The complete guide to understanding Hyperledger Besu

“We have no features” is one of the early slogans of Ethereum that perfectly captures the design philosophy that led to the creation of the world’s second most popular blockchain protocol. Ethereum was designed to be a Turing-complete, general-purpose blockchain, capable of supporting all kinds of applications through the execution of smart contracts. Its creators and early contributors sought to provide a solid foundation upon which more specialized Layer 2 solutions could be built.

While Ethereum’s journey is still far from complete, this approach has so far been a success. The protocol has been able to maintain a broad appeal and attract a variety of blockchain projects, ranging from games and customer apps to innovative financial services and fundraising tools. The technology’s versatility has also appealed to businesses, with a number of big corporations having displayed a keen interest in using Ethereum for building enterprise-grade solutions. Naturally, this has created a need for Layer 2 platforms that could bring form and function to the blank canvas provided by Ethereum. Among the projects aiming to do so is the subject of this article, Hyperledger Besu.

What is Hyperledger Besu?

If you’ve been watching the blockchain space, chances are that you’re familiar with the Hyperledger name. It’s an umbrella project of open-source blockchain protocols and tools that was started by the Linux Foundation in 2015. The project is largely known for its Hyperledger Fabric component, which is one of the most prominent permissioned protocols in the blockchain space.

While they both exist under the Hyperledger umbrella, Fabric and Besu have little in common in terms of the underlying technology. More specifically, whereas Fabric is a private protocol designed from the ground up to support enterprise-grade solutions, Besu seeks to utilize the public Ethereum network.

Besu is a Java-based Ethereum client that implements the Enterprise Ethereum Alliance (EEA) specification and can be run on the public network or on private networks, as well as on a number of testnets. The project, formerly known as Pantheon, joined the Hyperledger family in 2019, adding for the first time a public blockchain implementation to Hyperledger’s suite of private blockchain frameworks. Besu’s development has been helmed by Pegasys — an engineering team linked to Consensys.

So what is an Ethereum client? It is a piece of software designed to implement the Ethereum protocol to address specific use cases. Ethereum clients come with these core components:

- An execution environment for processing transactions in the Ethereum blockchain.
- Storage for transaction-related data.
- Peer-to-peer (P2P) networking tools for communicating with other Ethereum nodes on the network.
- Application programming interfaces (APIs) allowing developers to interact with the Ethereum blockchain.

Connecting Hyperledger and Ethereum — benefits

Hyperledger Besu’s enterprise features are designed to adhere to requirements of the EEA client specification, including creating common interfaces among the various Ethereum Enterprise projects. The Besu client is designed to be highly modular to ensure that key blockchain features such as consensus algorithms can be easily implemented and upgraded. The goal here is to provide businesses with the means to easily configure Ethereum according to their needs while enabling smooth integration with other Hyperledger projects.

Hyperledger Besu features

For enterprises looking to create robust blockchain solutions, Besu provides a host of useful features, including:

The Ethereum Virtual Machine (EVM): the EVM is what enables the deployment and execution of Ethereum smart contracts.
Consensus algorithms: in addition to a proof-of-work algorithm, Besu also features several proof-of-authority protocols, which are well suited for use in blockchain consortia or other private networks where the participants know one another.
P2P networking: by leveraging Ethereum’s devp2p network protocols, Besu is able to facilitate inter-client communication.
Storage: Hyperledger Besu utilizes a RockDB key-value database to persist chain data locally. The data is divided into two sub-categories — blockchain data and world state data.
Permissioning: while Besu leverages the public Ethereum mainnet, it also provides businesses with the means to create permitioned networks by specifying which nodes and accounts can participate in those networks.
Privacy: Besu uses a Private Transaction Manager to ensure the privacy of transactions between counterparties.
User-facing API: the client provides mainnet Ethereum and EEA JSON-RPC APIs over HTTP and WebSocket protocols. It also supports a GraphQL API.
Monitoring: Hyperledger Besu utilizes tools such as Prometheus and Block Explorer to allow for users to monitor node and network performance, respectively.

Hyperledger Besu technical overview

We can see how this all ties together by examining how Besu is designed and structured. At the heart of it is the core Hyperledger Besu architecture, shown in the figure below.

Source: https://besu.hyperledger.org/en/stable/Concepts/ArchitectureOverview/

The client architecture consists of three main components: Ethereum core, Storage, and Networking. Some of the client’s main features, including the EVM and consensus, are part of the Ethereum core. The EVM is supported by two additional components — a transaction processor and a block validator — which help it run more efficiently. The Ethereum core also includes a transaction pool responsible for storing transaction-related information and a synchronizer, which facilitates the synchronization between the nodes and the network.

While the core client architecture is relatively simple, it can be easily expanded with plugins. This approach is what enables Hyperledger Besu’s modularity. People can use some of the existing open-source Besu plugins or build their own plugins with the help of the Plugin API, which provides access to interfaces facilitating plugin development. The Plugin API also allows developers to take data from any Besu network and then feed it to their own applications and systems.

Hyperledger Besu consensus algorithms

We already mentioned that Besu comes with several consensus protocols to choose from. As an Ethereum implementation, proof-of-work is a given, but the proof-of-authority options are perhaps more interesting for enterprise-related projects. Besu has two PoA options, Clique and IBFT 2.0, with both of them coming with their own distinct characteristics, advantages, and disadvantages.

For starters, IBFT 2.0 has immediate finality, which ensures that all valid blocks get included in the main chain. In contrast, Clique lacks immediate finality, meaning that implementations using that consensus protocol are vulnerable to forks.

In terms of validators, IBFT 2.0 requires a minimum of four to be Byzantine fault-tolerant. Meanwhile, Clique can operate with only one validator, though relying on a single validator means that there is no protection mechanism in case that validator fails.

On a related note, Clique is more fault-tolerant than IBFT 2.0, as it tolerates as much as half of the validators failing. In comparison, IBFT 2.0 requires at least two-thirds of validators to be operational to create blocks.

Finally, Clique outperforms IBFT 2.0 when it comes to blocking generation speed. However, the risk of forks occurring on Clique networks grows as the number of validators increases. Meanwhile, IBFT 2.0 networks are bound to experience increasing block generation times as they add more validators.

Practical Use Case for Hyperledger Besu

Hyperledger Besu’s comprehensive set of features gives the platform considerable versatility, which makes it well suited for supporting a wide range of use cases. Its smart approach to utilizing the Ethereum blockchain affords developers enough flexibility to build public or permissioned solutions based on the specific requirements of each use case.

The pharmaceutical industry is one of the areas where Hyperledger Besu could make a significant impact. Besu’s signature trait is that it can leverage mainnet Ethereum without compromising data privacy, which can be extremely valuable when operating in an industry that involves dealing with both stringent regulation and sensitive data.

The Besu framework can also be utilized to a great effect in any sector that relies on complex supply chains. Here you can find a detailed piece on why blockchain technologies, including Hyperledger Besu, are perfect for handling complex supply chain processes and systems.

Hyperledger Besu documentation and resources

If you want to learn even more about Hyperledger Besu, a good place to start is the project’s website, which contains detailed information about the client and its features. Those who really want to take a deep dive into the technical aspects of Besu and perhaps even consider contributing to the project, Besu’s GitHub repository is probably the next logical step.

Also worth checking out is this video from a webinar discussing a recent major release from the Pegasys team:

Looking ahead

Hyperledger Besu is already an impressive piece of technology and a powerful tool for building world-class enterprise-grade technologies. It still remains to be seen whether Besu would achieve widespread enterprise adoption amid stiff competition. The Hyperledger family offers other viable alternatives, including what’s probably the most popular enterprise-grade blockchain protocol — Hyperledger Fabric. What’s more, Besu is not the only Enterprise Ethereum implementation out there, with J.P. Morgan’s Quorum having been established as a prominent player in that space.

