alina Nuzhenko

Alina has a background in PR for IT companies and banks and has recently made it her special challenge to educate people on how to benefit from blockchain technology.

Blockchain Business Review from Apla provides high-quality educational material from the world of blockchain to inform the business community of the competitive advantage that can be gained by integrating distributed ledger data storage within organizations. Our mission is to promote knowledge about blockchain and its uses in both the private and public sector and demonstrate the value of blockchain integration.