A detailed introduction to Hyperledger

Published by Madhuri Walia on


Hyperledger is one of the most talked about projects in the blockchain space, and several bigwigs from different industries are supporting it. But, is it another blockchain like Bitcoin or Ethereum? Is it a cryptocurrency like BTC or ETH? Is it a company that makes blockchains? It is none of these things. 

Hyperledger’s whitepaper says – “Hyperledger is an open source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration including leaders in banking, finance, Internet of Things, manufacturing, supply chains, and technology. The Linux Foundation hosts Hyperledger under the foundation. Hyperledger does not promote a single blockchain codebase or a single blockchain project. Rather, it enables a worldwide developer community to work together and share ideas, infrastructure, and code.”

In a nutshell, Hyperledger is an open-source community and platform that enables developers to create blockchain solutions customised for specific use cases. It is an umbrella body with several frameworks and tools to enable the development of “open, transparent, reliable and interoperable enterprise blockchains”. 

How is Hyperledger different from Ethereum?

But, doesn’t Ethereum, with its Smart Contract functionality, also facilitate the development of blockchain-powered Decentralised Apps (DApps)? While both Ethereum and Hyperledger can be used for developing blockchain solutions, both the platforms are like apples and oranges. While Ethereum is suitable for decentralized applications meant for the public, privacy and scalability are two shortcomings of the Ethereum network. Hyperledger’s frameworks and tools are for enterprise-grade applications that are capable of providing confidentiality of transactions and information, and scalability. 

Let us understand these differences with an example.

Alice is a graphics designer who uses an Ethereum-based platform for connecting with clients and receiving payments. On the Ethereum network, all her transactions are visible to everyone on the network. Client A can see her transactions with Client B, Client C, and Client D. If she wants to offer her services at a discounted rate to one of her clients, she cannot do that without attracting the attention of the other clients. There is no confidentiality of transactions in the network. However, when she uses a Hyperledger Fabric, a Hyperledger framework, she has private channels for communicating and transacting with her clients privately. Thus, only Alice knows the details of her transactions with her clients. 

Both blockchain-related technologies differ in many other key aspects. Here’s a table highlighting the differences between Hyperledger and Ethereum –

What is it?Generalized permissionless platform with Smart Contracts functionality Permissioned platform with a modular architecture
What is it suitable for?For B2C applications where privacy of transactions is not a concernFor B2B use cases that require confidentiality of transactions
Which consensus algorithm does it use?Proof-of-Work entailing mining of cryptocurrencyPlug-and-Play consensus algorithm
Does it have a native cryptocurrency?Yes – EthereumNo
Is it scalable?Difficult to scale with the existing architectureEasily scalable

Let’s go through these differences in detail.

Ethereum is a permissionless platform which supports Smart Contracts functionality. A Smart Contract is a computer code that has the terms of agreement between a buyer and seller written directly onto the code. The code digitally controls the management and transfer of funds according to preset conditions. The smart contract will carry out a transaction automatically upon the fulfilment of the terms of the contract. With the help of Smart Contracts, developers can build Decentralized Apps (DApps) for public use that run on the blockchain and are not controlled by a single, centralised authority. 

Hyperledger, on the other hand, has a modular architecture and offers plug-and-play services. Hyperledger’s various frameworks, each with its own unique features, can be used for addressing specific pain points of various industries. For example, Hyperledger Fabric is a framework that enables businesses to develop their own private, permissioned blockchains which have the capability of handling over 1,000 transactions per second. 

Ethereum is best-suited for applications for consumers where privacy of transactions is not important. For example, for a decentralised ride-sharing app that connects users to car owners, the privacy of transactions is not a requisite. 

Hyperledger is more suited for industrial applications where companies need to maintain the confidentiality of transactions. For example, a big company that wants to use blockchain for transacting with multiple parties can go for Hyperledger Fabric. Hyperledger Fabric will allow the company to maintain private lines of communication with each of its vendors, thereby ensuring the confidentiality of transactions. 

The Ethereum network uses Proof-of-Work (PoW) as a consensus algorithm for validating transactions. In this consensus algorithm, cryptocurrency miners spend their computing power to solve a complex mathematical puzzle. The miners to solve the problem first are rewarded with cryptocurrency. In Hyperledger, the modular architecture of the platform allows for plug-and-play consensus algorithms. 

The Ethereum network has a native cryptocurrency – Ethereum, that incentivises miners to spend their computing power to calculate the PoW. Hyperledger, however, does not have any native cryptocurrency. Hyperledger-based applications can have their own cryptocurrencies if the solution architecture needs them.

The Ethereum network, at present, can process up to 15 transactions per second. Scalability is difficult because of its consensus algorithm that involves the participation of a majority of nodes on the network. Hyperledger projects are scalable. Hyperledger Fabric can process more than 1,000 transactions per second. 

Now, let us look at the various projects under the Hyperledger umbrella. 

Hyperledger Frameworks

Hyperledger Burrow – This is a permissioned smart contract application engine designed to be compatible with Ethereum’s smart contracts. This implies that Ethereum’s smart contracts can be imported and run on Hyperledger Burrow’s smart contract interpreter. Transactions on the network are validated using Byzantine-fault-tolerant Tendermint protocol. The purpose of this frame is to enable the processing and execution of smart contracts and aid in sharing processes across organisations. 

Hyperledger Fabric – Hyperledger Fabric is a modular, enterprise-grade permissioned distributed ledger platform that offers plug-and-play components for features such as privacy, memberships and consensus. For example, Fabric allows organisations to establish private channels of communication with different entities and interact with them privately and securely. Therefore, confidential data remains truly confidential on the network and only the parties involved in a particular transaction are in the possession of its details. 

Hyperledger Grid – Grid is the newest framework from Hyperledger and it is focused on serving the supply chain management sector. Grid’s primary contributors are Cargill, Intel and Bitwise IO. Hyperledger Grid consists of a mix of mutually compatible technologies, frameworks, and libraries that can be used by developers to develop effective solutions for cross-industry supply chain scenarios. 

Hyperledger Indy – Hyperledger Indy is a distributed ledger focused on digital identity management. Indy offers tools, libraries, and reusable components for creating, using and managing blockchain-based independent digital identities across administrative domains, applications, and other silos. Keeping in mind the need for efficacious performance, scale, trust model, and privacy, Indy’s design is purpose-built for decentralized identity. 

Hyperledger Iroha – Hyperledger Iroha is a permissioned general-purpose framework that allows businesses to implement blockchain technology for a range of activities – creation and management of simple or complex digital assets, enabling transactions, and enforcing smart contracts for controlling business processes. With Iroha, companies can use blockchain to perform common functions using simple commands, thereby increasing efficiency, reducing manual effort and the chances of errors. 

Hyperledger Sawtooth – Hyperledger Sawtooth is a modular platform that aims at keeping the ledger truly decentralised while ensuring that the blockchain-based solution is performing optimally and securely. Sawtooth does this by separating the core ledger system from the application, but facilitating the system as a whole to run efficiently. Developers can build applications in the language of their choice and run them on the system periphery, while the core blockchain system continues to run interruptedly. Sawtooth’s special consensus algorithm – Proof of Elapsed Time (PoET), makes for low utilization of resources and energy consumption, thereby making the blockchain application sustainable. 

At Turing Labs, we specialise in developing robust, easy-to-use and scalable Hyperledger solutions. For queries, you can reach out to us here – sales@turinglabs.io

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