Still, Hyperledger Besu has every chance of succeeding. It is a versatile tool backed by a talented team of developers that continues to work on expanding the technology’s scope and capabilities. It has the potential to appeal to a wider range of businesses than its Enterprise Ethereum competitor, as Quorum arguably has a narrower focus with an emphasis on the financial services sector. As part of the Hyperledger family, Besu has access to some common tools and can re-use components from other Hyperledger projects. Finally, Besu can act as a bridge between the enterprise world and Ethereum, introducing businesses to the benefits of the public blockchain without compromising their requirements for privacy.

Still wondering if Besu is the right technology for your project. Do not hesitate to contact us at [email protected] and we will help you test, prove and develop your idea.

Originally published at https://limechain.tech on January 26, 2021.

Hyperledger Besu Explained — LimeChain was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

Choosing blockchain technology for supply chain management solutions

The complexities of modern supply chains necessitate the implementation of robust solutions capable of handling the numerous challenges encountered in the field of supply chain management. The rise of information technology and the growing sophistication of software development provided the means to build complex ERP (enterprise resource planning) solutions capable of addressing the problem. Yet, there is still plenty of room for improvement, especially in relation to eliminating inefficiencies and ERP integration across separate organizations.

Enter blockchain. We’ve already explored how blockchain supply chain solutions can transform the sector in our “ Blockchain for supply chain management” piece. In short, the technology can help streamline SCM processes making them more cost-effective, increase transparency across a supply chain, ensure secure storage of records, combat counterfeiting, and other fraudulent activities.

An important thing to consider here is that blockchain is not a singular technology. There are many blockchain protocols and while they are largely built on similar underpinning principles, they usually shine in different areas. The goal of this article is to help you choose the right distributed ledger technology for your blockchain supply chain solution.

Public or private?

The first thing to consider is whether to use a public or a private blockchain. Both models have distinct sets of advantages and disadvantages. For example, the technology’s biggest strengths are on full display in public blockchain protocols. Public blockchains like Ethereum offer a high level of decentralization, trustlessness, and transparency and use sophisticated hash algorithms to ensure maximum security. However, this doesn’t mean that they are the optimal blockchain technology and supply chain solution for every case. Their transparency, for example, can be an issue for businesses as they usually deal with sensitive data and don’t want to reveal their trade secrets.

Meanwhile, private protocols allow companies to take advantage of many of blockchain’s properties without the risk of public exposure of sensitive information. In addition, since private blockchain networks typically consist of verified members, they can use simplified hash and consensus algorithms which allows for greater speed. Naturally, the tradeoff here is that private protocols become less secure than their public counterparts. Also, private networks require a certain level of trust to be maintained between stakeholders.

Below we’ll be focusing on private blockchains, as despite their shortcomings, they seem to be better suited for building solutions to connect a limited number of supply chain partners than public protocols. However, we’ll also take a look at how we can combine the two approaches and utilize their distinct advantages.

Private protocols

While public protocols have been hogging the spotlight for years with flashy applications like cryptocurrencies and token offerings, the private blockchain space has been working on delivering practical enterprise-grade solutions. This has led to the development of a number of private protocols, each coming with its own set of goals, strengths, and limitations. Some are tailored to the needs of specific industries, while others seek to accommodate a broader range of applications. Here are two of the best private protocol options for building blockchain supply chain solutions:

Hyperledger Fabric

One of the most prominent projects in the private blockchain sector, Hyperledger Fabric aims to provide a solid foundation for developing applications or solutions. The platform’s modular design enables unmatched flexibility when developing an application or solution. Developers can choose from a wide range of integrations and plug-and-play components like consensus, privacy and membership services. Having so many options on offer makes Hyperledger Fabric perfect for addressing a large variety of use cases.

Hyperledger Besu

While it’s developed under the same umbrella project as Fabric, Hyperledger Besu is an entirely different beast. Besu is an Ethereum client designed to support the development of both public and private permissioned network solutions. This means that development is similar to that on the Ethereum mainnet, but companies have the ability to restrict access to their networks, thanks to the platform’s comprehensive permissioning schemes.

One big advantage of this approach is that private networks developed on Besu can benefit from concepts and mechanisms that have been tested and established on Ethereum. As an example, if a private supply chain solution is deemed to need its own token, developers can utilize one of the three standards already established on Ethereum.

Hybrid protocols

Private blockchain protocols are great for building enterprise solutions that ensure data privacy, but as we mentioned above, smaller networks cannot preserve some of blockchain technology’s key strengths. Immutability and trustlessness, for example, are among the traits that make the technology so useful in supply chain management. And those two characteristics are most pronounced in public networks. So isn’t there a way to combine the best of both worlds? The short answer is yes. Now for the longer version.

One way to do so is to utilize the so-called hybrid approach, where most of the supply chain management is handled on a private network connecting the various stakeholders in a particular supply chain. At the same time, a public blockchain protocol acts as a frame of reference, storing encrypted proof of all the work that has been done on the private network. This way, companies can utilize public networks’ immutability without exposing their sensitive data to external parties.

Baseline

Even more interesting is the Baseline Protocol, an open-source project that aims to enable private solutions on the public Ethereum mainnet. The protocol utilizes various cryptographic techniques and instruments like zero-knowledge proofs and signatures, as well as peer-to-peer messaging protocols, to synchronize private business processes via the public blockchain while preserving confidentiality, privacy, and data security. This essentially removes the need for trust between stakeholders, as it ensures that every organization involved in a particular supply chain adheres to the same rules set by the Ethereum mainnet.

Conclusion

In the end, your choice of technology will be determined by your needs and preferences, as well as the needs and preferences of your supply chain partners. If you want to taste the benefits of public blockchains, but without compromising your data, perhaps Baseline will be the solution for you. If your goal is to develop versatile and highly customizable private solutions, Hyperledger Fabric is probably your best bet. And if you want private supply chain solutions that benefit from the years of research and development done on Ethereum, Hyperledger Besu deserves to be on your radar.

Originally published at https://limechain.tech on November 12, 2021.

Choosing technology for blockchain solution for supply chain was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

With New Year just a few days away, it is once again time to reflect on the previous 12 months and look ahead to the next year.

Making predictions for the future of the ever-changing blockchain space is a difficult task, but with enough experience and knowledge about the industry, spotting emerging trends becomes easier. With that in mind, we turned to our resident blockchain whizzes — LimeChain co-founder George Spasov and leading blockchain architect Daniel Ivanov — to learn how they see the DLT space evolving over the next 12 months. Here’s what they had to say.

DeFi maturation

Twenty twenty has been a challenging year in many respects, but there have also been some major developments in the blockchain space. For example, this was the year that saw decentralized finance exploding onto the scene. Encouraged by DeFi’s potential, many talented developers jumped on the opportunity to experiment with the concept and develop dApps aimed at democratizing finance. Those early efforts helped establish prominent DeFi services, such as Uniswap, Compound, and Yearn.finance, which introduced people to new ways to earn money and access funds. However, they’ve also produced some less promising results.

According to Dani, the DeFi concept will be fleshed out and the space will mature over the next 12 months. The lessons learned during this year’s largely experimental phase in DeFi’s development will be applied to future projects in the sector. And as developers gain a deeper understanding of DeFi’s potential and limitations, never-before-seen services will continue to emerge. This year saw the emergence of yield farming and flash loans, which were only made possible through DeFi applications. Dani expects new and exciting DeFi services to pop up in 2021.

