Ethereum Blockchain Solutions for Business: Pros and Cons

Ethereum is currently recognized as the most popular public blockchain network for the development of decentralized applications (DApps) and smart contracts. Its potential blockchain protocol is one of the few crypto-currency projects to be really adopted, with dozens of applications that can be divided into 11 main categories: open finance, decentralized exchanges, games, collectibles, markets, tools development, identity, governance, etc. infrastructure, token registries and ERC (Ethereum Request for Comments) tokens. So, it seems to be leading the field of business blockchain solutions.

Ethereum is contributing to the Internet revolution with the creation of the decentralized Web – or Web3 – that facilitates peer-to-peer (P2P) transactions (that is, without intermediaries). This means that Ethereum's blockchain technology is gradually changing the P2P economy of the Internet by allowing to control technologies and applications that we use a lot.

Ethereum uses three main methods: The first is to make money (cryptocurrency) a native feature of the Internet; the second is to decentralize applications to provide users with new features, such as the contribution of users to open government data; and third, by giving users control over their data and digital identities.

Adoption of the real world Ethereum

Ethereum has demonstrated, among more than 2,000 crypto-currencies, how blockchain technology can be adopted in the real world, by both individuals and businesses.

Since the creation of Ethereum in 2015, more than 2500 DApps built on the Ethereum blockchain.

The Enterprise Ethereum Alliance is a consortium of more than 450 companies, including Microsoft, JPMorgan Chase, Santander, Accenture, ING, Intel, Cisco and others.

Companies implementing Ethereum blockchain technology

Microsoft and Amazon have started using the Ethereum protocol to allow users to create and manage blockchains through their BaaS platforms (Cloud Computing as a Service) – namely Microsoft Azure in May 2019 and Amazon Managed Blockchain Plus early in April.

These BaaS platforms could contribute to the growth and adoption of Ethereum. In addition, they also provide access to Ethereum variants, such as the JPMorgan Quorum Block Chain, which is an enterprise-based, Ethereum-based, open source blockchain platform.

The Quorum blockchain has so far been exposed to more than 250 global banks via the Quorum Interbank Information Network (IIN) and is now usable by more companies via BaaS platforms.

The JPMorgan Quorum blockchain is a private or licensed version of Ethereum, but major developments are also taking place on the Ethereum public blockchain. For example, Big Four accounting firm Ernst & Young (EY) recently released a public protocol called Blockfall, called Nightfall. This protocol is a privacy tool based on the zk-SNARKs protocol that allows large businesses and businesses requiring confidentiality through a chain of blocks to tap the Ethereum public network.

Why large companies and companies choose Ethereum

Ethereum seems to be the main string of chains among companies. For example, more than 50 percent of the billion-dollar businesses listed in Forbes' Blockchain 50: Billion Dollar Babies list develop applications over Ethereum or derive from platforms.

Here are some of the main reasons why these companies choose Ethereum:

1. First advantage of the mover: Ethereum is the first programmable blockchain that integrates into its blockchain a complete language with smart contract functionality.

2. It is a well planned project: The majority of crypto-currencies are quite spontaneous, appear and die quickly. Ethereum, meanwhile, is a very credible project based on its sustainable history – in comparison to other cryptographic projects – with its white paper published in 2013 and its launch in 2015.

The project has a clear roadmap and vision for scaling up to make its blockchain technologically relevant for years to come. The project will evolve with the release of Ethereum 2.0, a major upgrade released in four phases over the next two to three years.

3. It's an open system: Ethereum's public blockchain is an open system, which means that everyone can participate in the project and contribute to its growth and development. This is a major benefit because it allows anyone to develop and improve their ecosystem. Closed or private blockchain platforms such as Hyperledger, Hashgraph, Corda, etc. do not generate the same network effect as open systems such as Ethereum.

4. He has mbadive support: Ethereum has the largest community of developers working on its blockchain protocol. Hundreds of thousands of developers are working on the Ethereum ecosystem. This project is supported by medium-sized companies and large companies. In addition, Ethereum Enterprise Alliance and Hyperledger continuously monitor and contribute to the development of the project.

5. Private transactions: Ethereum allows businesses to achieve a level of privacy by forming private consortia with private transaction layers. Quorum of JPMorgan would be a good example. In addition, companies can now obtain confidentiality on the Ethereum public blockchain with Ernst & Young's Nightfall protocol.

6. Rapid deployment: It's easy for developers and businesses to get started with Ethereum. All-in-one BaaS platforms such as Microsoft Azure and Amazon Managed Blockchain, as well as software as a service (SaaS) platforms such as ConsenSys, supported by ConsenSys, are trying to enable companies to easily develop their own blockchain networks. New tools and development kits are being released continuously so that Ethereum can easily be adopted by businesses and businesses.

7. interoperability: Businesses can develop Ethereum-based private / licensed blockchain networks and connect them to the main Ethernet network to take advantage of the large, active, high-value public channel chain and all elements of its ecosystem. Pantheon by PegaSys is an example. This is Ethereum's first corporate customer compatible with the public channel. In total, Ethereum interoperability essentially supports enterprise blockchains as it provides global reach, an extensive network of users and DApps, and continuous development and upgrades.

