A Closer Look at Hyperledger

By Billy Clabby, Clabby Analytics

Hyperledger is a term that refers to many different Linux Foundation projects that take advantage of blockchain technology. These projects create protocols and frameworks that tailor blockchain applications to specific purposes.

According to the Linux Foundation, “Hyperledger is an open source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration, hosted by The Linux Foundation, including leaders in finance, banking, Internet of Things, supply chains, manufacturing and technology.”

Hyperledger Projects

Hyperledger has several different framework projects including:

  • Hyperledger Fabric is a foundation for developing applications or solutions with a modular architecture. Hyperledger Fabric allows components to be plug-and-play, allowing network designers to use their own plug-ins. This enables businesses to reuse preexisting infrastructure instead of rebuilding it.
  • Hyperleader Sawtooth is a modular platform for building, deploying, and running distributed ledgers (seen success specifically in the fishing industry)
  • Iroha Hyperledger is a business blockchain framework designed to be simple and easy to incorporate into infrastructural projects requiring distributed ledger technology.
  • Hyperledger Burrow is a permissionable smart contract machine.
  • Hyperledger Indy is a distributed ledger, purpose-built for decentralized identity. It provides tools, libraries, and reusable components for creating and using independent digital identities rooted on blockchains or other distributed ledgers for interoperability.

The first two business blockchain framework projects approved by the Hyperledger Technical Steering Committee were:

  1. The Hyperledger Fabric, a codebase combining work by Digital Asset, libconsensus from Blockstream and OpenBlockchain from IBM; and,
  2. Hyperledger Sawtooth, developed at Intel. The governing board of Hyperledger now includes 21 members.

How Hyperledger Works

Hyperledger architecture splits transaction processing in to three different parts:

  • Distributed logic agreement and processing (known as chaincode)
  • Transaction Ordering
  • Transaction Validation and Commitment

The separation in the architecture creates fewer levels of verification across node types, offers network scalability, and helps maximize performance. With read/write permissions distributed around the network, scalability and performance are high. Since all stakeholders can visibly see the transaction as it is happening, fewer levels of trust are required in different parts of the blockchain system, making the environment more secure. With hyperledger chaincode, new members are added to the system dynamically, improving efficiency and performance.

Overall, the development of a hyperledger fabric, and the collaborative development efforts by various organizations, create a way to standardize blockchain.

Why Hyperledger?

The driving force behind hyperledger public blockchains (Bitcoin is an example of a public blockchain) is the need for greater privacy. A public blockchain requires each peer to execute all transactions and run a consensus (a complex process using algorithms to review and confirm information being added to the blockchain). Unfortunately, this means that public blockchain is not effective for private and confidential transactions because it provides too much visibility into transactions. Additionally, these types of public blockchains are not very scalable.

When compared to a public blockchain, a hyperledger-based network only allows parties directly affiliated with a transaction to get notifications, keeping the deal private. Think of hyperledger as a framework for permissioned networks. This means the identity of everyone on the network is known. In many cases, companies are required to adhere to data protection laws, and need to know which network members are accessing what data (common in healthcare and financial services.)

Hyperledger focuses on using blockchain to solve business problems. To remain competitive, businesses must adhere to risk policies and keep data confidential, which over time will require a blockchain system. Not only is a hyperledger-based blockchain more secure and scalable, the time it takes to create blockchain-specific applications is reduced. Further, hyperledger-based applications can be developed more cost-effectively.

Hyperledger also creates testing/integration efficiencies, and helps reduce risk. Artifacts and asset types that have been modeled are reusable. Definitions can be stored in a library and used across different applications and projects. As a result, project risk is reduced because assets have already been tested and integrated with applications, infrastructure and business processes that are already have in place. This also works well in managing transactions with customers and the supply chain because it creates a database of assets that can be shared.

Summary Observations

Hyperledger was founded in 2016 as an open source project formed by various stakeholders coming together to make blockchain more accessible to the world. In fact, 159 engineers from 27 organizations have contributed to Hyperledger. In other words, there is strong support for this project, leading Clabby Analytics to conclude that it will, someday, become a formal, industry standard means to process blockchain transactions. We believe that Hyperledger will dramatically change ledger-based internal business processes by allowing increased scalability and performance, while also ensuring a highly secure environment.

In my next blog, I will talk in depth about crypto-anchors and how, together with blockchain technology, they can authenticate a product’s origin and contents, helping to reduce fraud and the sale of counterfeit goods.

Let me know your thoughts on this article. If you have any questions, please do not hesitate to reach out to me. I’m also open to suggestions for topics for future blogs.

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