How to establish and maintain a scalable network using Amazon Managed Blockchain (Part 1)?

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Blockchain technology is making a big change and revolution in many industries including healthcare, logistics, supply chain, agriculture, real estate, IoT, trading, etc. These industries are doing business across the globe. They do transactions among nations, different organizations, communities, and individuals. Contracts, transactions, and records are among the defining structures in these major industries. These industries require a way to regulate and maintain administrative control to bring trust, accountability, and transparency to digital transactions. In digital transactions, there are chances of data corruption and accidental data deletion. Blockchain can solve this problem!

Blockchain is the safer way to record each activity in a transaction and keep data fresh while maintaining a record of its history. Therefore, we can benefit from both a historical trail of data and an instantly up-to-date record. Blockchain helps industries to build scalable networks of transactions. But it required the right skills and setup ability to take maximum advantage of Blockchain technology. You can eliminate the trouble while setting up a scalable network for your applications by using Amazon Managed Blockchain. 

In this blog, we will cover blockchain technology and Amazon Managed blockchain’s components, benefits, features, pricing, and customer stories. To see the full implementation of how to establish and maintain a scalable network using Amazon Managed Blockchain, refer to part 2 of the blog here.

In this blog, we will cover:

  • Major industries where Blockchain technology plays key role
  • What is Blockchain and how does it work?
  • Why is there a boost in Blockchain Technology?
  • Key market players of Blockchain Implementation
  • Challenges in existing Blockchain solutions.
  • What is Amazon Managed Blockchain?
  • What is Hyperledger Fabric and Ethereum?
  • Components of Amazon Managed Blockchain
  • How does it work?
  • Benefits of Amazon Managed Blockchain
  • Features of Amazon Managed Blockchain
  • Use cases of Amazon Managed Blockchain
  • Pricing
  • Customers using Amazon Managed Blockchain
  • Conclusion

Major industries where Blockchain technology plays a key role

Health care – Health data is extremely sensitive and should always be kept up-to-date and secure. When exact data is essential, distorted or lost health records and medicines might cause major problems. Then there’s the blockchain. Blockchain healthcare solutions can provide a solid unified platform for securely storing patient data that cannot be tampered with.

Supply chain – Blockchain technology can provide trust, transparency, and traceability to supply chains where actors are unknown or untrustworthy. These supply chains are almost by definition complex, multi-tiered, and multi-party, and they operate in a regulated environment that requires a higher level of traceability.

Amazon Managed Blockchain

Transactions – From the standpoint of speed, cost, and security, global payment administrations have provided the most promising starting point for blockchain. For many reasons, including manual procedures and sluggish administrative consistency, global installs now take days to complete. They also require honesty, and they usually fail due to communication errors.

Cybersecurity – Startups specializing in cybersecurity are also changing the way individuals keep critical information. As data migrates to DLT-secured systems, blockchain may eventually lead to more effective cyber-defense mechanisms.

What is Blockchain and how does it work?

Blockchain is sometimes a tricky word to unpack – people have different interpretations of what it means. But essentially, blockchain is just a distributed, secure database.”

Blockchain is a way of storing information in such a way that it is difficult or impossible to modify, hack, or cheat. It is a digital record of transactions that is duplicated and distributed across the blockchain’s global network of computer systems. Each block mostly on the chain contains a number of transactions, and whenever a new transaction occurs on the blockchain, a record of that transaction is added to the ledger of each participant. Multiple parties administer a decentralized system commonly known as Distributed Ledger Technology(DLT).

Therefore, Blockchain is a sort of DLT in which transactions are recorded using a hash, which is an unchangeable cryptographic signature.

The image below illustrates the several steps involved in processing a transaction. Any type of information or document could be transferred in this transaction. That is the power of Blockchain!

Amazon Managed Blockchain

Now, let’s understand this with a simple example of a money transfer scenario. 

What is Blockchain and how does it work?

Why is there a boost in Blockchain Technology?

According to, global blockchain technology revenues will rise in the next few years, with the market estimated to reach over 39 billion dollars by 2025. The financial sector has been one of the quickest to invest in blockchain, accounting for over 60% of the technology’s market value. The entire blockchain market will be driven by the growing desire to streamline company processes and the demand for supply chain management systems that are connected with blockchain technology.

Amazon Managed Blockchain

Even at this early stage in its development, blockchain has become an industry in its own right, owing to the technology’s potential and significant business interest in the capabilities it may deliver. Hundreds of millions of dollars are often invested in promising blockchain startup businesses’ initial offers.

