Enterprise Blockchain Challenges and Architectural Strategies for 2018

Mark Rakhmilevich, Senior Director of Blockchain Product Management at Oracle, focuses on Oracle Blockchain Cloud Service and guides enterprises, ISVs, and system integrators in building blockchain applications and integrating enterprise systems with the platform.

Conversations with blockchain enthusiasts reveal industry‑specific use cases and the proof‑of‑concepts that demonstrate blockchain value in enterprises.

When asked about production deployments, they raise objections, pointing out implementation challenges and gaps in production readiness.

Will 2018 bring a significant shift in enterprise blockchain production deployments?

From numerous 2017 customer dialogues, successful use cases ranging from PoCs to pilots and production challenges can be distilled into five enterprise‑level requirements: scale and performance, business resilience, security and confidentiality, supportability and manageability, and enterprise integration.

Enterprises using blockchain are recognizing the need to address these challenges; in 2017, several vendors (including Oracle) announced that their blockchain platforms would focus on these needs.

With all the improvements to enterprise blockchain platforms, 2018 is poised to be the year enterprises move from experimentation to production.

Large‑Scale Cluster Performance

Many enterprise systems process hundreds or thousands of transactions per second. For example, a large Asian telecom processes over 100,000 billing and mobile‑payment transactions per second, and a major credit‑card processor peaked at more than 13,000 tps years ago. Enterprises therefore care about creating large blockchain networks with hundreds or thousands of members that can handle growing transaction volumes while delivering sub‑second latency.

Although today’s blockchain applications may not need such throughput, most real‑world blockchains do not approach 100 tps—Bitcoin averages about 7 tps and Ethereum roughly twice that, with transaction latency ranging from minutes to hours. Enterprise blockchains need higher throughput and, for many use cases, less than one‑second transaction latency.

Surpassing these limits requires an architectural approach that separates concerns (different work types run on independent, scalable servers or containers), leverages asynchronous streams, parallelism, faster consensus protocols, and optimized execution environments.

Some of these architectural principles already exist in Hyperledger Fabric, a Linux Foundation project Oracle joined in 2017, and can be extended with experience from similar systems to deliver hundreds or thousands of tps for enterprise workloads.

Additionally, a blockchain that ties every member to a legal entity needs a robust and efficient onboarding process. Enterprise PoCs rarely involve more than twelve participants.

New‑member onboarding processes often make assumptions and shortcuts, lacking real‑world scrutiny; therefore, effective tools are needed to handle adding organizations to a production business network with all necessary verification, approval, and identity‑management services.

Members must be able to deploy validating nodes across multiple high‑availability resource pools in distributed cloud or on‑premises data centers.

Resilience

Enterprise systems are built to avoid downtime using high‑availability services and to recover quickly when components fail. Preventing small issues from causing large outages and enabling rapid fault recovery are key to high availability for any mission‑critical system.

Traditional enterprise software from Oracle and other vendors uses services and redundant replication to survive single‑ or multiple‑component interruptions. Similarly, deploying redundant peer nodes, ordering service clusters, and replicating other blockchain components within each member organization forms a critical foundation for blockchain infrastructure recovery, leveraging Hyperledger Fabric’s architecture.

Beyond redundancy, automatic monitoring, and component recoverability, continuous embedded backup of configuration and ledger data ensures most failures are resolved automatically without human intervention.

Minimizing manual intervention is important because studies show roughly 70 % of outages stem from human error introduced while correcting other problems or adjusting configurations.

Security and Confidentiality

Security assessments for blockchain deployments examine how the ledger restricts transaction and ledger access to authorized participants, ensures encryption of data in transit and at rest, and validates that network messages are tamper‑proof with valid digital signatures.

Enterprise blockchains start with a permissioned network model, meaning all members are known legal entities that must register with a Membership Service Provider (MSP), which issues enrollment certificates linking member identity and attributes to cryptographic keys for signing.

