BLOCK BY BLOCK A Comparative Analysis of the Leading Distributed Ledgers Table of Contents EXECUTIVE SUMMARY 3 PRELIMINARY MATTERS 4 A NOTE ON METHODOLOGY 4 THE EVOLUTION OF DISTRIBUTED LEDGERS 5 SEC. 1 : TECHNICAL STRUCTURE & FEATURE SET 7 PUBLIC OR PRIVATE? 7 PERMISSIONED OR PERMISSIONLESS? 8 CONSENSUS MECHANISM 9 LANGUAGES SUPPORTED 10 TRANSACTION RATES 11 SMART CONTRACTS 12 ADDITIONAL FEATURES 13 SEC. 2 : BUSINESS CONSIDERATIONS 14 PROJECT GOVERNANCE 14 LICENSING 16 THIRD PARTY SUPPORT 16 DEVELOPER SUPPORT 17 PUBLISHER SUPPORT 18 BLOCKCHAIN AS A SERVICE (BAAS) PROVIDERS 19 PARTNERSHIPS 21 ASSOCIATED COSTS 22 PRICING 22 COST PER TRANSACTION 23 ENERGY CONSUMPTION 24 SEC. 3 : HEALTH INDICATORS 25 DEVELOPMENT ACTIVITY 25 MINDSHARE 27 PROJECT SITE POPULARITY 28 SEARCH ENGINE QUERY VOLUME 29 FINANCIAL STRENGTH INDICATORS 30 MARKET CAP 30 24 HOUR TRADING VOLUME 31 VENTURE CAPITAL AND INVESTORS 32 NODES ONLINE 33 WEISS CRYPTOCURRENCY RANKINGS 34 SIGNIFICANT DEPLOYMENTS 35 CONCLUSIONS 36 PUBLIC LEDGERS 37 PRIVATE LEDGERS 37 PROJECTS TO WATCH 40 APPENDIX A. PROJECT LINKS 42 MERCY CORPS 2 EXECUTIVE SUMMARY Purpose This report compares nine distributed ledger platforms on nearly 30 metrics What’s Included related to the capabilities and the health of each project. The analysis looks at a broad range of indicators -- both direct and indirect -- with the goal of Bitcoin synthesizing trends and patterns that define the market leaders. Corda Ethereum Audience Hyperledger Fabric Multichain This paper is intended for readers already familiar with distributed ledger NEO technologies and will prove most useful to those that are currently evaluating NXT platforms in order to make a decision where to build or deploy applications. Accordingly, the text often assumes some knowledge on the part of the reader Quorum and a level of technical sophistication that does not require explanation of all Hyperledger Sawtooth 1 terms used in this document. Methodology We compare each of the systems on a variety of criteria. The criteria are grouped into three categories: 1. Technical Structure & Feature Set 2. Business Considerations 3. Health Indicators For each category, we examine a variety of largely objective metrics in hopes of being able to draw some meaningful comparisons that will provide you with firm ground for making an assessment of suitability for purpose. 2 Principal Conclusions The final section of this paper discusses in detail the conclusions reached in this report. The most significant conclusions being: • Ethereum is the clear leader in the public blockchain space, with broad support and a large number of resources and developers. • Corda and Fabric lead in the private blockchain space, with Fabric benefitting from the backing of Hyperledger and IBM. • NXT is a project of some concern, whose future seems in doubt. • Quorum, after a strong start, has slowed and appears to be going through some changes that bear watching. 1 For a good primer on the technology, consider our previous publication on the subject “A Revolution in Trust,” see, https://www.mercycorps.org/research-resources/revolution-trust-distributed-ledger-technology-relief-development 2 NOTICE OF DISCLOSURE: Note that the author holds several of the currencies discussed in this paper, including: Bitcoin, Ethereum, NXT, Cardano, Neo, Ripple, Stellar, and Stratis. MERCY CORPS 3 PRELIMINARY MATTERS The selection process for this paper began with an examination of 17 distributed ledger platforms3. During the course of data collection, the list was narrowed to a final set of nine. Systems were removed from consideration typically for one of two reasons: either they were not yet in a production release4, or they were focused on a very narrow use case5. Nine systems may seem like a small number. The simple fact is, that while there is an increasing array of choices for distributed ledger platforms, the number of options for building an robust (dare we say “enterprise”?) distributed ledger are actually quite limited at this time; we’ve tried to identify and compare those contenders in this document. Note that the focus here is on providing information about the systems that decision-makers are most likely to be looking at when they decide where to build or deploy their apps. The selection set is not intended to identify the best, or even the most interesting, new platforms, rather, our selection set includes the names we think are most likely to come up in any discussion of “where to build.”6 This paper was produced by Mercy Corps’ Technology for Development team7 which cultivates the innovative application of leading edge Security & Privacy technology to make global humanitarian and development work more While the security and privacy effective and efficient. This analysis seeks to enable users to harness the aspects of these systems is power of distributed ledger technologies for social good. undoubtedly of concern to anyone selecting a platform, A Note on Methodology this report has not attempted to rate or review