Ethereum vs Hyperledger Blockchain: Which Suits Best for Your Business


First, it was the evolution of blockchain which startled the world with some unique options. With the development of blockchain, multiple platforms within blockchain evolved as well. As of now two of the most important frameworks that are mostly preferred are, Ethereum and Hyperledger. 

This article will make an attempt to draw the difference between Ethereum and Hyperledger. As a blockchain user or a developer, once you know the difference between Ethereum and Hyperledger, you can make a well-informed decision while selecting the blockchain platform for your organization.

This debate of Ethereum vs Hyperledger has been quite hot amongst the blockchain community, with its own set of pros and cons. Even though we talk about Hyperledger fabric and Ethereum differences, both these platforms are open source, and are quite popular for real world blockchain applications. Before we go ahead and find out the difference between Ethereum and Hyperledger, it will be best to check little bit about these platforms first. 

What is Ethereum? 

Ethereum is an open-source platform. It is a public blockchain network. The inspiration behind developing Ethereum was bitcoin. The idea was to develop a blockchain network, which would be more than just a mere cryptocurrency. Ethereum is best known for development of distributed Apps, with the help of smart contracts. Ethereum has become a hub of development of decentralized apps with its decentralized platform. Its primarily used by the B2C customers.

Being a public network, Ethereum allows anyone to join its network. User can transact by simply connecting to the network. When it comes to implementation of mining, it closely follows Bitcoin by implementing Proof-Of-Work (PoW) consensus mechanism. What this would mean that all the nodes on the network should have a consensus on the transactions, even though they are part of it. This is because they have agreed to a common ledger state. On the other hand, Ethereum uses Solidity for developing smart contracts. Solidity is a high-level language used for developing contracts. On Ethereum, Ether is used as currency, which is its built-in currency. 

What is Hyperledger?

Hyperledger is a kind of consortium or a collaborative project, which is purely built on Linux foundation. Unlike Ethereum, some on the mainstream technology companies such as IBM and Intel are working on the development of Hyperledger as a platform. As a professional blockchain developers you might have certain questions in mind. 

When should I opt for Hyperledger? If both are based on blockchain, what is the difference between Ethereum and Hyperledger? A simple answer to these questions will be, Hyperledger doesn’t uses the Ethereum based protocols like other blockchain platforms do. Instead, it has its own architecture and protocols, which is based on distributed ledger technology. Both, Ethereum and Hyperledger might end up in servicing specific industry segment, based on the business requirements.

Hence, this is the reason before you adopt a particular platform for your business, you must know difference between Ethereum and Hyperledger. Even the use cases might differ for both of these platforms. A Hyperledger blockchain development company will prefer Hyperledger over Ethereum, when it comes to development of DeFI apps. 

The sole mechanism of Hyperledger is to make use of distributed ledger technologies for business applications. Its best suited complex B2B solutions, unlike Ethereum which is suitable for B2C solutions. Hyperledger allows modular implementation, which means separated module can be created and implement, just like we have in an object-oriented program.

It also facilitates flexible implementation. Hyperledger by default is created for permissioned and private network, which means without permission one cannot access a resource on the blockchain network. Another key security feature is, resources cannot be accessed by any outsider who is not part of that blockchain network. This is the reason, why Hyperledger is a preferred platform when it comes to financial solutions.

Even nodes which are part of the blockchain network are pre-defined, and access is almost restricted. So, what happens if a new peer wants to join the network? The peer needs to get the required permission for accessing the network. If the permission is not granted, then the peer will be restricted from joining the network. This again shows, that compared to Ethereum, Hyperledger has a well-defined security framework. One of benefit of being this inclusive mode is, it makes the consensus process much simple and easier compared to a blockchain network that is public. 

Since, it’s a private network, lesser computational power is required compared to Ethereum, when it comes to reaching consensus. The nodes have the option of choosing two different protocols for consensus, no-op (where no consensus needed) and agreement protocol (PBFT). Hyperledger uses chaincode for creating smart contracts, which is another major difference with Ethereum. Now the best part is, with chaincode, a developer can develop his own tokens or cryptocurrency, that will be best for his business applications. 

Final Words 

We have discussed about the difference between Ethereum and Hyperledger to an extent, by understanding its key features and major differences. To summarize we can say that Ethereum was one of the early starters which is still clearly based on the conventional blockchain framework, while Hyperledger is more an evolution based on the latest business requirements.

There is no doubt both these platforms are unique with their own set of characteristics. So, if an organization is looking for business solutions that be based on public network, with a wider accessibility then Ethereum will be a top choice. While if you have a business requirement, where the apps need to be on private network with limited accessibility then Hyperledger will be the best one.

As mentioned earlier, the later seems to be more suitable for finance solutions. Hyperledger is more tuned for the business transactions, which makes it perfect for B2B solutions, while Ethereum uses EVM to execute the smart contracts that is meant for mass utilization, which makes it suitable for B2C solutions.

To conclude, it can be said, if your business needs conventional blockchain solution meant for a larger audience, with open access then Ethereum will be the best choice. If your business needs a customizable and modulars solution, with restricted access then Hyperledger will be the optimum choice.

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