8. Investment: The Ethereum native Ethereum cryptocurrency price has increased by more than 9,000% since its launch. Early users and investors have benefited from an exceptional return on investment and the prices of the FITs should continue to increase over time.

Ethereum price table 4 years. Courtesy of Coin360

The adoption of the Ethereum protocol, new symbolic methods – such as staking, which pays essentially substantial dividends, as well as the 10% reduction in ETH emissions by 2021 – fuel the rise in ETH prices. and investors mbadive returns on investment.

Disadvantages of Ethereum for the company

Ethereum is perhaps the most advanced block chain for enterprise solutions, but it is not the ideal and comprehensive solution, but it has some disadvantages. Among the main business concerns for Ethereum are:

1. Scalability: The main problem posed by Ethereum is its scalability. Transactions are still very slow because Ethereum's public blockchain can only handle about 15 to 20 transactions per second (GST), compared to 45,000 processed by Visa. Companies require a very large number of transactions and Ethereum can not yet offer it on its main public network.

Source: Cointelegraph Analytics

However, the authorized variations of the Ethereum blockchain are not subject to the same constraints as the public Ethereum and can process much faster than 15-20 GST. Therefore, Ethereum has somewhat solved this problem for the moment, as companies can develop these private Ethereum block strings and link them to the public Ethereum block chain, when it can evolve. Earlier this month, Ethereum co-founder, Vitalik Buterin, suggested using the Bitcoin Cash blockchain as a time-based solution to solve Ethereum network scalability issues.

2. Uncertainty: Another major drawback of Ethereum for companies is that the project is still under development and the system may fail during the process. For example, for Ethereum to evolve, it needs to move from a Work Proof Consensus (PoW) algorithm to a Proof of Consensus (PoS) consensus algorithm in the Ethereum 2.0 upgrade. This is a very serious change – and if it does not go well, the whole system may fail.

3. Competition: Although Ethereum is at the forefront of blockchain adoption in business, it is competing with other blockchain protocols that are more scalable than Ethereum. These competitors include EOS, Cardano, Stellar, Neo, TRON and others. In addition, Ethereum will compete with new blockchain protocols that have not even been launched yet, such as Hedera Hashgraph, Polkadot and Telegram Open Network (TON).

Ethereum 2.0: How will this change the company's interaction with the ecosystem?

Ethereum currently suffers from a number of issues and limitations related to its blockchain technology, including interoperability, economic and transactional scalability, security, stability, governance, and so on. However, the team behind Ethereum is tackling these issues by radically overhauling the protocol via the Ethereum 2.0 upgrade.

As Buterin said:

"Ethereum 1.0 is a rambling attempt by a few people to build the global computer; Ethereum 2.0 will actually be the world's computer. "

To make Ethereum "the world's computer", the upgrade will introduce three main components that will contribute to the success of the protocol and will be adopted as a standard by companies:

• Switch from the energy intensive PoW consensus algorithm to a PoS consensus algorithm. Ethereum owners will be able to play with a minimum of 32 ETH or pool their ETH. This will allow more participants to join the network, making Ethereum 2.0 more decentralized, resilient and secure.

• Implementation of scaling second layer network scale solutions, such as sharding, that will allow Ethereum transactions on a parallel substring. This sizing solution will be combined with Plasma channels and will allow Ethereum to handle a larger volume of transactions – "tens of thousands of decentralized transactions per second," according to Ethereum co-founder Joseph Lubin.

• The Ethereum Virtual Machine (EVM), which is the engine responsible for deploying DApps on the blockchain, will be completely reorganized and run on a new programming code called WebAssembly (WASM). This part of the upgrade will increase the speed, usability and security of Ethereum.

In addition, Ethereum 2.0 is delivered in seven distinct phases and the first three phases – Phase 0 – Beacon Chain, Phase 1 – Basic Shrapnel and Phase 2 – eWASM – are expected to last at least a year and a half before the end of the deployment. implemented. and its launch is scheduled for the beginning of 2020. It simply means that the delivery of Ethereum 2.0 will take a lot of time and that we can expect delays, as has been the case for the main business of Ethereum 2.0. Ethereum, Constantinople. fork that saw several delays and was quite difficult to implement.

As one of the oldest players in the cryptography industry, Ethereum has gained credibility with companies. In addition, the real applications of its protocol cover 11 broad categories that may be of interest to companies. In addition, the large Ethereum developer community, which is working on blockchain protocol enhancements, could be considered a technology advantage. At the same time, Ethereum is constantly facing update delays, low scalability and burgeoning competitors.

Overall, Ethereum could easily be replaced by a blockchain rival protocol that can deliver on its promises and expand its blockchain network more quickly. After all, it is still very early in this innovative world of blockchain technology and there are still no clear winners.

Do you think Ethereum will continue to be the main chain of blocks for blockchain business solutions or will another project be more efficient? Tell us what you think in the comment section below.

The views, thoughts and opinions expressed here are only the authors and do not necessarily reflect the views and opinions of Cointelegraph.