In the past two years, we have seen a major shift in attitudes towards the adoption of blockchain technology by traditional companies.
In 2018, the phrase “blockchain, not bitcoin” was a common slogan peddled by cautious company executives upon their first exposure to our fledgling industry.
Over time, the establishment of new regulatory frameworks around cryptocurrencies, coupled with the mainstream adoption of digital assets in the form of CBDCs and NFTs have reduced the hesitancy for companies to embrace blockchains in their entirety.
Today, the question on most companies’ minds is not whether blockchain technology has value, but instead how to leverage this technology (including public ledgers, smart contracts, and tokens) to improve their business.
According to a research report from Ernst & Young, the primary goals of companies adopting blockchain technology are to
- reduce costs
- increase transparency and operational efficiencies
- preserve data integrity
- discover new business models
The Cambridge Center for Alternative Finance recently published a report showing that the most common enterprise blockchain use cases are in Supply chain tracking, trading, digital certification, trade finance, and payments. Most businesses in these industries produce large transaction volumes and require a greater secure and reliable system that can quickly process transactions.
It is with this understanding that Horizen has developed Blaze, an SDK that enables the deployment of ultra-fast and highly scalable permissioned blockchain networks with massive throughput that can solve real-world challenges and create opportunities in industries such as supply chain management, healthcare, gaming, and financial services.
More about Blaze
Blaze is a zero-knowledge enabled SDK for building high speed blockchain systems with massive throughput and security. It is Horizen’s answer to the question of how traditional companies can leverage blockchain technology to improve their business.
Blockchains come in many different forms depending on the needs of the users who inhabit the network. The requirements of people who wish to engage in peer-to-peer transactions with other anonymous/pseudonymous individuals may not be the same as those of companies that wish to reduce costs and increase operational efficiencies by establishing a shared ledger between trusted industry partners and stakeholders.
As a zero-knowledge enabled network of blockchains, Horizen provides best-in-class tool kits that enable developers to build highly customizable blockchains according to their needs. This includes dictating how fast the system needs to be and how much decentralization is ideal for their use case.
Developers can launch a blockchain that is designed specifically to achieve higher transaction throughput by requiring only a select number of trusted entities (or validators) to confirm transactions. These validators must stake ZEN inside the sidechain in order to forge blocks, sign transactions, and operate within the network.
Having fewer validators on a sidechain enables Blaze to achieve up to 1,000 transactions per second.
Each trusted entity has a public key that is used to sign certificates in the sidechain that will periodically be sent to the mainchain for verification using zk-SNARKs. This means that the mainchain will be able to verify the state of Blaze sidechains without knowing the details of the transactions that occur within them.
Based on this unique implementation, we can envision a number of novel use cases and improvements to popular permissioned networks like Hyperledger, R3 Corda, or ConsenSysQuorum.
Use Case Example 1: Privacy Enabled Shipping Networks
Shipping companies could set up a Blaze sidechain to reduce the costs of verification, fast-track approvals, share trading routes and increase the transparency of goods transported between ports. Currently, IBM’s & Maersk TradeLens is the most popular example of a private permissioned network for shipping carriers.
What differentiates TradeLens from a Blaze Sidechain is that Blaze could be made to communicate with a public ledger such as the Horizen mainchain or some other public permissionless sidechain.
Using zk-SNARKs, audits could be performed by government agencies or accounting firms, and status updates about cargo shipments could be made available to the public, all while keeping sensitive IP and shipping data private.
Horizen has recently partnered with Morpheus.Network, a blockchain-powered supply chain SaaS middleware platform that integrates legacy technologies with emerging technologies.
Morpheus can leverage our Blaze Sidechain to lower operating costs and record each step in the supply chain process on a private, permissioned blockchain that is capable of communicating with public networks while retaining privacy using zk-SNARKs.
Use case 2: Gaming & NFTs
High transaction throughput is essential for developers to create the same high quality gaming experiences on a blockchain that players are used to enjoying on other centralized gaming platforms.
When it comes to blockchain games, the primary purpose of decentralization is to maintain a transparent and secure database for the trading of in-game NFT assets.
The level of decentralization required for this use case is not as great as what one would need to secure a store of value assets like Bitcoin or a national digital identity system, especially not when speed is also a crucial factor in the performance of the application.
Therefore, our Blaze sidechain offers the ideal solution for a blockchain gaming service to adopt. Horizen recently partnered with Gamestation, a decentralized multi-chain gaming launchpad, to help scale their products from simple gaming platforms to expansive metaverse gaming economies like Axie Infinity and The Sandbox with selective privacy capabilities.
We can envision Gamestation adopting thousands of parallel Blaze sidechains that are all interoperable with each other in order to build the most scalable blockchain gaming network in the industry today. This network would be capable of achieving up to 10 million transactions per second across 10,000 interoperable sidechains (an average TPS of 1,000 per chain).