Meanwhile, George points to the variety of existing DeFi dApps, noting that the majority of popular products have their own takes on the DeFi concept, which makes them suitable for different applications. For that reason, George doesn’t think that we are likely to see consolidation in the DeFi space anytime soon. Instead, he expects that the DeFi landscape will become even more diverse over the next 12 months.

Another major development was the beginning of Phase 0 of the Ethereum 2.0 project which was marked by the launch of the Beacon Chain earlier this month. The Beacon Chain will introduce proof-of-stake to the Ethereum protocol. It is also an important first step in introducing chain shards, because they require staking to work securely.

“ The launch will likely prompt exchanges and other major ETH holders to start offering staking services aimed at people who want to participate in the Beacon Chain, but do not have the crypto to do so, “ Dani tells us.

On the technical side, 2021 will likely see Eth 2.0 growing and evolving through the launch of testnets.

Central bank digital currencies

Considerable progress has also been made this year with regards to central bank digital currencies, with the People’s Bank of China launching a pilot for its digital yuan project in four major Chinese cities. With the pilot having gained some traction, the viability of CBDCs has become more apparent. Dani explains why these could be valuable instruments for central banks:

“ Central banks currently rely on commercial banks to roll out their monetary policies among the general population. In CBDCs, central banks will have tools to directly interact with the end consumer. These instruments will also enable central banks to quickly allocate funds, for example, financial aid for the most vulnerable or badly hurt during a crisis. “

While it’s difficult to predict whether CDBCs will be among the leading trends in 2021, Dani is convinced that there will be major developments in that space in the next five years.

Growing interest from governments

Initiatives such as CBDC research and development are indicative of the growing interest blockchain is drawing from governing bodies around the world. Multiple countries across Asia, including China and Singapore, have been quite active in their efforts to utilize the technology and become leaders in that space.

Closer to home, the European Union has identified blockchain development as a key part of the bloc’s strategy for building a digital economy. The launch of the European Blockchain Services Infrastructure (EBSI) — a network of distributed nodes aimed at delivering cross-border public services across Europe — reflects the EU’s significant interest in blockchain. Our colleagues expect 2021 to provide further evidence of the EU’s growing commitment to blockchain adoption.

From PoC to MVP

This year, the enterprise sector again showed hesitation to move past the proof-of-concept stage when it comes to blockchain solutions. The positive here is that the knowledge gained as a result of all that experimentation and prototyping could embolden businesses to take the next step and start developing minimum viable products and even more sophisticated solutions.

George expects businesses to start seeing blockchain primarily as a valuable tool for building solutions connecting various organizations across a single supply chain. The technology’s potential in supply chain management is already widely recognized and it’s time to be actively explored. The next year could see major developments on that front.

In contract, George anticipates that there would be diminishing interest in blockchain consortia. He argues that competing businesses have so far seen negligible benefits from joining forces to form such networks.

The journey continues

Being only a few days away from the New Year, we cannot help but feel excited about the future of blockchain. History has shown that no matter what happens, the sector continues to evolve. One chapter ends, another begins. The blockchain journey continues, often in unexpected, but exciting new directions.

Our experts anticipate that the blockchain sector will find new ways to surprise us in 2021 and beyond. Perhaps the growing interest in non-fungible tokens would spark a boom in the fledgeling market for digital art and memorabilia. Or maybe the video game industry would embrace digital tokens to fuel a new breed of virtual economies . We cannot wait to see what the future holds.

Here’s to 2021 and another exciting blockchain ride!

Originally published at https://limechain.tech on December 23, 2020.

On the cards: how will blockchain space evolve in 2021? was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

Energy is the fundamental currency of the universe. This of course includes the ‘Pale Blue Dot’ that so graciously hosts humankind. In fact, the entire history of human civilization can be accurately described as a never-ending pursuit to satisfy humanity’s growing energy needs. Every big technological leap we’ve made throughout history has been in some way linked to the discovery of new energy sources or the better utilization of existing ones. Meanwhile, our ability to utilize energy sources has always hinged on building, maintaining, and managing infrastructure.

This is where blockchain could have its biggest impact on the sector, especially in combination with other innovative technologies that are already changing power generation, energy distribution, and consumption. Blockchain is perfect for laying the foundation of the energy grid of the future. Here’s why.

Advantages of blockchain in energy sector

Cost reduction

The energy sector typically relies on complex networks and supply chains involving numerous participants. Oil production and distribution, for example, involves a number of stages, including exploration, extraction, refining, transportation, and marketing. Blockchain technology can help organize the different parties involved in those activities, thus ensuring frictionless communication, speeding up processes, and eliminating inefficiencies across the supply chain. Such optimizations can lead to considerable cost savings for an organization.

Improved transparency

Another valuable feature of blockchain technology is its ability to improve transparency across a network of multiple parties. Since every member in a given blockchain network has their own copy of the blockchain ledger, the information recorded on that ledger is easily verifiable. What’s more, blockchain’s immutability guarantees that the records already stored on the ledger cannot be changed. This can also improve regulatory compliance across the industry.

All this can be achieved without companies having to give up control over their sensitive data. This is very important in an industry that relies heavily on trade secrets.

Decentralization and programmability

Blockchain’s decentralized nature means that peer-to-peer networks powered by the technology can run without the need for oversight from a central authority. Additionally, transactions between network participants can be regulated programmatically, via smart contracts. This hints at the level of security that could be achieved in such systems, but it also gives an idea of how blockchain can support innovation across the energy sector.

Blockchain energy can help speed up the adoption of smart meters and smart grids to enable more efficient energy use. The technology can also help connect end-users directly with the grid.

Digitalization

Another interesting property of blockchain technology is its ability to digitize physical assets. With the help of smart contracts, any asset can be digitized and stored on a blockchain in the form of tokens. This has the potential to transform energy commodity trading, as well as create new ways for people to trade excess energy, carbon credits, and others.

How can blockchain be implemented in the energy sector?

Given the potential benefits of blockchain for the energy industry, it is not surprising that companies are showing keen interest in the technology. Here are some of the most promising use cases for blockchain energy application.

Wholesale energy distribution

Blockchain technology could change the way end-users receive electricity. Blockchain-based systems could eliminate the need for retailers by connecting users directly to the grid. This way, users would be able to get electricity at wholesale prices, which would reduce their utility bills considerably.

One company that’s working to solve this problem is Grid+. Branched out from the ConsenSys team, Grid+ is a blockchain energy company that seeks to utilize blockchain-based systems to manage services such as billing and metering, which are typically performed by retailers.

Peer-to-peer energy trading

With energy storage capabilities expected to grow significantly in the next few years, the landscape of electricity distribution could see even bigger transformations. Households and condominiums relying on autonomous power supply systems already have the option to sell their excess energy to the grid. Blockchain could take this concept a step further by powering peer-to-peer networks of individual electricity suppliers and buyers. Blockchain-based platforms could be used to track energy stores, as well as handle transactions between energy consumers and suppliers with the help of smart contracts.

Together with continued advancements in batteries, the development of such platforms could be key to achieving widespread adoption of renewable energy.

Tokenization of energy

This possible shift to a new supply-and-demand dynamic could be made even more likely with the help of tokenization. ‘Digitizing’ excess energy as tokens that could be easily traded or converted back into energy supply could revolutionize the way consumers access, receive, and use energy. It could enable convenient pay-as-you-go schemes and prompt the emergence of new types of marketplaces where ‘energy tokens’ would be exchanged as commodities.

