Hybrid Blockchains and Their Growing Impact on E-commerce - News

Hybrid Blockchains and Their Growing Impact on E-commerce

SEP 10, 2019

Hybrid Blockchains and Their Growing Impact on E-commerce

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Blockchains are quickly gaining acceptance for their applications in both public and private enterprise.

Privately, people can use blockchains as a store of digital assets that are beyond the control of governments and hackers.

Publicly, blockchains are being used to develop better systems for logistics, finance, and governance. The power is derived from the fact that the information stored on blockchains is tamperproof and is transparently available for all users to access.

What are Hybrid Blockchains?

The hybrid blockchain lies somewhere between private and public blockchains, with an architecture that is not open to everyone but still offers blockchain features such as integrity, transparency, and security.

The public nature of hybrid blockchain grants everybody in the network equal rights to view, modify, and add their consensus to a transaction. But still, the identity of transacting members is never revealed to all the visible network participants.

This is much in the same way, an enterprise controls which employees can access sensitive data through rights management and permissions. However, businesses often want to separate such information for outsiders to access.

Thus, it can only be made possible on a hybrid blockchain, as the B2B platform, where privacy and confidentiality are valued over convenience. It doesn’t allow companies to interact with partners they don’t know, hence, a permissioned blockchain.

Hybrid Blockchains in the Real World

The most exciting aspect of a hybrid solution is that it allows a business to have its own permissioned database (private blockchain) for itself and its customers. The database then interfaces with a public blockchain to directly tap into the liquidity of global markets and apply more transparency to specific functions without putting everything on the blockchain.

Here is a look at specific examples of how hybrid blockchains are revolutionizing various corporate fields and the platforms helping to actualize this.


XinFin is a prominent hybrid blockchain platform that launched in 2017. It completed its ICO in March 2018 after successfully launching their first dApp, TradeFinex – a worldwide trade and finance platform.

Their hybrid platform runs on a delegated proof-of-stake consensus (DPOS) between trusted master nodes with both smart contracts and Internet of Things (IoT) atop of the protocol. This allows real-time data to be uploaded on the blockchain.

XinFin has since developed its public-private blockchain on Ethereum (public blockchain) and Quorum (private blockchain). They have also developed a unique network for Ramco Systems for the management of supply chain logistics.

The collaboration between XinFin and Ramco has led to a set of distributed ledgers which can prevent users from sending tokens to incompatible networks or non-existent addresses. The hybrid architecture has also reduced congestion of blockchain networks which impede safety, speed, and scalability to Ramco’s global enterprise clients.


Another fast-moving blockchain startup that has adopted the hybrid blockchain is VeChain; an enterprise-focused blockchain that is built on the Ethereum blockchain. They have taken the best of Ethereum and fine-tuned it for mass-market adoption.

The VeChain Thor ecosystem consists of two tokens; VET (VeChain) and VTHO (VeThor token).

This two-coin system gives users of the ecosystem multiple options. For instance, enterprises wanting to use the blockchain can buy the VTHO they need to put data on the blockchain from the open market. They can, however, also decide to purchase VET and use it to generate then VTHO which they can use to pay for their blockchain operations.

On Aug 7, 2019, VeChain partnered with Australian winemaker Penfolds to release a case of blockchain-encrypted wine bottles. The verification system allows for the bottle’s product information to be traced on a private blockchain by the wine company, which can be accessed with a chip reader. Other details, such as the bottle’s provenance information, can be viewed and verified by third-party auditors.

VeChain’s hybrid platform has added a couple of neat features that improve its capabilities to handle 50,000 TPS. This gives the platform numerous applications including tracking authenticity and shipping of food & drinks and tracking car ownership and history details with BMW on the VerifyCar app.

Ripple network and the XRP token

Another real-world application of hybrid blockchain includes the Ripple network and the XRP token.

Ripple has often been criticized for its centralized nodes which can arbitrate transactions in the case of a dispute. Plans are now underway to add a public blockchain to verify the operations of its private blockchain so as to make the network more secure and transparent for its users.

IBM and Maersk

After introducing proof of concept earlier in the year, IBM and Maersk have now launched TradeLens, the production version of an electronic ledger for tracking global consignments.

The mutually developed electronic shipping ledger records details of shipments as they leave their origin, reach various ports, are shipped abroad and eventually received.

During the transportation route, all of the involved parties in the supply chain can view tracking information such as shipment arrival times and documents such as customs releases and commercial invoices in near real-time via the permissioned blockchain ledger.

Maersk currently has 94 participants piloting the system, including more than 20 port and terminal operators.

Author’s Thoughts

Hybrid blockchains are seen as a great way to maintain safety while allowing more transaction output. They typically comprise of a public mainchain with private or permissioned side-chains anchoring to the main chain.

In this infrastructure, the side chains can reach consensus quicker, allowing more transactions. It also permits the addition of many side chains, which further scales transaction rates.

Hybrid Blockchain has vast potential for developing enterprise-grade applications of the open-source technology across diverse fields.

Moreover, the robust security and high transaction in hybrid blockchains ensure trusted cross-border payments for trade and financing.

Industrial applications are another field where hybrid blockchain can be effectively implemented across numerous sectors such as Travel, Energy, and Aviation. The tech can also be potentially used to support business process re-engineering, financing, supply chain, and procurement.

For eCommerce sites, hybrid blockchains are projected to bring many benefits, such as cost savings through the use of peer-to-peer networks and distributed apps (dApps) along with new revenue models.

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