Enterprise Ethereum: How Private Blockchain Transformation Works

What is Enterprise Ethereum?

As its name suggests, Enterprise Ethereum is a private or permissioned version of the Ethereum public codebase specifically made for Organizations and Enterprises. Ethereum has been around for over a decade, and many government institutions and corporations are eyeing to utilize its blockchain in their business application, which they could not because of Etherum’s public nature. Enterprise Ethereum is a solution for such organizations, where they can build their applications leveraging both Etherrum-based private chains and the public mainnet. 

Enterprise Ethereum blockchain is a permissioned chain, so a control layer operates on top of the blockchain to regulate authority access to organizations and oversee their actions. It defines a set of guidelines and specifications to manage blockchain adoption among enterprises to maintain network authority but in a more decentralized and distributed fashion than centralized systems.

However, unlike Ethereum public mainnet- which follows a standard protocol, Enterprise Ethereum has no single off-the-shelf product. Providers catering to enterprise needs modify the existing Ethereum clients to meet their specific requirements, hence, different private networks will have unique solutions tailored to their needs.

What is EEA?

EEA, short for Ethereum Enterprise Alliance, is a global community that brings together Fortune 500 companies, blockchain leaders, adopters, academics, and developers. It was launched back in March 2017 as a non-profit organization to work and streamline Ethereum for an enterprise-grade solution. Mainly to develop new business opportunities, create open standard-based architecture, collaborate, and derive Ethereum adoption in industries. 

The board members of Ethereum Enterprise Alliance include Banco Santander, Microsoft, BlockApps, Consensys, Accenture, Ethereum Foundation, J.P. Morgan, The Open Foundation, Palm NFT studio, and Ernst & Young. The main vision of EEA is to join corporate forces to develop, promote, and support Ethereum technology implementation with a broad perspective. 

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Ethereum Enterprise Alliance aims to achieve the four visions mentioned below:

• Create an open-source standard for Enterprise Ethereum development instead of commercial products.
• Control all Enterprise Ethereum deployments and facilitate coordinated deployments among its members per their requirements to help them save time and costs.
• Both Ethereum public and private chains will evolve together. Ethereum Enterprise Alliance will incorporate new upgrades of the public mainnet to the private chain, which members can choose to add or not according to their needs. 
• Ethereum’s public network was launched in 2015 and holds vast experience. So, EEA will support all existing standards, which can be leveraged in future projects.

How does Enterprise Ethereum work?

Enterprise Ethereum stands as a strategic adaptation of Ethereum by modifying the existing Ethereum clients to cater to the needs of enterprises, including its performance, privacy, governance, and scalability. While retaining the foundation of the public Ethereum network, it introduces identity management and additional features, such as the ability to adjust network parameters, size, block size, and gas limit, to offer diverse outcomes for private networks based on individual enterprise needs.

This can help enterprises develop private chains without worrying about high gas and low throughput rate of public mainnet. Additionally, Enterprise Ethereum executes transactions off-chain with its consensus mechanism for block validation. The private chain embeds a secure hash into the block transaction data before connecting it to the Ethereum mainnet. This ensures that the transactions and data from the private chain are recorded on the mainnet but anonymous to non-members.

The private chains are separate blockchains anchored to the Ethereum mainnet, meaning the mainnet is no longer responsible for validating transactions and can be processed off-chain. With fewer entities processing and verifying transactions, private chains become more efficient than the Ethereum mainnet in terms of speed and cost. And to benefit from the security of public Ethereum, all processed transactions of private chains are settled on the mainnet.

Additional Read: Ethereum Market Capitalization History

Benefits of Enterprise Ethereum

• Open Source: Enterprise Ethereum is open-source, allowing companies to utilize and modify the blockchain freely and benefit collaborative development.
• Data Coordination: The architecture retains data coordination among network participants, cultivating trust and autonomy without central authorities. 
• Permissioned Networks: It offers permissioned chains and consortium environments, giving control of access and execution, thereby improving privacy for enterprises. 
• Network Size: It ensures scalability and adaptability by handling large network sizes, scaling up to hundreds of nodes or even millions of users. 
• Private Transactions: Enterprise Ethereum supports different levels of transaction privacy using private consortia and transaction layering protocols. 
• Scalability and Performance: Customizable consensus mechanisms, block times, and gas limits enable Enterprise Ethereum to surpass the scalability of public Ethereum. 
• Finality: All transactions are finalized instantly without any tampering.
• Incentive Layer: Its incentive layer prevents fraud and promotes good participant behavior to safeguard the network from internal and external threats. 
• Standards: Enterprise Ethereum establishes standards for structural components, facilitating rapid deployment and ensuring network solidity. 
• Interoperability: It does not have any vendor lock-in, so users have the flexibility to operate private blockchains within various cloud environments. 
• Low Cost: Enterprise Ethereum offers cost-effective blockchain implementation, fostering long-term sustainability for organizations.

Enterprise developer resources

• Private Ethereum for Enterprises: https://ethereum.org/en/enterprise/private-ethereum/
• Official EEA website: https://entethalliance.org/ 
• Hyperledger Foundation- an ecosystem of enterprise-grade blockchain tech: https://www.hyperledger.org/
• Consensys- open-source blockchain for business: https://consensys.net/quorum/
• Kaleido- a platform for creating and running cross-cloud: https://www.kaleido.io/ 

Projects on Enterprise Ethereum

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What are the use cases of Enterprise Ethereum?

• Financial Services: Conventional banking and monetary systems have limited transparency and deal with slow and costly transactions. Enterprise Ethereum offers a transparent and secure system, enabling faster cross-border payments, settlements, and effective management of complex services.
• Supply Chain Management: Supply management systems often need more transparency and accountability, leading to counterfeiting and delays in order fulfillment. Enterprise Ethereum can be utilized to create a private supply chain network where each transaction and goods can be authenticated, reducing fraud.
• Identity Verification: Issue: Increasing data breach cases create challenges in managing user data and personal information. Establishing a private Ethereum decentralized identity system provides control over users’ info, efficient verification, and a tamper-proof model, benefiting enterprises and IoT management.

Conclusion

Enterprise Ethereum has overcome many technical and regulatory challenges, jamming blockchain adoption in businesses. Its private blockchain enables various use cases for businesses tailored to their specific needs at a very low cost. With more participants joining the network and preserving a collaborative environment, the Ethereum Enterprises Association is bound to bring the most advanced and resilient real-world blockchain application for business.