Enterprise Blockchain Series: What Is Hyperledger Fabric?

One of the great strengths of blockchains is that they are open to everyone: Anyone can build a decentralized app (DApp) and use its native tokens, and every transaction can be viewed by the public, with only the transactors’ identities hidden.

Which is great and all, but plenty of companies are leery of the openness of blockchains and putting confidential information on a network they can’t control, now matter how secure. That’s where enterprise blockchains enter the picture, which are only open to the invited.

Learn more: PYMNTS Crypto Basics Series: What’s a Permissioned Blockchain and How Does Centralized Decentralization Work?

So, what’s Hyperledger Fabric? It is one of the biggest enterprise blockchains, but it’s only one of the flavors in the Linux Foundation’s Hyperledger projects’ growing array of open-source, permissioned blockchain platforms.

Hyperledger itself isn’t so much a blockchain as it is a distributed ledger technology (DLT) framework, with a set of tools and code libraries that developers can use to build enterprise blockchains, which are essentially centralized blockchains. That means that people need permission to build DApps on it or transact on them.

While Hyperledger is backed by an array of very big corporate names — IBM, Accenture and BNY Mellon among them — Hyperledger Fabric is the blockchain platform developed primarily by IBM Blockchain.

One thing to realize is that Hyperledger Fabric is not a single public blockchain like Bitcoin or Ethereum. It is a type of blockchain, meaning anyone can set up a Hyperledger Fabric blockchain, generally for a single project.

Some of the highest-profile corporate blockchain projects are built off Fabric, including shipping giant Maersk’s TradeLens and IBM Food Trust, used by the likes of Walmart and Nestle to track food from farm to supermarket shelf. Northern Trust bank also used it for the first trade of a fractionalized blockchain-based bond back in 2020.

It has also been approved for China’s hugely important Blockchain Services Network — a public infrastructure that is backed by the government and open to all blockchain developers.

What is Fabric?

For one thing, it’s not technically a blockchain; it’s a distributed ledger. While DLT is the technology blockchain is built on, there are a number of differences: Notably, it does not use cryptocurrencies.

Then there’s the consensus mechanism. Bitcoin’s Proof-of-Work and newer blockchains’ Proof-of-Stake both need a lot of separate, independently run nodes — servers with full copies of the blockchain that help secure the blockchain, validate transactions and write blocks of them onto the blockchain.

See also: Ethereum’s Moment in Sun Overshadowed as Markets Drive Crypto Down

Fabric’s DLT does not. It requires all nodes to be run by known and approved parties who are able to transact, and those transactions are free — no native token. It is fairly fast, able to handle tens of thousands of transactions per second, and has very short confirmation and finality delays thanks in part to the small number of nodes in the validation and consensus process.

In addition, the data in those transactions does not have to be shared with everybody on the chain, despite them all being preapproved. So, for example, when Walmart tracks heads of lettuce, every supplier, shipper and wholesaler can add information to the chain, but they cannot see what competitors are doing, what prices they are receiving and the like. Separate “subnets” allow certain members of the network to communicate privately.

Fabric can run Ethereum-style smart contracts, and it has a plug-and-play architecture that allows developers to customize things like the consensus mechanism and what member services access. A type of smart contract called chaincodes manage the transaction validation and orders them on the new block, and not every node is required to participate in the consensus.

It can also accept smart contracts written in a number of general programming languages, as well as Solidity, the language of Ethereum.

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