The 2009 release of Bitcoin marked the genesis of what has now become widely known as blockchain. Its use of proof-of-work consensus was the first example of a way to immutably record transactions for digital assets across a public network in a manner that was secure, trustworthy, and accurate. Shortly thereafter, others began to realize that blockchain technology could be applicable to any process that required a trusted exchange of data. New advancements in blockchain at the time like smart contracts added to the excitement as applications could now be built on top of the blockchain. Large enterprises especially began to fantasize about the way blockchain could transform their business operations.
All of this sounds great until you consider the fundamental problem blockchain was designed to solve: trust. The security and immutability of a blockchain network is directly related to its number of participants. The corollary to this is that the value of a blockchain solution is derived from its degree of decentralization. Private, permissioned networks limit security to the amount of trust between the parties, making it easier for a single malicious actor to undermine the network. Moreover, if trust is assumed from the onset, blockchain is probably not the best tool for the solution. Blockchains are expensive to run and should only be used if there is a legitimate business need to establish trust before exchanging natively digital assets. For many enterprises looking to adopt blockchain, Hyperledger is not going to provide them with any greater benefit than implementing an encrypted, distributed database would. Enterprises looking to truly leverage the benefits of blockchain, while enjoying a developer friendly, price stable network, are better off using Factom.
Feature Comparison Between Hyperledger Fabric and Factom
As can be seen from the table, the main differences between the two protocols lie in their architecture. Hyperledger is multi-channel enabled by default, meaning that it can maintain multiple private blockchains simultaneously. Factom can do this as well. However, this is not a requirement when using Factom due to its ‘multi-chain’ functionality. Factom allows users to create multiple chains of data within the ledger itself, often alleviating the need to maintain multiple, separate chains for various parties and simplifying implementation. Factom also has public ledger capabilities whereas Hyperledger only allows for private, permissioned ledgers. Using Factom, enterprises can create hybridized network architectures that consist of their private network(s) of trusted organizations anchored to the public network. Doing so allows these organizations to exchange sensitive information using blockchain on a private network, but then anchor to the public layer to leverage the added immutability and data security. All that is recorded on the public ledger is a hash of the private network data, thus preserving the fidelity of the information. The last major distinction between the two is the projects’ use of cryptocurrency. The Hyperledger Project has stated that it never intends on having a cryptocurrency. Their stance is largely based on the belief that this will allow businesses to leverage blockchain without the need to assume the volatility and risk associated with a cryptocurrency. While Factom does have a currency associated with it, the Factoid, it utilizes a two token system to address these concerns. Instead of Factoids, enterprises use ‘entry credits’ to write data to the Factom blockchain. Entry credits have a fixed price of $0.001/kb of data written to Factom, providing the price stability enterprises need to consider a blockchain solution. These aspects of Factom combined with its ease of integration into any tech stack makes the protocol as flexible as the needs of an enterprise and provides an attractive alternative to Hyperledger for enterprises wishing to truly leverage the benefits of blockchain.