In anticipation of its mainnet launch and token sale on CoinList this month, Casper has emerged as one of the most talked-about projects in the blockchain space. When you dig into the technology, it’s no surprise why: Casper has the potential to usher in a new era of blockchain adoption and innovation.
Setting the Stage
Just a few short years ago, distributed-ledger technology (DLT) was the domain of a small group of privacy-driven engineers and hobbyists, carrying little mainstream appeal. Today, a number of the most renowned global brands across a variety of industries are integrating blockchain technology in an effort to upgrade their business models: Walmart is using blockchain to increase food supply chain transparency, JP Morgan developed a private blockchain that facilitates global, cross-border payments with a network of over 300 banks, Nike patented a system for tokenizing shoes on Ethereum’s blockchain, Jaguar partnered with IOTA to rewards drivers with crypto in exchange for their data.
So what exactly are the benefits of applying blockchain technology to an enterprise company? While there are many, the most significant advantages are increased transparency, efficiency, and security.
- Better Transparency — Most blockchains are designed so all nodes hold a copy of the entire ledger. In an enterprise setting, where all members of the consortium run independent nodes, this means that all parties can verify that other participants are good actors. Instead of having to blindly trust data from a single source of truth, all parties can verify the validity of the ledger in a more transparent, decentralized manner. This approach increases accountability to shared business deals.
- Better Efficiency — Blockchain technology cuts out the middleman with native payments and through smart contracts. Most blockchains have tokens that serve as the native currency which cuts out financial middlemen who would otherwise charge high fees. Furthermore, smart contracts allow agreements to automatically execute when conditions are met; thereby cutting out another middleman in the process and reducing operational costs.
- Better Security — As blockchains are distributed, all parties hold a copy of the ledger. This also means that in order to take over the network and tamper with the data, over 50% of the network must be compromised – a much more difficult feat than corrupting one single source of truth. This added security is invaluable for enterprise environments where business partnerships represent millions, if not billions of dollars of value. More recently, advancements around the “proof of stake” model have introduced more secure architectures than the “proof of work” model on which most early DLT protocols, including Bitcoin and Ethereum, relied.
The Adoption Trilemma
Companies evaluating the integration of blockchain into their tech stack face many decisions when selecting which protocol to build upon. This is a really tough decision for many companies as it forces projects to examine things through a short term and a long term lens as to what is best for their organization, what is best for their stakeholders, as well as the long term viability of the network. To make matters even harder, blockchain protocols used in enterprise are rarely upgradable, and maturing systems fail to adapt to changes in the evolving business landscape. Broadly, this boils down to the “Adoption Trilemma:” traditionally, you could choose any two of decentralization, performance and security — but not all three.
Since 2016, many companies have sought to provide enterprise blockchain solutions that offer the aforementioned benefits. Ethereum, Hyperledger, R3 Corda, Ripple, and Quorum are a few of the more widely known enterprise blockchain projects that have launched since. However, there has been no clear winner to date, namely because blockchains to date have not been able to deliver all 3 core tenets at once: decentralization, performance, and security.
With Ethereum, for instance, recent gas fee spikes demonstrate the issue with using Ethereum in an enterprise setting. Ripple on the other hand, doesn’t offer smart contract support which is a key advantage of using a blockchain based solution. Meanwhile, R3 Corda does not have a native token which means it cannot easily remove the financial middleman or facilitate on-chain governance. These blockchain solutions are largely outdated and cannot keep up with the needs of enterprises in 2021. They are not future proof.
Casper’s Solution for Effortless Enterprise Adoption
Casper is a proof of stake (PoS) blockchain designed for enterprises and developers. Initially designed by early Ethereum developers, the network uses the Correct-by-Construction (CBC) Casper specification and aims to resolve early layer one blockchains’ weaknesses. The main benefit of the CBC Casper implementation is that it is future proof. It is designed to be upgradeable over time, have predictable fees, and allow for easy developer adoption, including for Web2 developers building in blockchain environments for the first time.
Unlike Ethereum, Casper has upgradeable contracts which ensure developers and enterprises can improve their applications over time instead of having to be stuck with outdated code and designs. Stable and predictable gas fees ensure applications remain performant even when network activity spikes and is important for enterprises that need to budget precisely ahead of time.
WebAssembly support and the ability to compile Solidity code ensures both non-crypto and crypto devs can onboard quickly, reducing hiring costs. These are just a few of Casper’s many advantages, and doesn’t even include scalability features like concurrent execution and sharding, and accessibility features like weighted keys and permissioned chains. Casper is built to withstand changing business and developer preferences over long periods of time.
Both enterprise solutions providers and decentralized finance applications have already formed partnerships with Casper to leverage the Casper network’s strengths. A few examples:
- Metis, a layer 2 open framework for the creation, management, and scaling of Decentralized Autonomous Companies (DACs) recently partnered with Casper to move Metis from Ethereum to Casper. Metis’ MVP on Ethereum ran into challenges with Ethereum fees and latency, forcing the team to find an alternative solution. They were especially attracted to Casper’s developer friendly design, simple migration process, and upgradeable smart contracts.
- IPwe, a global patent market, has partnered with Casper to build an implementation on the Casper network to store, trace, and secure patent data on the Casper blockchain. The first implementation aims to leverage Casper’s weighted key management system to make sure that patent holders may selectively grant sensitive patent data access to permissioned individuals only.
- ACDX, cryptocurrency exchange offering structured products, has partnered with Casper to allow their users to accurately predict and guard for gas price spikes in derivatives trading, which is currently one of the most pressing pain points for derivatives traders on other protocols.