Use Case 3: Institutional Defi: Instant settlement between banks, preserving privacy of on-chain trades
The Banking sector has long been marred by high transaction fees and slow processing times due to the number of intermediaries required for money to move between counterparties. Blaze sidechains would enable banks to establish a shared ledger for processing payments that could settle instantly and for a fraction of the costs when compared to traditional payment rails like Fedwire or ACH.
Through zk-SNARKs, bank transactions and account balances could be kept private while verifying their authenticity through the public mainchain or on a different sidechain. This would also allow on-chain trades executed by crypto hedge-funds or other financial institutions to be confirmed privately to avoid front-running.
Use Case 4: Efficient data sharing between healthcare industry stakeholders
We envision a Blaze sidechain implementation that consists of members from various hospitals exchanging patient data on a shared ledger, filing insurance claims based on verifiable medical reports, and processing payments for drug prescriptions.
Additionally, hospitals, pharmaceutical companies, and insurance providers could leverage zk-SNARKs to make data for clinical trials, vaccine developments and insurance claims to be verified by the public without revealing any personal information.
How to decide if Blaze is right for your business?
The main questions you want to answer when evaluating whether to develop a Blaze sidechain solution include the following:
- What are the key business problems you are trying to solve and do they require a blockchain?
When evaluating the list of challenges facing your business, you should use the following criteria to determine if any of your challenges could be solved with a blockchain solution:
- The business process that I am currently experiencing challenges with is one that is repeatable and can be automated (i.e., payments, loans, verifying information)
- The solution will be applied more than once and is part of an ongoing process.
- There are multiple stakeholders involved in the business process and it is costly or difficult to verify that each stakeholder is acting honestly
- There are multiple parties involved in reconciling data that is created through the business process, which creates risks in terms of data not being reported correctly due to fraud or negligence.
- Something of value is being transferred between stakeholders (i.e., money. Information, assets, etc.)
- There needs to be a permanent and tamper-proof record of transaction data between stakeholders
If several of these criteria apply to your business challenge, then it may make sense for you to consider adopting a blockchain.
- As a next step, do you want to understand who your industry stakeholders are and if your business challenges align with theirs?
For enterprises developing a blockchain, the more alignment there is between your business needs and those of other stakeholders in your industry, the easier it will be to convince them to join your Blaze sidechain to form a business consortium.
These stakeholders could include vendors, suppliers, customers, or even competitors. The benefits of operating a shared ledger between these stakeholders can include reduced costs, greater efficiency in transaction processing, and the ability to create new revenue models based on the needs for other stakeholders not included in your immediate group to access data from the network.
- How much decentralization is enough?
As we indicated earlier, decentralization is a gauge that can be adjusted based on the needs of the developer in crafting their blockchain solution.
When evaluating how much decentralization is enough for your blockchain, developers often refer to the blockchain scalability trilemma, which is a series of trade-offs between decentralization, speed/scalability, and security that one must make when designing a blockchain and constructing rules for its on-chain governance.
Common decentralized applications that require high transaction speed with adequate security include payments, trading, gaming, social networking, and NFT marketplaces.
Common decentralized applications that require high security with adequate speed include digital identities, healthcare data management systems, and public land registries.
Where does your blockchain use case sit on this spectrum?
With Blaze, developers can launch dapps that are well suited for trading, gaming and social networking, but can also be made interoperable with our more decentralized and secure version of a sidechain called Latus.
Using Latus as a supporting public sidechain, data from the Blaze sidechain could be stored in a more secure environment while retaining privacy through the use of zk-SNARks.
Our Cross-chain Transfer Protocol would allow tokens and data to be transferred between Blaze and Latus sidechains seamlessly, enabling developers to simultaneously toggle between high security and high speed without compromising overall network decentralization.
- Should I use a private or public blockchain?
This question can be answered by going through the following decision tree:
One of the benefits of adopting a Blaze sidechain is that it can also function as a hybrid blockchain. This is because it can be made to communicate with a Latus public sidechain or with the Horizen mainchain. You can make data privacy a critical component of your network while also making your blockchain verifiable to the public.
In conclusion, Horizen’s Blaze sidechain enables enterprises and traditional companies to explore real-world use cases for blockchain technology through a faster and more scalable version of our standard Latus sidechain solution that also includes superior privacy technologies through our implementation of zk-SNARKs.
With Blaze, the key elements of a blockchain, including privacy, scalability and transparency are all at your disposal.
This means you can build all kinds of novel solutions, including a permissioned yet publicly verifiable supply chain network, a decentralized exchange for executing on-chain trading orders without the risk of front-running, or a gaming platform for securely trading in-gaming assets while offering a fast gaming experience similar to standard mobile games.
Additionally, developers could effectively bolster the security and decentralization of their network by having transaction data stored/confirmed on other more secure networks such as our Latus Sidechains or the Horizen mainchain. This allows Blaze sidechains to prioritize transaction throughput without incurring security risks.
To learn more about the exciting possibilities that can be achieved through our new Blaze sidechain implementation, visit our website and blog at https://www.horizen.io