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Blockchain – Hyperledger vs Ethereum

  • Last Updated : 14 Sep, 2021

In the world of blockchain, Hyperledger and Ethereum are the two of the most popular blockchain platforms. Both are open source. Besides solving numerous industry-level problems they have also been helpful to create a large number of blockchain applications. As blockchain technology grows and a lot of developers are coming in this question comes very often, ‘Which blockchain platform to use? and When to use blockchain technology?’ to answer this question it is very important to understand the differences between these two blockchains.

What is Ethereum?

Ethereum is a public, distributed, decentralized, and community-built technology that is designed to carry out smart contracts (a script that, when called with certain parameters, performs some actions or computation if certain events are triggered. 
In the Ethereum blockchain, there is a single, canonical state of computer called the Ethereum Virtual Machine. As it is a public and decentralized platform, every node on the network agrees with the state of this virtual machine and keeps a copy of the state of this computer. Whenever a new block is added to the Blockchain, it will be added to the global copy of the network that exists within all the nodes of the network.

What is Hyperledger?

Hyperledger is an open-source platform for building distributed ledger solutions, with a modular architecture that delivers high degrees of confidentiality, flexibility, resiliency, and scalability. This enables solutions developed with this platform to be adapted for any industry.  This is a private and confidential blockchain framework managed by the Linux Foundation.

Differences Between Ethereum And Hyperledger

Below are the key differences between Ethereum and Hyperledger:

1. Purpose:



  • Ethereum is the platform for creating B2C businesses and decentralized applications. It is created for the purpose of running smart contracts on the Ethereum Virtual Machine(EVM) and creating decentralized apps for mass consumption with the help of this.
  • Hyperledger is designed to create B2B businesses and cross-industry applications. It helps the businesses or industries to collaborate with the developers, who are working with Distributed Ledger Technology(DLT). Customized blockchain apps with limited access can be created with this.

2. Confidentiality:

  • Ethereum is a public network. All the transactions are entirely transparent and anyone with access to the internet can view these transactions.
  • Hyperledger is limited access or allowed blockchain network. This is highly secured and confidential. The organizations or individuals having the Certificate of Authorization can only view all the transactions on the network.

3. Governance:

  • The Ethereum network is governed by the Ethereum developers only. Vitalik Buterin is the main developer and founder of Ethereum. This is mostly an example of in-house development rather than collaboration.
  • Hyperledger fabric is governed by the Linux Foundation. IBM is also one of the major contributors to this framework. It is a product of the massive collaboration of these two companies which turned out to be a huge success.

4. Participation:

  • Ethereum is a permission-free and public network. Anyone with access to the internet can download the software and start mining Ethereum.
  • Hyperledger maintains strict control over the participation in this network. Only the authorized members and the peers selected by the authorized members can use the Hyperledger platform and its tools. This hides valuable and confidential information from external parties and prevents them to manipulate it.

5. Smart Contracts:

  • Ethereum came up with smart contracts first. A Smart Contract is a computer program or a condition written in code that gets automatically triggered when certain conditions are met. It controls the transfer of digital assets between the parties under the contract. It is immutable, once the condition is created it cannot be changed by any third party.
  • Like the smart contracts, Hyperledger fabric also allows the member organizations to run some code on peers that create the transactions on a specific condition. These are known as chaincode.

6. Programming Language:

  • For writing smart contracts, Ethereum uses solidity and for developing the application some high-level languages like JavaScript, Python, Golang can be used.
  • In Hyperledger Go is widely used to write the chaincode along with that some extent of Java and JavaScript are also used.

7. Proof-Of-Work (POW) or Consensus Mechanism:

  • As Ethereum is a decentralized network a Proof-Of-Work (POW) mechanism or consensus mechanism runs throughout the blockchain. It allows the participant nodes of the decentralized network to come to a consensus or agree on things like account balances and the order of transactions which prevents the users from making fake transactions and double-spending their coins.
  • As Hyperledger is a private and permissioned network, it does not need any POW or consensus mechanism to validate a transaction. If two participating parties agree on a specific transaction then no third party can view or intervein the specific transaction. This helps to improve the scalability and the transaction rates as well as the performance of the entire network.

8. Speed of Transactions:

  • As Ethereum is a public domain it has a POW mechanism, which reduces the transaction speed of Ethereum. That is something close to 20 transactions per second.
  • For being a permissioned blockchain network, Hyperledger fabric does not need such a heavy POW mechanism like Ethereum. That increases the transaction speed. That is around 2000 transactions per second. Which is far larger than Ethereum.

9. Cryptocurrency:



  • Ethereum has its own native cryptocurrency called ETHEREUM(ETH). Any participating node can mine ETH by paying gas.
  • Hyperledger does not have its native cryptocurrency and it does not involve in mining.

Feature

Ethereum

Hyperledger

Confidentiality

Public blockchain

Private blockchain

Purpose

Client-side B2C applications

Enterprise-level B2B applications

Governance



Ethereum Developers

Linux Foundation

Participation

Anyone

Organizations having Certificate of Authorization

Programming Language

Solidity

Golang, JavaScript, or Java

Consensus Mechanism

POW- Proof of Work Mechanism

Pluggable consensus mechanism

Speed of Transactions

Less

More

Cryptocurrency

Ether or Ethereum

None

When to use what?

The used cases of Ethereum and Hyperledger are mentioned below:

Ethereum:

  • Public or B2C applications: When the developer or developing organizations intend to create decentralized applications for customer use, they can use Ethereum smart contracts. With Ethereum anyone can join the network and create a node. Every such node possesses a copy of the entire blockchain.
  • Community-led open-source applications: These applications do not need any confidentiality, which is developed and hosted by blockchain developer communities around the world. They can be developed using Ethereum.

Hyperledger:

  • Private or B2B Applications: Businesses don’t want to keep their confidential data on a public blockchain like Ethereum.  As a permissioned blockchain network, Hyperledger can solve this problem. It offers the facility to create a blockchain application maintaining the privacy of the information of the organization.
  • Create customized blockchain algorithms: When an organization or a business wants to define its own and unique blockchain algorithms Hyperledger can be very useful. In Hyperledger projects, the whole underlying infrastructure of the blockchain can be modified. This flexibility stands out to be a great tool while making customized blockchain applications for business purposes.

Unique problems need unique and customized solutions. Both Hyperledger and Ethereum are helpful to solve unique business-side and client-side problems. They both have their own advantages and disadvantages. The selection between these two tools is based on the requirements of the project as they both have different used cases. 




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