Blockchain – Hyperledger vs Ethereum

Hyperledger and Ethereum are currently two of the most popular blockchain platforms and both are open source. Besides solving numerous industry-level problems they have a wide range of real world applications.

As blockchain technology grows a lot of developers have grown confused between the two and often wonder which one is better. We are here to offer a solution by explaining how they differ from each other.

What is Ethereum?

Etherum is a public, distributed, decentralised, and open source blockchain originally designed for the execution of smart contracts. Smart contracts refer to a codebase that, when called with certain parameters, performs specified actions or computation when demanded.

In the Ethereum blockchain, there is a single, canonical state of the computer called the Ethereum Virtual Machine. Since it is a public and decentralised platform, every node on the network agrees with the state of this virtual machine and maintains a copy of the state of this computer. Adding a new block to the Blockchain, means that it will be added to the global copy of the network that exists within all the nodes of the network as well.

What is Hyperledger?

A collaborative open-source project run by the Linux Foundation, Hyperledger provides a number of modular blockchain frameworks and building blocks for creating interoperable, secure, and scalable blockchain applications. It contains frameworks that each cater to certain use cases and needs, such as Hyperledger Fabric, Sawtooth, Besu, and Iroha.

Organisations can build strong, permissioned blockchain networks that support smart contracts, granular access control, and secrecy thanks to Hyperledger’s focus on enterprise-grade solutions. Hyperledger enables developers and organisations to investigate cutting-edge blockchain technologies with an emphasis on performance, privacy, and cross-industry compatibility by encouraging standardisation and collaboration across industries.

Differences Between Ethereum And Hyperledger

Below are the key differences between Ethereum and Hyperledger:

1. Purpose:

• Ethereum Platform is designed to build decentralised applications directly for consumers for mass consumption. It is created for the purpose of running smart contracts on the Ethereum Virtual Machine(EVM).
• Hyperledger is designed to create Business to business enterprises and cross-industry applications. It helps the industries to collaborate with developers, working on Distributed Ledger Technology(DLT). Customised blockchain apps with limited access can also be created with this.

2. Security:

• Ethereum is a public network. Hence, all its transactions are entirely transparent and can be viewed by anyone.
• Hyperledger is a permissioned blockchain network which is highly secured and confidential. Only the organisations or individuals with the required authority can view all the transactions on the network.

3. Governance:

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

4. Participation:

• Ethereum is a permissionless and public network allowing anyone with access to the internet to download the software and start mining Ethereum.
• Hyperledger maintains strict control over the participants of this network. Only authorised members and the peers selected by them can use the platform and its tools. This envelopes valuable and confidential information from external parties and prevents them from manipulating it.

5. Smart Contracts:

• Ethereum came up with smart contracts first. A Smart Contract is immutable, once the conditions are set, it cannot be changed by any third party.
• Like the smart contracts, Hyperledger fabric also allows the member organisations to run some code on peers that create the transactions on a specific condition. These are known as chaincode.

6. Programming Language:

• For writing smart contracts, Ethereum uses solidity. But for developing the application some high-level languages like Javascript, python, Golang, etc are used.
• In Hyperledger, the language Go is widely used to write the chaincode along with some Java and JavaScript.

7. Consensus Mechanism:

• Ethereum operates on the Proof-Of-Work (POW) consensus mechanism. This means that the participant nodes come to a consensus to prevent fake transactions and double-spending of coins.
• As Hyperledger is a private and permissioned network, it does not need any consensus mechanism to validate a transaction. If two participating parties agree on a specific transaction then no third party can view or intervene. This improves the scalability, performance and transaction rates.

8. Speed of Transactions:

• The POW mechanism of Ethereum reduces its transaction speed. Which is close to 20 transactions per second.
• Since hyperledger doesn’t need a consensus mechanism, it has relatively faster transaction speed. That is around 2000 transactions per second.

9. Cryptocurrency/ Currency:

• Ethereum has its own native cryptocurrency called ETHEREUM(ETH). Any participating node can mine ETH by paying gas. Accept tokens via smart contracts.
• Hyperledger does not have its native cryptocurrency and it is not involved in mining. Accepts tokens and currency via chain code.

10. Operation Mode

• Ethereum is a public blockchain, which means anyone can access the Blockchain network, and no permission is needed to access the network.
• Hyperledger, on the contrary, operates as a private Blockchain, meaning only the authorised participants can access the network. Basically, the network is limited to a predefined community of participants with permission.

11. Peer Role

• In Ethereum, each peer has a role, hence if a transaction occurs, several nodes have to participate in it for its execution. This however, leads to several issues like scalability, privacy, and efficiency.
• On the contrary, Hyperledger offers a distributed ledger technology(DLT) which doesn’t rely on informing each peer in the network about a transaction.

12. Confidentiality Level

• While discussing Ethereum, a public network, one should note that all the transactions are recorded on the Blockchain network. Also, these records are visible and accessible by every peer.
• Since Hyperledger is private and permissioned, any transaction taking place on such a network is only visible to the authorised members.

When to use what?

Now let us discuss the use cases of either of these blockchains:

1. Ethereum:

• Public applications: Building a dApp solely for customers, a developer should preferably opt for Ethereum smart contracts. Ethereum allows anyone to join the network and create a node.
• Open-source applications: Since such applications do not demand any sort of confidentiality. And are developed and hosted by blockchain developer communities around the world. They can be developed using Ethereum.

2. Hyperledger:

• Private Applications: No business desires to maintain their confidential data on a public blockchain like Ethereum. As a permissioned blockchain network, Hyperledger offers a solution to this problem by offering to create a blockchain application. It also maintains the privacy of the information of the organisation.
• Create customised blockchain algorithms: Hyperledger can be very useful when an organisation demands to define its own and unique blockchain algorithms. In Hyperledger projects, the underlying infrastructure of the blockchain is modifiable. This flexibility stands out to be a great tool while making customised blockchain applications for business purposes.

Conclusion

In this article, we briefly reviewed what Ethereum and Hyperledger means and how these two forms of blockchains differ from each other. After discussing Hyperledger vs Ethereum, we also shed some light on what are the real world applications for either of them and conclude that these unique technologies have their own benefits and each is very useful for a particular set of clients.