May 24, 2019 By Christopher Ferris 4 min read

The advent of any new technology always sparks healthy and lively debate over fundamentals: standards, business models, best practices and the like. Blockchain is no exception. We’re seeing that kind of debate unfold today as the technology continues to evolve and gain traction. Some in the blockchain community are asking, “What constitutes real blockchain?” I’m old enough to remember a similar debate about object-oriented computing and distributed objects. Memories, … but I digress.

In blockchain circles, some crypto diehards believe Bitcoin is the only true blockchain. Others criticize enterprise blockchains for a perceived lack of decentralization or an inability to gain traction. What many in these camps seem to obsess over is the decentralized nature of the consensus necessary to defend against byzantine nodes attempting to disrupt the system.

Public blockchains such as Bitcoin and Ethereum leverage proof of work, or proof of stake, consensus as a means of achieving byzantine fault tolerance. This is a brilliant design, no question, but frankly not viable for enterprises that want to use blockchain to create their business networks. Not to mention that it is extraordinarily wasteful. Most enterprises balk at the escalating mining costs. And let’s face it, in an era arguably defined by the existential threat of unsustainable energy consumption, burning millions of kilowatt-hours on cryptographic puzzles is more than a little unseemly.

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Who then, does it serve to pigeonhole blockchain to this incredibly reductive definition? Is it an intelligent strategy that advances blockchain adoption and innovation?

Since I’ve been at IBM, our mission has always been to build solutions that work for our clients in business settings and to leverage the ingenuity of the broader technology community. Our work on blockchain has been guided by a set of design principles aimed at fostering the development and adoption of the technology while addressing transparency and enterprise security. I believe these principles are as core to our platform as the technology itself: open source development, predicated on common standards and interoperability; distributed and transparent governance across multiple network participants; and permissioned access with bulletproof privacy protections.

That’s why rather than releasing a proprietary platform, IBM helped create Hyperledger, one of the fastest growing open source projects led by The Linux Foundation. We also contributed code that would seed the development of an enterprise-grade blockchain platform: Hyperledger Fabric. With more than 260 Hyperledger members, it has grown to become a multi-project, multi-stakeholder effort encompassing numerous enterprise blockchain and distributed ledger technologies.

Hyperledger Fabric leverages a novel execute-order-validate approach to ensuring the correctness of a set of decentralized peers by removing the ordering function from the peer to an independent ordering service with pluggable consensus that allows the system to scale horizontally and vertically in ways that most other distributed ledger technology (DLT) platforms cannot.

All this technical talk aside, the important thing to note here is the pluggable consensus. A byzantine fault tolerant consensus would be overkill where a less complex crash fault tolerant consensus would suffice. Given that the participants are all known to each other, and have complete control over what smart contracts they will be running, there is significantly less likelihood of byzantine attacks that cannot be addressed through a governance framework with legal remedies for malfeasance — something that permissionless networks such as Bitcoin and Ethereum lack.

Inefficient consensus mechanisms aren’t the only reason permissionless blockchains are a non-starter for enterprises. Most organizations balk at the notion that anyone can engage in transactions, or in Ethereum’s case, run smart contracts on the network. Just consider the financial services sector where institutions need to follow rigorous know-your-customer and anti-money laundering regulations. A Chief Information Security Officer would run screaming at the idea of accepting transactions from anonymous accounts, or allowing anyone to run smart contracts on that type of network.

For this reason, and many others we’ve learned over the past three years deploying blockchain, our team built IBM Blockchain Platform on Hyperledger Fabric. Our blockchain solutions run on any cloud that supports Kubernetes, so it can be deployed anywhere and is interoperable with other Hyperledger Fabric blockchains, ensuring clients aren’t locked into any one vendor. Operational governance and development tooling make deploying and managing the platform and writing applications and smart contracts (what we call chaincode) easier for developers and business operators.

And IBM is not alone. Alibaba, AWS, Microsoft, Google, Oracle, SAP and many others also utilize Hyperledger Fabric as a service, whether managed or unmanaged. Most also include one or more other enterprise blockchain frameworks, such as Hyperledger Sawtooth or JPMC’s Quorum.

Enterprise blockchain is resonating with organizations. We have more than 500 blockchain projects underway, 100 of which are live active networks. We continue to see adoption across a vast range of industries, including cross-border trading, foreign exchange and payments (CLSNet,, supply chain management (TradeLens), food safety and provenance (IBM Food Trust) and many others. HFS Research estimates that more than half of all enterprises currently running live production blockchain networks are working with IBM.

I’d hardly call that lack of adoption. So, is enterprise blockchain real blockchain? I think so, but does it really matter what we call it if it’s solving real problems for the enterprise?

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