Tokenization could also help track and reduce carbon emissions by simplifying the issuance, distribution, and exchange of carbon offset credits.

Electric vehicles

The aforementioned concepts can be applied to build the foundation of a future electric vehicle ecosystem. Blockchain technology could be used to power networks of charging stations and connected vehicles participating in a shared economy. In such an economy, transactions would be conducted in energy tokens that could be spent at charging stations or exchanged by drivers and autonomous vehicles.

Rewarding the use of renewable energy

The use of clean, renewable energy needs to be incentivized in order for renewables to achieve commercial viability. Subsidies and tax breaks are some of the measures governments traditionally employ when they aim to spur commercial activity in a particular sector. Meanwhile, blockchain technology could offer a way to incentivize adoption at the consumer level. Specifically, companies could implement reward programs for rewarding customers with energy tokens for choosing clean energy sources.

Conclusion

If we consider the millennia of human history, for example, the validity of the statement at the beginning becomes undeniable. Energy is, indeed, the fundamental currency of the universe. This realization can come as a surprise given our tendency to make up our own rules to govern human society. Not only do we have our own currencies — USD, GBP, etc. — we’ve also created artificial borders, time zones, daylight savings, scales and measurements, Santa… We are so good at making up things to organize our lives that it’s often tempting to consider that perhaps our made-up rules can be more valid than the laws of nature.

Of course, nothing can further from the truth. However, this doesn’t mean that thought experiments and purely theoretical concepts are without merit. Sometimes such constructs reveal fundamental truths about our reality. Sometimes they spark a revolution.

In the 19th century, Charles Babbage invented purely on paper his famous Difference Engine — the grandfather of all computers. Some 160 years later, a person more enigmatic than Santa used some peculiar mathematical properties to devise a way to propel the computer revolution even further. Their white paper and subsequent work laid the foundations for an informational technology that one day might change the way we handle the fundamental currency of the universe.

Revolutions are born from big, bold ideas that often seem too fantastical to be achievable. At LimeChain, we believe that with hard work, decisive leadership, and a clear vision anything can be achieved. We would love to help bring your ideas to fruition. Let’s start the next blockchain revolution at hi@limechain.tech.

Originally published at https://limechain.tech on November 25, 2020.

Blockchain in the energy sector was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

“We have no features” is one of the early slogans of Ethereum that perfectly captures the design philosophy that led to the creation of the world’s second most popular blockchain protocol. Ethereum was designed to be a Turing-complete, general-purpose blockchain, capable of supporting all kinds of applications through the execution of smart contracts. Its creators and early contributors sought to provide a solid foundation upon which more specialized Layer 2 solutions could be built.

While Ethereum’s journey is still far from complete, this approach has so far been a success. The protocol has been able to maintain a broad appeal and attract a variety of blockchain projects, ranging from games and customer apps to innovative financial services and fundraising tools. The technology’s versatility has also appealed to businesses, with a number of big corporations having displayed a keen interest in using Ethereum for building enterprise-grade solutions. Naturally, this has created a need for Layer 2 platforms that could bring form and function to the blank canvas provided by Ethereum. Among the projects aiming to do so is the subject of this article, Hyperledger Besu.

If you’ve been watching the blockchain space, chances are that you’re familiar with the Hyperledger name. It’s an umbrella project of open-source blockchain protocols and tools that was started by the Linux Foundation in 2015. The project is largely known for its Hyperledger Fabric component, which is one of the most prominent permissioned protocols in the blockchain space.

While they both exist under the Hyperledger umbrella, Fabric and Besu have little in common in terms of the underlying technology. More specifically, whereas Fabric is a private protocol designed from the ground up to support enterprise-grade solutions, Besu seeks to utilize the public Ethereum network.

Besu is a Java-based Ethereum client that implements the Enterprise Ethereum Alliance (EEA) specification and can be run on the public network or on private networks, as well as on a number of testnets. The project, formerly known as Pantheon, joined the Hyperledger family in 2019, adding for the first time a public blockchain implementation to Hyperledger’s suite of private blockchain frameworks. Besu’s development has been helmed by Pegasys — an engineering team linked to Consensys.

So what is an Ethereum client? It is a piece of software designed to implement the Ethereum protocol to address specific use cases. Ethereum clients come with these core components:

- An execution environment for processing transactions in the Ethereum blockchain.- Storage for transaction-related data.- Peer-to-peer (P2P) networking tools for communicating with other Ethereum nodes on the network.

— Application programming interfaces (APIs) allowing developers to interact with the Ethereum blockchain.

Connecting Hyperledger and Ethereum — benefits

Hyperledger Besu’s enterprise features are designed to adhere to requirements of the EEA client specification, including creating common interfaces among the various Ethereum Enterprise projects. The Besu client is designed to be highly modular to ensure that key blockchain features such as consensus algorithms can be easily implemented and upgraded. The goal here is to provide businesses with the means to easily configure Ethereum according to their needs while enabling smooth integration with other Hyperledger projects.

Hyperledger Besu features

For enterprises looking to create robust blockchain solutions, Besu provides a host of useful features, including:

the EVM is what enables the deployment and execution of Ethereum smart contracts. in addition to a proof-of-work algorithm, Besu also features several proof-of-authority protocols, which are well suited for use in blockchain consortia or other private networks where the participants know one another. by leveraging Ethereum’s devp2p network protocols, Besu is able to facilitate inter-client communication. Hyperledger Besu utilizes a RockDB key-value database to persist chain data locally. The data is divided into two sub-categories — blockchain data and world state data, while Besu leverages the public Ethereum mainnet, it also provides businesses with the means to create permissioned networks by specifying which nodes and accounts can participate in those networks. Besu uses a Private Transaction Manager to ensure the privacy of transactions between counterparties. the client provides mainnet Ethereum and EEA JSON-RPC APIs over HTTP and WebSocket protocols. It also supports a GraphQL API. The Ethereum Virtual Machine (EVM):
Consensus algorithms:
P2P networking:
Storage:
Permissioning:
Privacy:
User-facing API:
Monitoring: Hyperledger Besu utilizes tools such as Prometheus and Block Explorer to allow for users to monitor node and network performance, respectively.

Hyperledger Besu technical overview

We can see how this all ties together by examining how Besu is designed and structured. At the heart of it is the core Hyperledger Besu architecture, shown in the figure below.

Source: https://besu.hyperledger.org/en/stable/Concepts/ArchitectureOverview/

The client architecture consists of three main components: Ethereum core, Storage, and Networking. Some of the client’s main features, including the EVM and consensus, are part of the Ethereum core. The EVM is supported by two additional components — a transaction processor and a block validator — which help it run more efficiently. The Ethereum core also includes a transaction pool responsible for storing transaction-related information and a synchronizer, which facilitates the synchronization between the nodes and the network.

While the core client architecture is relatively simple, it can be easily expanded with plugins. This approach is what enables Hyperledger Besu’s modularity. People can use some of the existing open-source Besu plugins or build their own plugins with the help of the Plugin API, which provides access to interfaces facilitating plugin development. The Plugin API also allows developers to take data from any Besu network and then feed it to their own applications and systems.

Hyperledger Besu consensus algorithms

We already mentioned that Besu comes with several consensus protocols to choose from. As an Ethereum implementation, proof-of-work is a given, but the proof-of-authority options are perhaps more interesting for enterprise-related projects. Besu has two PoA options, Clique and IBFT 2.0, with both of them coming with their own distinct characteristics, advantages, and disadvantages.

