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  • Writer's pictureDale Montrone

Enforcing Blockchain Powered Smart Contracts: Ethereum & Hyperledger

In a “Smart Contract”, the terms of the agreement between two contracting parties or entities are directly written into lines of software code using a programming language like C or Solidity [1].

Such a Contract is generally executable meaning that the adjudication process is automated based on the terms embodied in the software code and the enforcement is controlled and carried out by the software code itself. A Smart Contract typically runs on a private or public Blockchain Platform. Examples of such platforms are Hyperledger [2] and Ethereum [3].

Hyperledger[4] 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.

Ethereum[5] is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middleman or counterparty risk.

The Ethereum project was bootstrapped via an Ether presale in August 2014 by fans all around the world. It is developed by the Ethereum Foundation, a Swiss non-profit, with contributions from great minds across the globe. A comparison between Ethereum and Hyperledger would be as follows according to Techracers [6].

There are different versions of Hyperledger. For this comparison, we will use Hyperledger Fabric which is an open source platform.

The most fundamental difference between Ethereum and Hyperledger is the way they are designed and their target audience. Ethereum with its Ethereum Virtual Machine (EVM), smart contract and public block chain is mostly targeted towards applications that are distributed in nature and are for mass consumption. A look at Ethereum dapps (distributed applications) seem to hint the same:

On the other hand, Hyperledger Fabric has a very modular architecture and provides a lot of flexibility in terms of what you want to use and what you don’t. It’s pretty much ala carte and is targeted at businesses wanting to streamline their process by leveraging blockchain technology.

For example, it is not possible in Ethereum to have a transaction visible to someone, but not visible to others (a requirement that is very common in business). Hyperledger Fabric allows this.

Another major difference is the consensus algorithm used in Ethereum versus Hyperledger Fabric. Ethereum uses PoW (Proof of work), whereas Hyperledger Fabric allows one to choose between No-op (no consensus needed) and PBFT (Practical Byzantine Fault Tolerance). PoW is known to be energy sucker and could really impact the practicality of using Ethereum in the long run. However, one must mention that Ethereum too is trying to move towards proof of stake in its next release Casper.

Ethereum has a built-in cryptocurrency (Ether) and thus can be a very good match for applications that need this inbuilt. However, this could also be a disadvantage as there are several use cases where the cryptocurrency is not really needed.

Both of these platforms have their pros and cons and in future most enterprise apps would get tilted towards Hyperledger Fabric, whereas Ethereum would be preferred for cryptocurrency and other B2C applications.

DomaniSystems’ development roadmap supports both the Hyperledger and Ethereum Platforms.


[2] Online Reference:

[3] Online Reference:

[4] Online Reference:

[5] Online Reference:

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