systems on As a final note before we get started: Please keep in mind that, from a these factors. While we would research perspective, several of the products in our sample group present have liked to provide unique challenges. Bitcoin, Ethereum, Neo, NXT, and Quorum, in guidance on the topics, there particular, are problematic. is no consistent objective data set available at this time that In the case of Bitcoin, Ethereum, Neo, and NXT, the difficulty occurs due allows us to compare the to the existence of digital currencies of the same names. As the digital coin systems with confidence -- product and the underlying distributed ledger product lack naming and without speculation. Note distinction, some research data points are susceptible to distortion. In an that the list of additional attempt to filter out results of the term that are not related to the underlying distributed ledger platform (as opposed to the coin of the same name) we features in Sec. 1 does have sometimes used very specific searches, for example, formulating highlight system features queries that use the word "bitcoin" together with the word "blockchain" (i.e., relevant to this enquiry. 3 Among the systems considered but rejected were: Cardano, Digital Asset Platform, IOTA, Lisk, Ripple, Sequence, Stellar, and Stratis. 4 E.g., Cardano, Digital Asset, Lisk, Stratis. 5 E.g., IOTA, Stellar, Ripple. 6 Bitcoin has been included, largely due to the fact that the system always comes up in discussions of blockchain platforms. While it is an unlikely choice for most deployments, having the comparative data on the system is likely to be helpful to address the questions that are likely to come up during discussions of platforms. 7 See, https://mercycorps.org MERCY CORPS 4 run the search for ‘bitcoin blockchain’ rather than just ‘bitcoin’). In the case of Quorum, the issue relates to the need to filter out irrelevant references. The problem here is that the product name is also a term in common usage. As with the products above, if unchecked, this problem would result in over-reporting. In an attempt to filter out results of the term that are not related to the Quorum blockchain platform, we have sometimes used very specific queries, e.g., searching for the string "quorum blockchain" instead of for the single word "quorum." Our approach to these problems is of mixed effectiveness. While the modified query strings tend to knock out irrelevant references, they also invariably kill off a certain number of relevant references, hence resulting in under- reporting. It’s a balancing act and one we try to highlight in the “Notes on Interpretation” attached to each exhibit.8 The Evolution of Distributed Ledgers With the publication of a whitepaper in 2008, Satoshi Nakamoto launched the era of blockchain and distributed ledgers. The “chain of blocks9” outlined for the first time in Satoshi’s whitepaper existed for one reason only: to act as a ledger tracking the ownership of a digital currency named Bitcoin. In January of 2009, the Bitcoin experiment was launched and first blockchain was live. The Bitcoin network has grown and the system has been modified over the years by the developers involved in the project.10 The core functionality, however, has always remained the same: tracking the ownership of Bitcoin.11 While that first blockchain may have been designed to do only one thing, it does it pretty well. In the 10 years since the system’s launch it has never gone down or been hacked and, as Bitcoin has grown, it has competently managed large volumes of transactions with significant financial value. Bitcoin and its immediate progeny represent the first generation of distributed ledger technology (DLT); a convenient label might be “DLT 1.0”. By way of definition: A DLT 1.0 system is narrowly focused on one primary task, managing a digital currency. Bitcoin may have been the first, but it is not the only DLT 1.0 system. A number of the cryptocurrencies that popped up in the wake of Bitcoin actually started by forking the Bitcoin codeset and then modifying elements of that codeset to create something distinct (e.g., Litecoin). Fast forward to 2014: Vitalik Buterin envisions the next generation of distributed ledger technology and launches a project known as Ethereum. With an innovative technical architecture and investment of over $15 million12, the system was poised to be a game changer. Here was a blockchain that not only supported tracking ownership of a native coin, but also included a purpose-built business logic layer designed to allow a blockchain to incorporate programming that would automatically execute instructions, a functionality that became known as a “smart contract.” The Ethereum blockchain also supported the use of tokens that could be traded independently of Ethereum’s native cryptocurrency. Ethereum, with its meaningful expansion of functionality for DLT, heralded the 8 Once data collection was completed, we forwarded the data sheets to all the projects and asked them to verify the data.