Hyperledger vs Ethereum: Difference Between Hyperledger and Ethereum [Which One Should You Use]

In the Blockchain world, both Hyperledger and Ethereum have created ripples of innovation. These two popular open-source Blockchain platforms have not only found numerous blockchain applications in the industry today, but they are also encouraging Blockchain Developers around the world to engage in the collaborative development of these Blockchain-based frameworks and blockchain tools. While both the Blockchain platforms continue to advance, when it comes to their use case, emerging Blockchain Developers are often faced with a confusing question:

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Which Blockchain platform to use – Hyperledger or Ethereum?

Since there is no straightforward or right answer to this question, we’ll confront the Ethereum vs. Hyperledger debate by discussing in length about their features to understand their differences and unique advantages.

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What is Ethereum?

Ethereum is a public, distributed, and decentralized computing platform that was primarily designed for executing smart contracts. Since it is a decentralized platform, each participant(node) in the network has access to the same copy of the Blockchain network. Whenever a new block is added to the Ethereuem Blockchain, it will be added to the universal copy that exists with all individual nodes in the network.

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Ethereum runs on a virtual network called the Ethereum Virtual Machine (EVM). In Ethereum, each node has to pay “Gas” as the cost of each transaction they carry out on the network. This Gas is paid in Ether, Ethereum’s native utility token (cryptocurrency). 

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What is Hyperledger?

Hyperledger is an open-source Blockchain project developed and hosted by the Linux Foundation. However, it is a global collaboration among leading companies across finance, banking, IoT, technology, and manufacturing industries. It is a permissioned Blockchain framework designed for developing customizable Blockchain applications to cater to specific business needs.

Since Hyperledger was developed keeping in mind the needs of organizations, it has a modular architecture and functions as a plug-and-play framework that allows enterprises to customize Blockchain applications according to their unique needs.

Hyperledger comprises a host of tools and projects that promise to deliver high scalability, confidentiality, and resilience.

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Ethereum vs. Hyperledger: Differences in their core features

Purpose

Both Ethereum and Hyperledger were designed and developed with a unique purpose. Ethereum was developed with the sole purpose of running smart contracts on EVM for the mass consumption of decentralized applications (DApps). 

Hyperledger, however, was designed to facilitate the creation of cross-industry Blockchain tools and applications. Its primary purpose is to encourage seamless collaboration between businesses and developers working with Distributed Ledger Technology (DLT). It is highly flexible in the sense that you can customize your Blockchain apps and also choose the parties that can see and access the transactions.

Mode of accessibility

As mentioned before, Ethereum is a permission-free, public Blockchain platform. So, anyone can download the Ethereum framework, participate in Ether mining, and also see and access the transactions occurring on it. 

Unlike Ethereum, Hyperledger maintains strict control over accessibility. Only authorized members can access and use the Hyperledger platform and tools. Each participant must obtain permission to join the Hyperledger network. This prevents external parties from accessing valuable information and making alterations to the network.

Confidentiality

Since Ethereum is a public network, it doesn’t work on the concept of permissions. It is entirely transparent, which means that all the transactions recorded on the Blockchain network are both visible to and accessible by every peer. 

Contrary to Ethereum, Hyperledger is a permissioned Blockchain platform, which means that it is highly secured. All the transactions occurring on the network are only visible to the people who are authorized to access them. Thus, if you wish to access any specific resource on the Hyperledger network, you must obtain permission to access it.

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Programming language

Ethereum uses high-level programming languages like Ruby, Javascript, Python, Kotlin, C++, Go, and Typescript. However, to write smart contracts, Ethereum uses Solidity, which is a contract-oriented programming language. Also read: Top Programming languages to learn.

In Hyperledger, smart contracts or “chaincode” is mostly written in Java or Golang languages.

Consensus mechanism

In Ethereum, all the participant nodes must reach consensus over all the transactions, irrespective of whether or not an individual node participates in a particular transaction. It leverages the Proof of Work (PoW) consensus mechanism that mandates that all nodes must agree on a ledger to access the recorded entries in the network.

Hyperledger allows participating nodes to choose between a no-op (no consensus needed) and Practical Byzantine Fault Tolerance (PBFT). In the latter approach, two or more parties must reach a mutual agreement to influence the desired outcome. Naturally, no external third parties can intervene in this agreement.

Cryptocurrency

Ethereum has an inbuilt or native token called Ether. Participants can mine Ether by paying Gas.

Unlike Ethereum, Hyperledger has no cryptocurrency. It involves no mining of cryptocurrencies. This helps to fix the scalability issues of the network, thereby enabling it to handle high transaction rates that further automate business deals made across the network. 

Ethereum vs. Hyperledger: When to use which?

You can use Ethereum when:

• You wish to develop public, out-of-the-box applications. With Ethereum, anyone can create a node, and each node on the network will possess a copy of the Blockchain.
• You prefer a community-led by Blockchain Developers. Unlike Hyperledger, which is controlled by centralized companies, Ethereum is enhanced and improved by developers all around the world.
• You are comfortable working with third-party open-source tools/packages. Since Ethereum is an open-source platform, most of the tools used for developing Ethereum DApps rely on third-party, open-source projects.

You can use Hyperledger when:

• You wish to develop B2B applications. Hyperledger was explicitly designed to cater to B2B requirements and needs. It is a perfect tool for developing B2B projects since many businesses are unwilling to keep their private data on public Blockchain platforms.
• You wish to define your unique Blockchain infrastructure. In Hyperledger projects, you can define the underlying infrastructure of the Blockchain, right from consensus algorithms to which nodes can decrypt which block on the network. This high-level of flexibility allows businesses to customize their Blockchain apps according to their needs.
• You are comfortable using in-house tools supported by top companies. All Hyperledger tools are backed by the Linux Foundation, along with companies like IBM, SAP, etc.

Conclusion

To conclude, both Ethereum and Hyperledger come with their unique advantages that come in handy for different business scenarios and challenges. You can choose to work with these two tools based on the requirements of your Blockchain project.

There is a rise in careers in blockchain technology and blockchain has tremendously changed the very face of the technology industry forever. If you’re interested to become a blockchain developer and build smart contracts and chaincodes, checkout IIIT-B & upGrad’s Advanced certificate program in blockchain technology.