A current report in the Ethereum Enterprise Alliance (EEA) highlights the way the Ethereum ecosystem has matured to some extent in which the network may be used by companies to resolve real-world problems. From logistics management use cases to payment solutions employed by the likes of Visa and PayPal, the report helps guide you the Ethereum network is continuing to grow to get probably the most valued public blockchains.
Although notable, the EEA report also highlights the rapid development of the Ethereum ecosystem has produced numerous challenges for businesses, particularly regarding energy consumption, scalability and privacy. For instance, the document claims that “sustainability was reported among the primary concerns, together with transaction charges, with regards to while using Ethereum Mainnet.” The report further explains the transparency connected having a public blockchain like Ethereum is a hurdle for enterprises seeking data security and trust.
As a result, upgrades for example sharding and layer-2 (L2) scalability solutions remain crucial for companies while using Ethereum network. Yet, the complex nature behind such implementations remains hard for companies to navigate. For example, the EEA report claims that “Many layer 2 solutions and sidechains are relatively recent projects, with relatively recent technology. They don’t always possess the history or proven security and stability from the Mainnet.”
The Merge can change how enterprises view Ethereum
However, skillfully developed predict the Ethereum Merge, that is scheduled to occur on Sept. 14, will probably improve enterprise adoption. Paul Brody, global blockchain leader at EY, told Cointelegraph that although the Merge won’t affect most enterprise use cases which are currently being used, it’ll change how companies see Ethereum. He stated:
“For years, competing layer-1 systems have spoken about how exactly Ethereum can’t obtain the Merge done. The incredible business maturity of Ethereum has worked nicely without anyone’s knowledge to get it done inside a careful and professional manner. Being an enterprise, that’s the type of institutional maturity I wish to see.”
Even though the Merge has been around development for quite some time, Brody described that upgrades on mission-critical infrastructure will not be rushed. As a result, he believes this will stay an important factor for companies while using Ethereum network. “I think future efforts to dismiss Ethereum won’t get much airtime within the publish-Merge era,” he stated.
While it’s too soon to identify how enterprises will respond to the Merge, Robert Crozier, chief architect and mind of worldwide blockchain at Allianz Technology, told Cointelegraph that his firm will monitor the progress from the Ethereum Merge to determine the way it stabilizes certain use cases.
This really is significant, as Crozier shared that Allianz only has considered Ether (ETH) and Ethereum-based use cases for experimentation purposes on the small-scale. The insurance coverage giant presently uses Hyperledger Fabric and also the decentralized ledger platform Corda to streamline mix-border car insurance claims throughout Europe. Crozier added:
“At Allianz, our Worldwide Motor Claims Settlement product utilizes Hyperledger Fabric at its core. We will have to understand and be reassured that other protocols like Ethereum would provide the similar benefits when it comes to simplicity of use, scalability and finality.”
With benefits in your mind, Brody described the Merge will ultimately lead to better scalability and privacy for enterprises. “I think we’re heading right into a new trend of enterprise applications. With scalability and privacy maturing, you’ll be able to deal with enterprise process needs quite comprehensively later on,” he stated.
Shedding light about this, Ivan Brakrac, senior decentralized finance market strategist at ConsenSys, told Cointelegraph that even though the Merge doesn’t directly increase scalability, numerous planned upgrades to Ethereum will address scalability within the next couple of years.
For instance, Brakrac described that transitioning the Ethereum network from proof-of-work (Bang) to proof-of-stake (PoS) was the initial step to allow “shard chains.” As Cointelegraph formerly reported, sharding may be the act of dividing up a database, or perhaps in this situation, the blockchain, into various smaller sized chains referred to as shards.
“This will reduce network congestion while increasing transaction throughput,” Brakrac remarked. This really is key for adoption, as Brody shared that EY’s enterprise clients searching at logistics applications will need support for 2–20 million transactions each day. “Pre-Merge Ethereum couldn’t have covered this,” he stated.
Regarding privacy, a study titled “The Merge for institutions,” printed by ConsenSys on Sept. 5 mentions that L2 solutions also address privacy concerns for enterprises. A rise in L2s will unlock greater privacy mechanisms for business use cases.
For instance, Brody described that EY created a zero-understanding proof L2 scaling solution referred to as Dusk to deal with Ethereum gas constraints and charges low. Based on Brody, multiple effective L2 systems will enable different choices for enterprises that could want more gas and larger transactions. He elaborated:
“Privacy begins to unlock an even bigger group of use cases for enterprise users. For instance, rather of minting one token that is representative of a load of product and provides origin information, I’m able to mint one token for every bit of inventory, after which I’m able to manage specific logistics inventory levels across a multi-company network on Ethereum.”
Additionally to scalability and privacy, sustainability concerns is going to be addressed when the Merge is implemented. Based on Brakrac, Ethereum presently uses an inordinate quantity of electricity, noting the Merge will reduce energy usage by 99%. “This can make Ethereum very sustainable over time. By design, this safeguards the network and resolves an ecological concern that is internet positive in the institutional adoption perspective,” he stated.
Indeed, skillfully developed think that sustainability efforts addressed through the Merge is going to be crucial for enterprise adoption. Dan Burnett, executive director from the EEA, told Cointelegraph that although L2s and sidechains have offered as bandages on sustainability concerns, large organizations with ecological, social and governance goals tended to be put off by building solutions on Ethereum due to its status to be eco unsustainable. Yet, he noted by using these concerns being addressed, the Merge may let the Ethereum business ecosystem to leap ahead.
Yorke Rhodes III, co-founding father of blockchain at Microsoft and board member and treasurer from the EEA, further told Cointelegraph the Merge will offer rest among the primary concerns for enterprises that get this amazing concentrate on ecological impact, for example Microsoft.
“This removes among the key arguments enterprises raise when looking for whether or not to build solutions on Ethereum mainnet,” he stated. To Rhodes’ point, Crozier pointed out that moving to some more eco-friendly proof-of-stake mechanism means that some enterprises, like Allianz, will require another take a look at Ethereum.
Benefits not immediate
With that said, the Merge will probably increase enterprise curiosity about Ethereum because of the growth of the network. Furthermore, Rhodes believes that taking out the key critique of sustainability will encourage additional movement towards the Ethereum Mainnet, of course this is equally as basics layer for security. “As a vital part of realizing the vision of Ethereum, the ETH merge sets some misconception for any closer enterprise review at some point,” he stated.
However, it’s important to indicate the benefits guaranteed through the Merge will not be seen immediately. Based on Brody, it will require a minimum of 12–24 several weeks until privacy-enabled use cases are in place following a Merge. He stated:
“I aspire to see pilots through the finish of the year, but feedback loops and infrastructure maturity needs time to work. Unlike consumer applications, there’s little persistence among enterprise buyers for items that do not work around the very first time-round and little readiness to experiment. Enterprise buyers are usually quite conservative, so the cycle will require more than consumer users.”