Digital signatures applied to all network messages enable nodes and clients to verify the sender and message integrity, complementing transport‑level security that authenticates endpoints and encrypts message flows.

Automatic encryption of stored data implements best practices for data‑at‑rest protection. When this foundation is transparently applied to all security‑critical communication and ledger data, it preserves blockchain integrity and thwarts most hacker attacks.

When a blockchain Certificate Authority registers a new member organization and issues its digital certificate, the underlying process relies on correct authentication of the organization’s identity and access rights, requiring strong identity‑management and key‑management capabilities.

Because credentials can still be stolen via spear‑phishing or social engineering, certificate revocation mechanisms must be part of the solution to prevent use of compromised certificates.

Continuous access to blockchain REST APIs or operational interfaces from external client applications or admin users demands robust multi‑layer access control—logical, physical, and data security controls—combined with adaptive or behavioral authentication that compares user behavior against historical patterns and raises alerts on significant deviations.

Beyond external security, enterprise blockchains must support confidential transactions, for example by using channels that isolate subsets of peers and maintain private ledgers accessible only to participants on the same channel.

Additional critical features include fine‑grained access control enforced in smart contracts, private point‑to‑point interactions that limit transaction visibility, and selective encryption of sensitive data—each enhancing data and transaction privacy.

Supportability

Once an organization builds a PoC and proves the value of applying blockchain to a specific use case, how does it move the solution into production to deliver the promised results?

Who assembles, hardens, and supports the blockchain network components and underlying infrastructure? Who provides troubleshooting, daily management, monitoring, and handles patches or upgrades to new versions? In production blockchains, operations and supportability become critical, encompassing dynamic configuration, SLA monitoring, fault diagnosis, and lifecycle management of patches/upgrades with backward compatibility.

One answer is Blockchain-as-a‑Service (BaaS), which leverages a provider’s ready‑made infrastructure and operational capabilities to manage, monitor, patch, and maintain the underlying platform, allowing enterprises to focus on the business value of blockchain applications.

The service provider integrates and maintains the core technology stack, monitors the blockchain network, diagnoses faults, and offers an operational interface for dynamic configuration, SLA monitoring, policy management, and tools to manage the smart‑contract lifecycle—deploying initial chaincode, upgrading to new versions, etc.

Integration

Many multi‑party processes and enterprise business interactions can benefit from using blockchain to touch records across numerous enterprise systems.

In the short term, blockchain will extend rather than replace many existing enterprise systems (e.g., core banking, ERP, supply‑chain management, human‑capital management). However, building these integrations one‑by‑one is complex and costly. Businesses need pre‑built on‑ramps for enterprise systems and modern event‑ and API‑driven integration methods to invoke transactions, share data, and capture blockchain events and ledger updates into record systems.

For example, a shipping transaction initiated in a supply‑chain management system can trigger a blockchain transaction that updates order information and related metadata stored on the distributed ledger. In an outbound integration scenario, an account transfer linked to invoice settlement on the blockchain could emit an event to update an internal general‑ledger account.

Transforming an isolated blockchain PoC into a fully mature enterprise component depends on simplifying and accelerating such integration capabilities. Application integration toolkits that handle typical business processes and events are a promising approach.

This can be further extended with API‑driven development that leverages REST API calls to invoke blockchain transactions and query the distributed ledger, relying on a hosted API platform. These tools help rapidly deliver innovative applications that drive enterprise innovation while integrating existing back‑end systems such as general ledgers, ERP, SCM, and other systems essential for information sharing and transactions with external organizations.

Conclusion

Last year, blockchain saw extensive experimentation in financial services, supply chain, other industries, and government operations (e.g., the U.S. General Services Administration’s fast‑track process for 70 contracts).

To bring these products into production in 2018, the technology must mature in the key areas described above. Open‑source alliances like Hyperledger and enterprise software vendors are actively tackling how to meet these requirements.

Together, we will help enterprises adopt blockchain technology as a core component of their mission‑critical IT systems.