For starters, IBFT 2.0 has immediate finality, which ensures that all valid blocks get included in the main chain. In contrast, Clique lacks immediate finality, meaning that implementations using that consensus protocol are vulnerable to forks.

In terms of validators, IBFT 2.0 requires a minimum of four to be Byzantine fault-tolerant. Meanwhile, Clique can operate with only one validator, though relying on a single validator means that there is no protection mechanism in case that validator fails.

On a related note, Clique is more fault-tolerant than IBFT 2.0, as it tolerates as much as half of the validators failing. In comparison, IBFT 2.0 requires at least two-thirds of validators to be operational to create blocks.

Finally, Clique outperforms IBFT 2.0 when it comes to blocking generation speed. However, the risk of forks occurring on Clique networks grows as the number of validators increases. Meanwhile, IBFT 2.0 networks are bound to experience increasing block generation times as they add more validators.

Practical Use Case for Hyperledger Besu

Hyperledger Besu’s comprehensive set of features gives the platform considerable versatility, which makes it well suited for supporting a wide range of use cases. Its smart approach to utilizing the Ethereum blockchain affords developers enough flexibility to build public or permissioned solutions based on the specific requirements of each use case.

The pharmaceutical industry is one of the areas where Hyperledger Besu could make a significant impact. Besu’s signature trait is that it can leverage mainnet Ethereum without compromising data privacy, which can be extremely valuable when operating in an industry that involves dealing with both stringent regulation and sensitive data.

The Besu framework can also be utilized to a great effect in any sector that relies on complex supply chains. Here you can find a detailed piece on why blockchain technologies, including Hyperledger Besu, are perfect for handling complex supply chain processes and systems.

Hyperledger Besu documentation and resources

If you want to learn even more about Hyperledger Besu, a good place to start is the project’s website, which contains detailed information about the client and its features. Those who really want to take a deep dive into the technical aspects of Besu and perhaps even consider contributing to the project, Besu’s GitHub repository is probably the next logical step.

Also worth checking out is this video from a webinar discussing a recent major release from the Pegasys team:

Looking ahead

Hyperledger Besu is already an impressive piece of technology and a powerful tool for building world-class enterprise-grade technologies. It still remains to be seen whether Besu would achieve widespread enterprise adoption amid stiff competition. The Hyperledger family offers other viable alternatives, including what’s probably the most popular enterprise-grade blockchain protocol — Hyperledger Fabric. What’s more, Besu is not the only Enterprise Ethereum implementation out there, with J.P. Morgan’s Quorum having been established as a prominent player in that space.

Still, Hyperledger Besu has every chance of succeeding. It is a versatile tool backed by a talented team of developers that continues to work on expanding the technology’s scope and capabilities. It has the potential to appeal to a wider range of businesses than its Enterprise Ethereum competitor, as Quorum arguably has a narrower focus with an emphasis on the financial services sector. As part of the Hyperledger family, Besu has access to some common tools and can re-use components from other Hyperledger projects. Finally, Besu can act as a bridge between the enterprise world and Ethereum, introducing businesses to the benefits of the public blockchain without compromising their requirements for privacy.

Originally published at https://limechain.tech on January 26, 2021.

Hyperledger Besu Explained was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

Among the many potential use cases for blockchain, finance is arguably the most prominent one. The technology’s inception, in the form of Bitcoin, was prompted by the 2008 financial crisis, which had devastated the global economy. The traditional financial system had crashed, forcing governments to issue huge stimulus packages to prop up economies and bail out failing banks.

Blockchain aims to address many of the weaknesses that were exposed during the global financial crisis. In this piece, we’ll examine what are the use cases for blockchain in banking and why this nascent technology can help alleviate the sector’s biggest pains.

Advantages of blockchain in banking

The banking industry has been around for centuries serving as a facilitator for a variety of financial and economic activities, including trading, lending and borrowing, transaction processing and settlement, underwriting, and so on. However, this longevity has led to stagnation, with the sector becoming over time slow to adapt to the rapidly changing realities of the digital age.

Implementing new technologies can help modernize the sector. Here’s what blockchain brings to the table:

Cost reduction

Banks today still rely on outdated and inefficient systems to facilitate communication and coordination across large networks of counterparties. Various banking activities, clearing, and settlement, for example, are in need of solutions that can improve speed and efficiency.

Applying blockchain technology can provide such a solution. As a secure and efficient peer-to-peer method for data distribution, blockchain technology can eliminate inefficiencies across an organization, reduce the reliance on intermediaries, and deliver significant cost savings for the industry as a whole. A 2017 report by Accenture found that big investment banks could save $10 billion by utilizing blockchain to improve the efficiency of their clearing and settlement operations.

Robust security

In recent years banks have been scrambling to strengthen their security systems and safety procedures following a number of high-profile data breaches. Cyber attacks, technical glitches, and human error have hit the industry hard, exposing the financial data of thousands of customers. Faced with these challenges, some lenders have in recent years been trying to unlock blockchain’s potential to improve their security systems.

Blockchain can bolster bank security in a number of ways. Firstly, the technology can be used to develop robust know-your-customer (KYC) solutions, as the cryptographic protection it offers guarantees that the identities of all members of a blockchain network are verified. In addition, the information can be easily shared among all members of the network, while also reducing the need for intermediaries to handle data distribution.

The decentralized nature of blockchain also eliminates single points of failure, which reduces the risk of data breaches considerably.

Some blockchain protocols offer an additional layer of protection in the form of smart contracts that enable automatic transactions when certain requirements are met.

Instant payments and money transfers

Blockchain protocols are already starting to challenge the banking industry in terms of payments and other money transfers, so it’s not surprising that many lenders are examining closely what the technology has to offer. For cross-border payments, in particular, adopting blockchain could be a real boon for the sector.

To process payments across borders, banks today rely primarily on the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a vast messaging network that handles the transfer of information between member banks. But with blockchain, lenders are connected directly to each other, thus removing the need for such intermediaries. It should also be noted that SWIFT has seen its share of hacks in the past few years, which further bolsters the case for adopting blockchain.

Mathew McDermott, head of digital assets at Goldman Sachs, told CNBC in August that in the next five to 10 years, “you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on-chain”.

Digital currency

One intriguing application of blockchain in banking comes from its ability to digitize physical assets. This means that blockchains can host, among other things, a large variety of digital currencies.

We’re already familiar with traditional cryptocurrencies like Bitcoin, as well as stablecoins that are pegged to a fiat currency/asset or a basket of currencies/assets. These types of projects typically exist outside the traditional banking and finance sector. In recent years, however, a number of commercial and central banks have been working on their own digital currency projects.

Perhaps most prominent is the effort by the People’s Bank of China (PBoC), which is working on launching its own Central Bank Digital Currency (CBDC). The DC/EP (Digital Currency/Electronic Payments), as the CBDC is called, is currently being piloted in several large Chinese cities.

In the commercial banking space, US banking giant J.P. Morgan Chase last week its own digital currency dubbed JPM Coin. The coin runs on J.P Morgan’s proprietary blockchain Quorum, with the bank having plans to extend it to other platforms in the future.

Reduced error

As already mentioned, smart contracts can be used to automatically handle money exchange between counterparties. Among the benefits of this approach are minimizing the element of trust needed to reach an agreement, as well as reducing the risk of errors.

How can blockchain be used in banking?

Accounting and audit

Blockchain’s ability to store immutable records can have a profound effect on how accounting, bookkeeping, and audit is done across the banking sector. The technology can help in this domain by reducing paperwork, streamlining traditional bookkeeping methods, and ensuring that records are readily available for audit. Regulatory compliance across the sector will likely improve significantly as a result.

