Microsoft’s Azure Blockchain Could Ease Enterprise Adoption by Eliminating Mining

Different Needs, Different Blockchains

One obstacle standing in the way of blockchain adoption is the hesitancy on the part of enterprise level companies to dive head first into the deep end. Among their concerns is the need for mining and all the energy requirements and bottleneck-induced headaches that brings.

Bitcoin and Ethereum are popular because they provide power in the hands of people with their decentralization and immutable record. Enterprises could benefit from blockchain too, however, public permission-less blockchains like Bitcoin or Ethereum don’t quite work for them. Total decentralization is well and good for individual libertarian-types, but not ideal for a major corporation.

Enterprises have proprietary data and can’t allow anonymous or pseudonymous users to access them freely. The ‘Proof of Work’ (POW) consensus algorithm may provide excellent security but also has astronomic electricity costs. Enterprises can’t afford to have the scalability concerns and network latency that Bitcoin or Ethereum subject themselves to.

A blockchain suited for enterprise needs would only allow trusted participants like employees, customers, and business partners to join. They also need ease of operation for their blockchain network. While you can build your private blockchain, the process isn’t simple. You need to address any issues that may arise with the network, infrastructure, protocol programs, and more. This is where the new Microsoft Azure blockchain offering can prove its value.

Microsoft Azure blockchain
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Microsoft Azure blockchain offers Ethereum sans mining and with easy implementation. Image credit: bsdrouin / Pixabay

Azure Ray

Microsoft is offering ‘Blockchain as a Service’ (BaaS) and including the Ethereum blockchain in their Azure cloud. This is a permissioned enterprise blockchain that companies can implement irrespective of industry verticals. Azure retains the smart contract component of the Ethereum blockchain platform but not the POW algorithm. Microsoft recognizes that enterprises will only have trusted users and thus do not need POW to beef up security for untrusted participants.

Azure uses a Proof of Authority (PoA) consensus algorithm, where users submit transactions to a few high-availability nodes with transaction validation authority. PoA provides an intriguing alternate to PoS, another algorithm currently being floated as an alternative to the increasingly unworkable Proof of Work, which is currently gaining traction on the Ethereum mainnet.

PoA allows transactions to be processed in a flash since only a few nodes need to weigh in on validity. This is perfect for enterprise companies who cannot sit around on their hands waiting for a fleet of miners or voters to decide what’s authentic and what’s not. Who controls the nodes is up to the enterprise, but it’s safe to assume it will be higher ups in the company, members of the board, or perhaps major stockholders.

Azure also makes blockchain implementation easy. Enterprises can use a set of tools to automate the provisioning of this blockchain, implementing it within a 5-45 minute window depending on the complexity.

Microsoft isn’t stopping there. Currently, developers need to code smart contracts in the public Ethereum blockchain using its proprietary language Solidity, but not enough know it. Microsoft solves for this by allowing users to code smart contracts using established programming languages like C or C++. The Project Bletchley service allows for developers to build DApps on Azure as well.

If and when blockchain breaks through into the mainstream it will be on the shoulders of major companies like Microsoft. Seeing all the benefits Azure has for companies, it’s not hard to see why.

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Anujit Kumar is a staff writer for BlockTelegraph. He covers market action and the latest in applications and technical development.

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