What Is an Enterprise Blockchain?

Blockchain has gained much prominence and renown because of its applications in cryptocurrency, tokens, and NFTs. However, limiting blockchains' utility to these use cases would be like limiting the internet to only social media. Many companies, regardless of size, are looking toward blockchain technology as the potential solution to different problems and inefficiencies. In fact, of Fortune 100 companies, nearly 80 have implemented, are implementing, or are researching the application of blockchain technology within the company. This enterprise use case has the potential to be even more consequential than cultural applications like cryptocurrencies, tokens, and NFTs.

Varieties of Enterprise Blockchains

There are essentially two different types of enterprise blockchains: Private and consortium. Private blockchains are created, maintained, and governed by one organization and can generally only be accessed by those working within that organization. The responsibility for maintaining this blockchain with servers, code, and more rests on the institution that created the private blockchain. 

On the other hand, consortium blockchains are managed by a handful of different institutions. They share the responsibility among themselves for maintaining the blockchain servers in addition to the rules that govern the blockchain.

Both of these organizational structures share some consistencies among themselves. For example, enterprise blockchains are permissioned networks as opposed to public networks like the Bitcoin network. This privacy means that only people who have received permission from the governing institution(s) can access the blockchain network. Enterprise networks are also mutable, meaning that the governing members of the blockchain can modify transactions and records. 

Advantages and Pitfalls of Implementing Blockchains at Enterprise Scales

The main advantage of implementing blockchain technology on an enterprise level is greater efficiency. However, most of these advantages only exist in the imagination because they are not live systems yet. Still, potential applications in insurance, real estate, government, and more show great promise in improving efficiency.

The potential downsides of the technology are twofold. First, implementing blockchain technology will require feasibility tests, research and development, code development, and beta testing. This requires large amounts of investment before the servers and computational infrastructure are even considered. These sorts of hardware purchases could be prohibitively expensive for many companies who decide to go it alone. 

Because of this expense and level of difficulty, many companies are partnering with other companies that are ad hoc blockchain companies. This allows blockchain-adopting companies to mitigate the investment required while allowing blockchain-creating companies to source their funding from a number of different sources as clients.

Three Innovative Examples of Enterprise Blockchain Solutions

1. Poste Italiane

Poste Italiane is Italy’s national postal service; however, it is also far more than that. The platform offers parcel delivery and serves as a central eCommerce hub for other products such as insurance, banking, and payments. As such, it is truly at the heart of Italian commerce.

Poste Italiane built a blockchain rewards program on the back of this stunning infrastructure to track, store, and exchange loyalty points. The application tracks points across preferred vendors who use Poste Italiane. Each of these vendors is responsible for maintaining one’s own node or paying for maintenance services. 

On the other end, consumers receive access to a mobile application reminiscent of a cryptocurrency wallet. Here on the mobile interface, customers can keep track of their rewards points and exchange them with different purchases. As a result, the customers get better deals, the businesses obtain more exposure, and Poste Italiane ensures loyalty among affiliated companies for logistics needs.

2. Sony and AWS

Sony is one of the electronics industry's biggest names, especially regarding audio media. Sony has stayed within its lane of producing high-quality hardware like headphones, speakers, and other similar hardware. However, this unique position in the market has led Sony to take an asymmetrical approach to verifying copyrights. 

Traditionally, many institutions and individuals are involved in creating, licensing, and distributing musical intellectual property. The composer creates, the music company distributes, the copyright authority monitors the distribution, the retail service sells the music, and the listener consumes it. These different steps interact with each other in digital and analog formats where information loss and corruption are possible. 

Sony, in cooperation with AWS, placed a blockchain network at the center of all of these relationships. This solution allowed each stakeholder access to the network to view and verify immutable and distributed transactions. This decentralization significantly reduces the verification steps while the immutable nature of the blockchain provides a single source of truth for all stakeholders.

3. Mastercard

Mastercard sits at an ideal junction of utility for the burgeoning age of blockchain technology. Being both a massive company and an institution that works in the financial sector, Mastercard has the financial acumen and brawn to develop finance blockchain technology.

The credit card giant has set its sights on central banks and their new interest in central bank digital currencies (CBDCs) — digital currencies that will eventually replace fiat. Mastercard developed a new platform that allows central banks to create virtual simulacra of CBDC rollout. The program functions enable central banks to visualize how the distribution and exchange of CBDCs between institutions and individuals would potentially work. This visualization would give central banks a better understanding of modeling; new use cases; and CBDC issuance at national, state, and local levels. https://www.web3.wharton.upenn.edu/blog

Mastercard chose a niche market, but many different governments are currently evaluating the feasibility of CBDCs. Other blockchain technologies, such as decentralized governance, are growing out of public and private cooperation. Further, blockchain modeling software will play a significant role in the institutional adoption of blockchain technologies.

Conclusion

Enterprise blockchain solutions come in every shape and size. The deeper our understanding of the technology gets, the more difficult it is to imagine a piece of the world that will go untouched by blockchain technology. Wharton developed the Economics of Blockchain and Digital Assets program to equip the upcoming group of leaders in blockchain technology. The blockchain certification course features more than 80 videos, 7 industry-leading case studies, 3 crypto valuation models, and more. For more information on the course or to enroll, visit our information page.