Hyperledger is an open source collaborative effort designed to advance blockchain technology across industries. Hyperledger was founded by Linux Foundation in December 2015 with an aim of supporting collaborative development of blockchain-based distributed ledgers. On the other hand, Ethereum is an open source software platform that uses blockchain technology to enable developers build and utilize decentralized applications. Ethereum was proposed in 2013 by Vitalik Buterin and was funded by an online crowdsale in 2014. Ethereum went live in July 2015.
The most fundamental difference between the two lies on how they are designed and the targeted audience. Ethereum is designed to target applications that are distributed in nature. A look at Ethereum distributed applications (dapps) seem to explain on the same. All transactions are visible to everyone. You cannot restrict what is to be viewed and what is not to be viewed. As long as its accessible one can view it. With Hyperledger there is a lot of flexibility in terms of what you want to use and what you don’t. It is designed to target businesses that are in the process of streamlining their processes by influencing use of blockchain technology.
Public versus private
Looking at the mode of operation Ethereum is a public blockchain which can be accessed by all peers. It is for mass consumption and no permission is required to view it. On the other hand, Hyperledger is a private block chain that is permissioned. It has controlled and restricted access to transactions that ensures improved security and privacy.
Ethereum is completely functional with its own built in cryptocurrency called Ether. In today’s world, it is easier to find developers using Ethereum applications compared to Fabric developers. This can be an added advantage over Hyperledger in use cases that require cryptocurrency. Whereas Ethereum is an already mature and growing ecosystem, Hyperledger is pretty new on the block and still developing. Hyperledger has the capability of becoming the platform of choice for enterprise level applications more so those that don’t require cryptocurrency and the overhead of a public consensus based network. It has no built in cryptocurrency, thus can assure transactions without expensive computations and mining.
Ethereum is equipped with smart contracts that enable it to automatically function under indicated conditions. This feature provides the potential to create a custom private blockchain and specific data operations without exposing the details of the database. Smart contracts execute agreements between two parties automatically. On the other hand, Hyperledger is built on a new system called fabric. Fabric can help a qualified developer to create and run smart contracts called “chaincodes” that constitute the application logic of the system. Hyperledger fabric also allows components, such as consensus and membership services, to be plug-and-play.
In terms of consensus algorithm, Ethereum uses Proof of stake (PoS) in which miners use a pool of validators as method of verifying transactions. Unlike other cryptocurrencies such as Bitcoin whereby miners compete to solve complex mathematical problems, Ethereum uses validators who are people willing to stake their cryptocurrency in the blocks of transactions that they claim should be added to the public blockchain. A working scenario involves staking their crypto whenever someone is chosen to validate a block. PoS is more efficient and functional than proof of work (PoW).
With Hyperledger one can choose between No-op (no consensus needed) and PBFT (Practical Byzantine Fault Tolerance).Hyperledger, on the other hand, is Linux based and its objective is to support enterprise blockchains. Specifically, Hyperledger represents efforts that are used towards advancing cross-industry blockchain technology. This is meant to be arrived at by identifying and addressing key features for a cross-industry open standard for distributed ledger technologies (DLTs). The DLTs will be instrumental in revolutionizing how business transactions are conducted globally.
Ethereum and Hyperledger have attractive characteristics that make them desirable by developers and end users as well. In such a fast moving world, developers need to make a choice and despite the confusion between the two, one has to make a choice to get started.