So far, the four major auditors — PwC, KPMG, Ernst & Young and Deloitte have shown interest in blockchain.

Borrowing and lending

One of the hottest blockchain trends in recent years, DeFi (decentralized finance), aims to transform many aspects of traditional finance, including borrowing and lending. DeFi’s goal is not to improve the banking industry, but rather to challenge it head-on by making financial services more accessible to retail consumers. To learn more about how DeFi is enabling the development of innovative services like peer-to-peer lending and borrowing apps, we recommend reading our piece on decentralized finance.

However, blockchain can also be used to boost lending and borrowing activities facilitated by banks. The technology’s robust verification capabilities could reduce the risk of bad loans. In addition, blockchain can make sure that borrowers are not criminals or bad actors, which will boost banks’ know-your-customer (KYC) and anti-money-laundering (AML) capabilities.

Another area where blockchain can help is syndicated loans. Large loans to corporate clients are typically provided by a group of banks. This is a complicated process that requires coordination between the lenders and can take up to 19 days. One big hurdle here is compliance with KYC and AML regulatory requirements. The traditional method necessitates all banks involved in the processing of a syndicated loan to ensure KYC and AML compliance independently. However, blockchain technology allows for a bank that has already completed the compliance procedures to securely share that information with the other participants in a loan, thus simplifying the process considerably.

In 2016, Credit Suisse, Ipreo, Symbiont, and R3 formed a consortium to work on enabling syndicated loans on blockchain systems. Using solutions from Synaps Loans, the consortium successfully completed a proof of concept in 2017.

Trade finance

Blockchain is well suited to improve one area where modernization has been well overdue. Even today, trade finance relies mostly on paperwork, which is distributed by fax or mail across the world. Blockchain could be the technology to finally put an end to this and usher in an era of rapid digitalization across space.

Trading

DeFi has already demonstrated that there is a growing interest in decentralized marketplaces and exchanges. While at the moment those are happening outside the banking industry, lenders could be tempted to embrace the concept. As discussed earlier, blockchain could completely transform clearing and settlement operations, which are a key component of a trading business.

Fundraising

Banks have traditionally managed most forms of fundraising such as initial public offerings. The advent of initial coin offerings (ICOs) a few years ago sought to challenge the traditional models, by allowing start-ups to issue and sell crypto tokens to investors. While highly controversial, the ICO trend sparked a new way of thinking about fundraising and eventually led to the birth of security token offerings (STOs), a much more mature version of the original concept.

If the trend continues to grow, it is not unreasonable to expect that banks might start looking for ways to tap into space.

Conclusion

While blockchain was initially designed to offer an alternative to traditional finance, it is now drawing interest from the financial institutions it was meant to rival. After years of downplaying and ever ridiculing the technology, banks are now realizing that the benefits of blockchain can no longer be ignored. Many applications of blockchain in banking offer ways to improve the sector’s existing operations and procedures. However, it is also likely that in the future banks would be implementing blockchain solutions designed to exist outside the traditional system. If that happens, the blockchain challenge to the sector will have been successful.

At LimeChain, we want to help make this a reality. We recently did a two-day workshop for Raiffeisen Bank, advising them how blockchain technology could be best utilized for the benefit of the sector. If you want to draw from our expertise on the blockchain in banking, please drop us a line at hi@limechain.tech.

Originally published at https://limechain.tech on November 9, 2020.

Blockchain in banking was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

If we could have only one takeaway from Einstein’s teachings it has to be that everything is relative. In other words, how something is perceived, depends on the specific frame of reference of the observer. The famous scientist defined this concept in relation to natural phenomena, but it can also be used in a more metaphorical sense.

We recognize this intuitively when it comes to time. Hours pass in the blink of an eye when you chase an important deadline. Minutes stretch into hours during a sleepless night. A decade can feel like an eternity when it comes to the crazy rollercoaster that has been the blockchain space…

The publication in 2009 of Satoshi Nakamoto’s seminal paper “Bitcoin: A peer-to-peer electronic cash system” heralded the arrival of one of today’s most promising emerging technologies — blockchain. But while the paper sparked excitement and curiosity among a niche group of technology enthusiasts, blockchain had a long way to go to showcase its worth to the rest of the world. It has been a long and difficult journey, but after 11 years of rapid development, as well as plenty of skepticism, controversy, and drama, it’s finally starting to feel that the blockchain has truly arrived on the scene.

This sentiment is becoming increasingly prevalent in the world of big business. Published in March of this year, Deloitte’s latest Global Blockchain Survey reveals that business leaders “no longer consider the technology groundbreaking and merely promising-they now see it as integral to organizational innovation “. For a technology whose viability has been so often questioned by businesses and industry bodies across the world such a shift in perception is an undeniable success and deserves to be celebrated. It sends a strong signal that while blockchain’s journey may not be finished, the tech is on the path to achieving widespread adoption.

Let’s take a look at the trends that seem poised to dictate big business’ interest in blockchain in the coming years.

Tokenization and digital assets

While blockchain’s ability to store assets digitally in the form of tokens has been among the most prominent applications of the technology, development in that area has been mostly driven by blockchain-focused outfits and projects. However, the potential of tokenization and digital assets has not gone unnoticed in the corporate world.

According to Deloitte’s 2020 Global Blockchain Survey, some 89% of respondents expressed belief that digital assets would be very or somewhat important to their industries in the next three years. Notably, 53% of respondents thought that digital assets would be very important.

This strong vote of confidence is not surprising, given the many benefits digital assets, tokenized assets, in particular, have to offer. Those benefits include: enabling frictionless trading of physical assets on secondary markets; making large assets, such as property, divisible, and increasing historical transparency. We explore the subject in much more detail in our latest e-book, “The complete guide to bringing digital assets to market”.

Digital identity

Another area attracting strong corporate interest is digital identity. Deloitte’s survey shows 90% of respondents saying that a global digital identity would be a very or somewhat important part of their blockchain strategy going forward. Business leaders primarily see financial transactions and data privacy/ownership as the likely areas where digital identity could have the biggest impact. However, the survey also cautions that while most business leaders agree on the importance of digital identity, tangible progress is yet to be made in this area.

Still, there have been some promising developments in this field. Most notably, Microsoft has been working in partnership with ConsenSys and Transmute to develop a blockchain-agnostic protocol for creating scalable decentralized identity (DID) networks, called Sidetree. Last year the US tech giant a preview of the Identity Overlay Network, a Sidetree-based DID running atop the Bitcoin blockchain. The company has continued to be active in the space throughout 2020.

Blockchain consortia

One trend that has been growing steadily in recent years involves the continued creation of blockchain consortia. These joint organizations see a group of companies joining a blockchain network to achieve some common goals. Not only such memberships help companies to better utilize blockchain technology, but they also promote cooperation in groups of traditionally competing entities. This certainly helps blockchain’s chances to achieve widespread enterprise adoption.

Some of the most prominent blockchain consortia include Ethereum Enterprise Alliance, Hyperledger, R3, RippleNet, and Marco Polo, among others.

The COVID-19 effect

One factor that cannot be overlooked is the impact that the global pandemic of COVID-19 has had on blockchain initiatives and strategies across the enterprise sector. According to research firm Forrester, the pandemic has forced companies to put long-term and more experimental projects on hold. At the same time, however, the crisis has boosted the pursuit of practical blockchain solutions that bring tangible benefits in the short term. Forrester predicts that 30% of projects will make into production next year.

According to IBM Blockchain’s general manager, Allistair Rennie, the prediction is in line with data observed by IBM.

