Data Privacy and Security with Hyperledger Fabric Blockchain

Published : Jan 06, 2021

blockchain privacy Hyperledger (3)

  • Enterprises often require a defined degree of data and transaction protection, privacy, enforcement, and efficiency to be guaranteed. Achieving so is quite complicated and time-consuming. With data incompatibility or lack of confidence, problems often arise in business. In such cases, how can Hyperledger blockchain development help to ensure privacy and confidentiality of data and transaction exchange across a business network?

    A distributed, decentralized public ledger is now known by blockchain technology. It can be represented as a constantly increasing list of transactions stored on devices on the network called nodes to image it. The nodes are linked by cryptographic protocols and keep transactions confidential.

    All the information on this network is available to users and they are each responsible for their actions. Data is permanent and is not governed by a single central authority. But what, where a business wants to ensure the privacy and confidentiality of transactions and data exchange with others, use private blockchain like Hyperledger Fabric.

    Permissioned Blockchain Development

    The feature that distinguishes private blockchains is that network participants can restrict access or permission. One has to get permission from network managers to join the network. The limitation of network access guarantees confidential transactions. Only individual parties involved in a transaction can recognize it. It is enough to restrict reading permissions and provide a high degree of data protection to achieve a higher level of privacy.

    Private Blockchain Platforms for Privacy and Confidentiality

    Permissioned or private blockchains are either open source, consortium, or built privately. A private blockchain comes in many options for the privacy of transactions and data exchange use cases, but the most common ones are the Hyperledger Fabric of the Linux Foundation and the Corda of R3.

    Also, Read | Technical Benefits of Hyperledger Fabric for Enterprise Application development

    Introducing Hyperledger Fabric Blockchain for Privacy Protection

    The scalability of Hyperledger Fabric relies on several variables. Design of software infrastructure and performance of complexity effects. Compared to public blockchains, the Hyperledger Foundation claims that its private blockchain is more scalable and enables more transactions every second. A 2019 report also predicts that achieving 20,000 transactions per second is possible.

    One big tradeoff with higher transaction processing rates is that there is further centralization of private blockchains. Hyperledger Fabric uses Raft consensus instead of public proof-of-work consensus, also used by Bitcoin and Ethereum.

    You need an odd number of nodes to achieve consensus in Hyperledger Fabric and there must be a clear majority of those operating to validate transactions. For instance, if a network includes seven nodes, four will need to function to verify new transactions. Having only a small number of nodes, however, also comes with risk.

    Permitting network stars gives them a great deal of control, so make sure they're someone you trust. The raft will use more nodes, and it will continue to operate. It is less secure because it does not defend against 'bad actors,' that is, these 'bad nodes,' so believing that such bad users will not obtain access is rather necessary for corporate blockchains. However, rafting is much easier, much more scalable.

    Also, Read | The Potential of Hyperledger Fabric for Enterprise Solutions and Its Use Cases

    Hyperledger Fabric Blockchain

    Hyperledger is an open-source, distributed blockchain project—
    Suitable chain technology for the enterprise. Hyperledger Fabric is an implementation of the blockchain architecture and one of the Hyperledger projects hosted by The Linux Foundation. It uses container technologies to provide modular architecture and pluggable, interchangeable facilities. There are several other characteristics of Hyperledger Fabric as well:

    • Provides support for a range of usage cases in the market with distinct specifications
    • Complies with present-day laws and rules
    • Ensures private and sensitive confirmed identity and transactions
    • Enables support for authorized and private ledgers
    • Facilitate auditability, identification, security, efficiency, scaling, and privacy intelligence
    • Reduces the cost of computing by endorsement policies and
      The protocols of modular consensus

    Modular and Scalable 

    With a modular and scalable architecture, pluggable applications, and container technologies, Hyperledger Fabric offers a platform for designing blockchain solutions for enterprise use cases. It also provides transaction confidentiality, security, and finality for enterprise environments. In addition to employing beneficial open-source practices, it fulfills four essentials blockchain aspects for business. 

    Private/Permissioned Network: Permissioned membership collectively gets established access and usage rights in the business network.

    Private Transactions: Offers versatility for security for corporations to make transactions available to identified, permissioned parties with encryption keys.

    No Cryptocurrencies: This does not involve the extraction of expensive and costly calculations to ensure mining and transfers of cryptocurrencies

    Modular Approach: Leverages precisely embedded smart contracts logics to simplify company operations across the enterprise.

    Use Case | Privacy Protection with Hyperledger Fabric Blockchain

    Let's take a look at a recent Hyperledger Fabric-based project, demonstrating transaction privacy and confidentiality preservation, for reference. 

    Traditionally, until the final execution, reaching and confirming a decision or a document implies that both parties must consult with each other manually for seeking consent to the modifications, as per a hypothetical high-level architecture. There is no single authentic data source to connect the networks of collaborators or branches in one entity for rapid reconciliation. There are inefficient means employed. They do not ensure authentic validation of transactions and store records in the database in real-time. Overall, it's costly and time consuming with current centralized frameworks. Not to mention, the security of centralized systems remain highly vulnerable to hacks and threats. 

    As explained, we may incorporate a backend framework with a database as a core solution. Although it strengthens the network mechanism, we still have mistrust and a lack of immutable data issues. Without the permission of the settlement parties, a bad actor can attempt modifications during data exchange. 

    Also, Read | Strengthening Privacy of Blockchain with ZK-Proof

    Using Private DLT with Smart Contracts

    The absence of trust in data and participants affects future transactions and fails to address issues. We may employ DLT (distributed ledger technology) as a private blockchain with smart contracts to address a lack of trust and drive decision-making. Each network member should get a transparent view of data but with confidentiality and authentication.

    Indeed, in this case, the most relevant solution is developing a private blockchain. Centered on one central database in which all saved modifications are available to users, we can address the challenges. 

    Deploying Hyperledger as a private blockchain network provides a shared, decentralized, yet trustworthy database with immutable data. Further, smart contracts reduce decision-making time by enabling automation across current manual or semi-automation processes. As a result, it lowers costs and drives efficiency.

    At Oodles, our blockchain developers provide Hyperledger blockchain development keeping technical and business perspectives in mind. Along the journey, we learn how our client's business functions, what challenges we address, and how we can efficiently merge technology and business to simplify operations and offer consumers meaningful benefits.

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