Hyperledger vs XinFin which Blockchain Platform will Benefit your Business?
We are discussing the strengths and weaknesses of two new age blockchain technologies — XinFin’s XDC and IBM’s Hyperledger.
The ever-widening gap between expectations and reality is pushing technology to explore unprecedented corners. The advent of blockchain is perceived to be as revolutionary as the internet and to be honest, there is hardly any doubt left in this statement. Businesses, organisations and sectors are increasingly adopting distributed ledger technology in various forms to leverage the capabilities and liberties of a non-government regulated platform.
Modern blockchain networks are rigorously changing the business landscape by foraying into payments, supply chain, informatics, financial contracting and advisory domain and thus improving the efficiency of large, midsize and small businesses while reducing the potential entrant barriers. The enterprise blockchain is making transactions quicker, cheaper and smoother. Today we are discussing the strengths and weaknesses of two new-age blockchain technologies — XinFin’s XDC and IBM’s Hyperledger.
What is XDC?
XDC protocol works on the framework of hybrid blockchain technology and carries the features of private and public blockchain which doesn’t just support cryptocurrency but is currently being used across the XinFin ecosystem which has payment domain gateways, financial institutional applications, trading applications, supply chain solutions and wallet services.
Spread on a distributed network of individual private sub-networks, the XDC provides capabilities of a distributed public ledger along with transparency and the individual private sub-networks can be used for specific enterprise-level blockchain which has all amenities and security of private blockchain with master nodes holding membership stakes on the public network.
Every node carries both public and private state at the same time as each network that they are a part of, this mechanism furnishes the availability and synchronization of the data.
The XinFin network is a fork of Ethereum, therefore is fully compatible with Solidity and have also incorporated smart contracts in the protocol system. Thus, any individual enterprise can customise it to create different digital assets as per their use case. The validity of the smart contract is approved by only master nodes.
Unlike its public distributed counterparts, XDC doesn’t support mining and, hence saves on the cost added by miners by working through the consensus mechanism of Proof of Stake with the added PBFT layer i.e. the transactions are approved by a consortium of members who hold a stake in the network based on their wealth. The master nodes have depreciating locked stakes which are a derivative of the harmful activity or forking done by the node creating an auto management of the security breaches.
What is Hyperledger?
The Hyperledger project was launched by Linux Foundation to explore the applications of blockchain in different industries. It doesn’t have its own cryptocurrency. Hyperledger has a range of ongoing projects in various domains, for example, the project Burrow is working on an improvised version of smart contracts and the Hyperledger Quilt is working on the payment end of the business transactions.
What is Hyperledger Fabric?
Hyperledger Fabric offers a different approach to consensus wherein an interoperable network of networks is created which preserves the privacy nevertheless. It is an open-source technology which follows the policies of open governance to bring in innovation in the new applications features for all kinds of businesses. Some of its important features are:
- Decentralized trust in a network of known participants using permissioned channels
- Selective exposing of data as per the type of data and parties involved
- Smart contracts programmable in all languages and no custom languages and architectures required
All ledgers are updated for each transaction on a public blockchain but for hyperledger, the peers directly affiliated with the deal are connected, and only their ledgers get updated about the deal. Other third parties can only access a limited amount of information as per the permissions granted on the network
Problems with Hyperledger
Although the Hyperledger project has generated several innovations in the field of blockchain technology, the project has various limitations that make it infeasible for SMEs. Some of the major issues are:
- It operates in a rigid top-down fashion. The scale and usage of the Fabric stand to benefit only 1 % of the population and is not suitable for developing nations.
- It does not have a consensus mechanism and customers can create their own consensus algorithms as per the industry. Although this extends the capabilities but also creates a major security threat as there is no minimum compliance applicable.
- Interface with low flexibility for developers and lack of any inbuilt cryptocurrency on the network. This makes financial transactions infeasible and dependent on fiat currency which again limits the operations of the businesses and applications in general.
- One of the most expensive enterprise blockchain solutions in the market which makes it inaccessible to a major portion of new entrants and devoids it of better applications that have lesser resources as of now.
- Lack of informative resources and tutorials as reported by some users
- Non-public ledger with transactions being updated only in the participant's ledgers makes it a liability for users as the security of transactions is compromised.
Further comparing the major features of these two consensus-based networks:
- Instant payment at the lowest cost by enabling stable coin and peer to peer transfer between trusted parties.
- Hybrid blockchain with both private and public capability, both of which can be leveraged as per requirement.
- XDC token have high liquidity and are usable across the ecosystem
- Low transaction time and the newly launched mainnet technology has opened new avenues
- Runs on blockchain technology.
- Has major projects in computing, aviation, supply chain and banking.
- Does not host a cryptocurrency.
XDC and Hyperledger differ in how they operate as well as in their intended uses. Hyperledger aims to explore new uses for blockchain, while XinFin was created to shorten the gap of technological deficit in the business world. This, however, presents the customer with highly capable options to invest their resources in. The decision of where to can only be taken by YOU though.
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