“Due to the increased strain that the pandemic put on supply chains, clients are finding there is a dire need to accelerate their digital transformation to emerge stronger than before,” Rennie told Cointelegraph in a recent interview. “We are seeing both expansions of existing blockchain projects and new ones. The most successful of these are the ones that are underpinned by solid business use cases and have a clearly defined value to add to the business.”

The fact that in these times of crisis businesses are turning to blockchain suggests that the technology has a bright future in the enterprise sector. And while the journey may be far from over, it’s encouraging that the technology has managed to pick up some company along the way.

Originally published at https://limechain.tech on November 25, 2020.

Enterprise blockchain: Key trends propping DLT sentiment across big business in 2020 and beyond was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

The financial services sector has always presented some of the strongest use cases for the nascent blockchain technology. From online payments and remittance to cryptocurrency storage and trading, blockchain has been coming up with ways to challenge traditional finance from day one. After the recent emergence of the decentralized finance (DeFi) movement, the case for blockchain in finance has become much stronger.

The term DeFi, short for decentralized finance, is used to describe a variety of blockchain-powered applications aimed at creating peer-to-peer alternatives to traditional financial services and institutions. Having generated a lot of excitement last year, decentralized finance has kept powering ahead, attracting impressive amounts of capital and meeting expectations that it would be among the leading trends of 2020.

According to DeFi Pulse, the go-to data aggregator for decentralized finance, the total value locked in DeFi protocols currently stands at just under $11.5 billion, up from less than $1 billion a year ago. While this certainly pales in comparison to traditional financial markets, the key takeaway here is that DeFi has grown more than tenfold over the past 12 months. This is a clear sign of decentralized finance’s surging popularity. What’s most encouraging is that rapid growth seems to reflect the strength of DeFi’s value proposition. Let’s examine what makes decentralized finance such an investment draw.

The benefits of decentralized finance

The DeFi movement promises to bring a lot of benefits to customers and investors, including eliminating intermediaries and central oversight, making financial markets more accessible to retail investors, and creating new investment opportunities. To achieve their lofty ambitions, DeFi developers are making use of some fundamental properties of blockchain technology.

Permissionless

The term ‘decentralized finance’ is already a clear indication of what the DeFi movement considers to be its defining feature. That’s hardly surprising. Decentralization is at the heart of blockchain’s value proposition. The aim is to move away from relying on corporations and other institutions for oversight, server space, data storage, and so on. Blockchain networks achieve this by ensuring that one transaction history is shared among all of their members.

The decentralized approach can help democratize banking and finance by ensuring easy access to financial services for everyone.

Most DeFi apps run on Ethereum, the second-largest blockchain protocol, after Bitcoin. As a permissionless (public) blockchain, Ethereum is highly decentralized and readily accessible to anyone interested in building or using a DeFi app. In addition, the permissionless nature of the blockchain, as well as the interoperability it enables, opens the door for all kinds of third-third party integrations.

Transparency

With decentralization also comes greater transparency. Since the distributed ledger containing information about all the activities that have taken place on a blockchain network is shared by everyone, the network’s data is publicly available for inspection. Furthermore, the cryptographic principles underpinning blockchain guarantee that information is recorded only after its authenticity has been verified.

For customers, the transparency afforded by DeFi applications can be a game-changer. It can improve due diligence and help people identify and avoid potential financial scams and harmful business practices.

Immutability

Through the clever use of cryptography and consensus algorithms like proof-of-work, blockchain technology achieves true immutability. This guarantees that manipulating records stored on a blockchain network is practically impossible. In combination with the features we already discussed, this creates a level of security that’s difficult, if even possible, to achieve with traditional means.

DeFi apps bring the inherent advantages of blockchain to the financial sector, while also striving to create convenient interfaces to ensure a smooth user experience. In addition, employing smart contracts such as dApps provide extra protection against bad actors and fraudulent transactions.

How can DeFi help the financial services sector?

From what we’ve seen so far, DeFi certainly has the potential to benefit traditional finance. But as with any transformative technology, DeFi’s potential is not limited to just improving on the current status quo. Rather, its true strength lies in its ability to disrupt the space by enabling new types of financial products and services. Even at this early stage, the technology is showing great promise in that regard. It is already changing the way people manage their assets, borrow and lend money, and trade online. Here are just some of DeFi’s most prominent use cases:

Lending and borrowing

DeFi has enabled the development of peer-to-peer lending and borrowing solutions that bring significant benefits to the end-user. These services come with cryptographic verification mechanisms and smart contract integration that eliminate intermediaries such as banks that typically verify and process lending and borrowing transactions. This makes the process much cheaper and faster, while still making sure that the counterparties involved in a transaction are protected. Other benefits include instant settlement of transactions and greater accessibility.

Savings

The growing popularity of DeFi lending platforms has opened up new ways for people to manage their savings. As mentioned above, by locking their crypto assets into lending protocols such as Compound, users start earning interest on those assets. This has led to the emergence of DeFi saving apps that can plug into different lending protocols to maximize their users' ability to earn interest. The term ‘yield farming’ has been introduced to describe the increasingly popular practice of users moving their idle crypto assets around in different lending protocols to get higher returns.

Dharma, Argent, and PoolTogether are among the most popular savings dApps on the market today.

Tokenization

The Ethereum boom from a few years ago led to the emergence of one of blockchain’s most important trends — tokenization. The protocol’s robust smart contract capabilities enabled the issuance of crypto tokens — digital assets that exist on a blockchain and can have various properties and uses. These range from utility tokens that are native to a specific dApp, security tokens that can be likened to digital shares, real estate tokens enabling fractional ownership over physical properties, and more.

Tokens can also provide exposure to other assets — physical and digital — such as oil, gold, fiat currencies, and cryptocurrencies. These so-called crypto synthetic assets are collateralized by tokens locked into Ethereum-based smart contracts. One of the most popular synthetic asset platforms, Synthetix, currently has almost $600 million locked in smart contracts.

You can read more about asset tokenization in our latest e-book, titled “ Bringing Asset Tokenization to Market “.

Stablecoins

Closely related to crypto synthetic assets, stablecoins are crypto tokens pegged to a stable asset or basket of assets. In most cases, stablecoins are pegged to fiat currencies like the US dollar, but there can also be commodity-pegged and cryptocurrency-pegged tokens. Stablecoins aim to reduce the price volatility of cryptocurrencies and strengthen the case for using blockchains as payment solutions.

We can identify three types of stablecoins based on the method used to maintain their value. Collateralized stablecoins require the coin issuer to hold the assets against which their coin is pegged (fiat currency, gold, silver, etc.). Other coins are pegged to cryptocurrencies and their value is maintained by over-collateralization and stability mechanisms. Finally, there are also non-collateralized tokens whose prices are kept at fixed levels algorithmically.

Stablecoins are in many ways what fuels the DeFi engine. They’re widely used across the space to enable remittance, lending and borrowing, and other DeFi services.

Marketplaces

DeFi is also starting to impact the way we exchange goods and services online. An example of this is the recent emergence of decentralized exchanges (DEXes), which facilitate peer-to-peer trading of digital assets. Uniswap is one of the major players in this category.

The concept can be easily expanded to include traditional financial instruments and even physical goods, as well as services. One of Limechain’s clients, Idoneus, is utilizing smart contracts and other blockchain features to create a new way for people to buy, sell, rent, and trade luxury goods. Learn more about how LimeChain has been helping Idoneus reinvent the luxury asset market.

Conclusion

Given DeFi’s stellar growth in 2020, it’s hard not to feel optimistic about the future of the space. The new year will likely bring new challenges, but with interest in DeFi being on the rise, fresh opportunities will also arise.

