Hyperledger vs Ethereum: Top 5 Common Differences You Need to Know

Anisa Batabyal
| 06 May, 2020 | 2 min

Before going ahead into the differences between Hyperledger and Ethereum, let us understand what defines each other. The main thing you need to know is that while Ethereum is a cryptocurrency, Hyperledger is not a digital currency. (Hyperledger vs Ethereum 2019). Some people might consider Ethereum as one of the Hyperledger competitors.

What is Ethereum?

Ethereum (ETH) is the world’s second-largest cryptocurrency, which is an open-source, public blockchain network. Ethereum enables the decentralized applications (dApps) to be built on the blockchain with the help of “smart contract”. Ethereum was developed by Vitalik Buterin, who introduced the concept of smart contracts.

What is Hyperledger?

When you think of the need for personalized blockchain as per the different business needs, there’s where Hyperledger comes into the picture. Hyperledger is the open-source development project, hosted by the Linux Foundation. It's an umbrella strategy with many platforms for developing solutions for specific enterprises or businesses. Like IBM uses the Hyperledger technology in a project called Hyperledger Fabric.

Now, let us quickly move on to the key differences between Ethereum and Hyperledger:

#1 Purpose

Both of them were created with a different and unique purpose or intention. Ethereum has the sole purpose of running smart contracts on the Ethereum Virtual Machine (EVM) for the decentralized applications and mass consumption. The transactions are transparent to everyone in the network.

Hyperledger has been designed to leverage blockchain technology for businesses that will be delivering confidentiality, scalability, and resilience. The best part is that it provides a lot of flexibility in the way you want to use it. You can select parties whom you want to make the transaction visible. You can maintain the confidentiality of your transactions. This makes it a Permissioned system.

#2 Participation (Blockchain Model)

Ethereum is based completely on an open network where anybody can join while Hyperledger asks for the invitation for permission for you to join the network. The businesses who set up a private blockchain will set up a more streamlined and transparent process generally to have a proper insight into the company’s information or customer’s data.

#3 Programming Language

Ethereum is an open-source project utilizing programming languages like Ruby, Javascript, Python, Kotlin, C++, Go, and Typescript. The smart contract can be written in a contract-oriented programming language called Solidity

In the case of Hyperledger, smart contracts are called chaincode which handles the transaction logic set by any of the members of the group. Hyperledger is private in nature and is mostly written in Java or Golang language.

#4 Consensus Mechanism

In the case of Ethereum, the nodes or network participants have to reach consensus over all the transactions, irrespective of whether a node takes part in a particular transaction or not. Ethereum works on the Proof of Work (PoW) consensus mechanism. All of the nodes have to agree on a ledger, and they will have access to the recorded entries.

Hyperledger enables the nodes to choose between “No consensus needed” and Practical Byzantine Fault Tolerance (PBFT), where two or more parties come to a mutual agreement that influences the outcome. Hence no unwanted third parties can intervene by forcing a choice.

#5 Cryptocurrency

Ethereum (ETH) is a cryptocurrency built on its well-enabled blockchain technology, and its native token is Ether. Ethereum has a wide spectrum of use cases, especially in the case of smart contracts. It is like Android on the blockchain, where anyone can create their dApps and use it.

There is no cryptocurrency for Hyperledger blockchain. Hyperledger blockchain doesn’t work on cryptocurrencies, so there is no mining involved as well like Ethereum. It helps in fixing the scalability issues and can handle high transaction rates that further automate the business deals across a network. The network participants on the Hyperledger network encrypts the identity of each user, which can be decrypted at the time of running transactions, and there’s no privacy or confidentiality issue.

Frequently Asked Questions (FAQ)

  1. Is Hyperledger better than Ethereum?

Though Ethereum has massive community support, it is open for all and a great number of developers are working on it.

  1. Is Hyperledger a cryptocurrency?

No, Hyperledger is not a cryptocurrency, but Ether (ETH) is.

  1. Should I learn Hyperledger or Ethereum?

You should know about both of them as they have their unique purpose but since Ether has community support and it supports enormous use-cases, it will be better for anyone to learn Ethereum.

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