At LimeChain, we are excited about DeFi’s future and we’re eager to contribute to the sector’s success. Do you have an idea for the next groundbreaking DeFi app? Let’s talk about how we may be able to help you build it at hi@limechain.tech.

Originally published at https://limechain.tech on November 9, 2020.

Decentralized finance (DeFi) was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

The Internet of Things is a virtual network in which billions of physical devices are connected (these devices are what represent the in the name).

Items like smart TVs, wearable technology, and other smart appliances are all interconnected in the IoT.

They sustain these connections through software, various sensors, and other technological components, and are able to perform data exchange with other devices and systems via the internet.

Given that estimates have projected there to be between 21 billion “things” included in the IoT by 2025, the need for security, and blockchain in IoT security has risen exponentially.

With that said, let’s dive in and explore how blockchain impacts the IoT industry today.

What Does Blockchain Do for IoT?

Blockchain is a type of that is designed with the following goals in mind: distributed ledger technology (DLT)

* Cut overhead costs in security and transactions across numerous industries* Streamline supply chains * Increase data security
* Eliminate massive amounts of record-keeping

In the case of IoT, blockchain functions primarily (but not exclusively) as a basis for applications that involve transactions and interactions between users in order to preserve security.

One unique application that is utilized and commended by many is the implementation of smart contracts

These are scripts that are automatically carried out when specific conditions in the contract are met.

As long as all the conditions are suitable, the contract will self-execute since the terms of the agreement are written directly into the code.

This is the same technology that combats hackers’ knowledge through its advanced encryption features, and at the same time, makes data history more transparent for users.

This is why blockchain is considered immutable by some industry leaders due to its persistence in securities and compliance.

By incorporating blockchain in the IoT, the following can be achieved:

* Distributors can trace back past transactions
* IoT devices will be protected against hacking through encryption and the nature of data distribution within the network

If you want to learn more about some real-life blockchain and IoT projects, just ping us at hi@limechain.tech.

Blockchain IoT Applications that Overcome Industry Challenges

There are many challenges currently facing the IoT industry.

Operational challenges, along with compliance and security issues, are among the most pressing at the moment.

While blockchain applications, like smart contracts, are meant to streamline the processes between IoT users, they also pose some serious accountability problems. This is primarily due to the fact that these processes are almost entirely automated, and users are unable to control them.

* Allowing IoT devices to communicate safely with each other, * Inventing new avenues for digital interactions between buyers and sellers (with fewer costs)

Improvements to blockchain technology help solve these problems by reducing the complexity of such automation by:

We will explore some of those improvements and benefits below.

The Benefits of Blockchain in IoT

There are three key benefits of how the IoT industry today benefits from the implementation of blockchain:

Trust. There will be more opportunities for IoT users to establish trust between their devices and the IoT network. With blockchain technology, the risks of tampering with personal information are greatly reduced.

Cost Efficiency. Costs related to IoT processes and devices are significantly reduced. Users will be removing the middleman and other intermediaries in the IoT industry, getting rid of overhead costs almost entirely.

Speed. Transactions performed via IoT processes will be significantly accelerated. Instead of having to drag settlements out for several days at a time, users will instead experience a near-instantaneous settlement time.

Investments in the development of blockchain solutions are expected to reach $11.7 billion worldwide by 2022.

This is why if there was any time to take advantage of this rapidly growing technology, it is now.

IoT for Commercial Applications

Blockchain IoT has a variety of applications in commercial industries. Whether the market is in retail or automotive manufacturing, this technology has enhanced innovations in many fields.

Retail business owners use blockchain IoT for both present and future applications.

The tech is only in its infancy for this industry, but retail experts are optimistic about many ongoing use cases.

For example, you can see how it is currently being applied to the supply chain management, capturing “data trails” to better monitor the shipments of commercial products. Walmart and IBM are using the tech to manage data concerning food traceability for monitoring foodborne illnesses.

Blockchain IoT is currently being used to verify identity and authenticity in the retail sector as well. This helps to reduce the distribution of counterfeit products and combat instances of theft.

Manufacturers will be able to detect occurrences of trademark infringement and will be alerted when products are duplicated illegally. For further protection, resellers will only be allowed to sell upon verifying ownership to the rightful parties.

You can also see in the automotive industry, that blockchain IoT assists the development of smart technology by integrating sensors and autonomous capabilities in newer models.

Vehicles will be more reliable in their ability to collect and share data between:

* The vehicle owner
* The vehicle’s manufacturer
* Auto shop dealers

With the integration of blockchain technology into IoT processes, users across multiple industries and disciplines will begin to experience strengthened security and improved compliance like never before.

The applications for this technology are seemingly endless.

If your company is in need of assistance in the development of dApps or other blockchain IoT technologies, contact the experts at LimeChain.

We will work alongside you to build the solutions that will keep your transactions, along with all other virtual activities, as secure as possible.

Originally published at https://limechain.tech on July 8, 2020.

Blockchain and Rise of IoT (Internet of Things) was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.

Creating more user-centric blockchain & DLT products is the next big step towards wider adoption. Better Design & UX are tools that will make this change.

Here at LimeChain, we’re thrilled to share our new strategic partnership with the leading design and technology agency Athlon. LimeChain and Athlon will join forces to help companies build native and user-friendly blockchain solutions.

As decentralized technologies become more and more popular and companies search for ways to implement that new technology in their businesses, the need for design and UX practices increases. Digital disruption and new technologies are great, but when it comes to onboarding clients and users it might be challenging. That is why we need a user-centric approach to building the “new internet”.

“We have been working with Athlon for quite some time now and we are happy to have them by our side. They have the maturity and experience to work on complicated projects where others can’t. What LimeChain is for blockchain, Athlon is for UX Driven Development & Design, and we are happy to join forces with like-minded people. Their long-standing experience in R&D and product design gives us the advantages and new perspectives in understanding our customers’ needs and delivering outstanding blockchain solutions” — Nick Todorov, CEO, and co-founder at LimeChain.

“Decentralisation and DLT were on our agenda for the past few years and we have been involved in some interesting projects. Blockchain as a technology has now transformed to be a viable and reliable tool to solve business problems. We have decided to push our agenda forward by partnering with our friends at LimeChain — Mihajlo Nikolic, CTO, and founder at Athlon.

Both teams combine powerful insights, creativity, and know-how from Athlon studio with LimeChain’s knowledge and strong experience in building blockchain solutions to help businesses drive digital transformation.

For more information on the partnership please contact us at hi@limechain.tech

About Athlon

Athlon is a digital product development agency, partnering with global brands, and creating a best-in-class brand and product experiences. Based in Europe, Asia-Pacific, and North America, Athlon has a unique team of experts working at the intersection of UX, brand, and technology to help industry disruptors accelerate product innovation. Trusted by enterprises and scale-ups as their R&D and acceleration agent, Athlon has been innovating with its clients for the past decade.

About LimeChain

LimeChain specializes in helping enterprises and blockchain startups design, build, and scale Blockchain & DLT Solutions. LimeChain focuses on providing a full spectrum of Blockchain development & Consulting services that result in comprehensive, user-friendly solutions that drive our clients’ business forward. We have been a trusted partner to over 50+ Enterprises and Blockchain entrepreneurs, helping them realize their vision using Blockchain & Decentralised Ledgers Technologies. More at limechain.tech and

Originally published at https://limechain.tech on June 10, 2020.

Athlon and LimeChain Join Forces to Help Companies Design and Build Decentralized Solutions was originally published in LimeChain on Medium, where people are continuing the conversation by highlighting and responding to this story.