Key market players of Blockchain Implementation

Key market players of Blockchain Implementation

In the Blockchain market, the key and emerging market players are IBM, AWS, Microsoft, SAP, Intel, Oracle, Bitfury, Cegeka, Earthport, Guardtime, Digital Asset Holdings, Chain, Huawei, BlockCypher, Symbiont, BigchainDB, Applied Blockchain, RecordsKeeper, BlockPoint, Auxesis Group, BTL Group, Blockchain Foundry, AlphaPoint, NTT Data, Factom, SpinSys, ConsenSys, Infosys and iXLedger.

Challenges in existing Blockchain solutions

Challenges in existing Blockchain solutions

Inefficient Technological Design: This is one of the most challenging components of using blockchain. Despite the obvious benefits of blockchain technology, it still has a number of technological flaws. A coding flaw or loophole is one of the most important aspects of this.

The Criminal Connection: Because of its secrecy, blockchain technology has attracted not only professionals but also criminals. Why? No one will be able to discover your true identity because the network is decentralized.

Low Scalability: Another challenge that occurs while installing blockchain is scalability. In reality, blockchains are only suitable for a tiny number of people. What will happen, though, if there is widespread integration? Ethereum and Bitcoin have the most users on the network right now, and it’s safe to assume they’re having trouble keeping up.

High Energy Consumption: The bulk of blockchain technology is based on the bitcoin architecture and employs Proof of Work as a consensus method.

Lack of Privacy – Blockchain and privacy aren’t really compatible. Complete privacy is not a priority because the system is powered by a public ledger.

Regulation – This is one of the most difficult aspects of using blockchain in a company. Many businesses are adopting blockchain technology as a transactional tool. Many products will be dependent on this. However, there are no clear regulations in place right now. As a result, no one follows any fixed rules when it comes to the blockchain.

Security Problems: Another important aspect is security. As we all know, every blockchain technology makes security assurances. However, like any other technology, blockchain has some security weaknesses.

Lack of Adequate Skill Sets: In addition to software and hardware, you’ll need qualified employees to administer blockchain technology. Blockchain technology, as you may be aware, is still in its infancy. Few people today have the skills required to support such technology.

Blockchains Can Be Slow: The blockchain is a complicated system. As a result, processing transactions take longer. Furthermore, the system’s encryption makes it considerably slower. Even though they claim to be faster than standard payment methods, they are unable to deliver in some situations.

Public Perception: To be successful, blockchain must first gain acceptance. Even while technology is revolutionizing the world, it is still insufficient to attract new clients.

What is Amazon Managed Blockchain?

Using the well-known open-source frameworks Hyperledger Fabric and Ethereum, Amazon Managed Blockchain is a fully managed service that makes it easy to join public networks or create and operate scalable private networks.

Amazon Managed Blockchain cuts the time and effort required to start up a network or join an existing one, and it scales automatically to meet the needs of thousands of applications processing millions of transactions.

It makes it simple to administer and maintain your blockchain network once it’s up and running. 

It keeps track of your credentials and makes inviting new members to the network straightforward.

A Hyperledger Fabric blockchain can be deployed using Amazon Managed Blockchain. A REST API can also be used to provide a simple interface for reading and writing to the network. Create an Amazon EC2 instance with a REST API server that communicates with Managed Blockchain via the Hyperledger Fabric SDK.

Amazon Managed Blockchain

With Amazon Managed Blockchain, blockchain goes even further by delivering trusted analytics, in which all permission users on a network’s behavior are verifiable, secure, and immutable.

The architecture of Managed Blockchain is event-driven. We may open up a wide range of analytic approaches by streaming events to Amazon Kinesis. For example, we could utilize Amazon Kinesis Data Analytics to analyze events in near-real time, Amazon RedShift to execute petabyte-scale data warehousing, and Amazon EMR to use the Hadoop environment.

Amazon Managed Blockchain

What are Hyperledger Fabric and Ethereum?

Hyperledger Fabric is a permissioned network that’s ideal for applications that need a lot of privacy and control.

Consider a financial application in which only a few institutions have access to specific trade-related data, while other network members are forbidden access.

Amazon Managed Blockchain

Ethereum is a public network and suitable for applications in which data transparency for all members is critical.

For example, an infinite number of farmers can join a network made up of farmers and government organizations, and information about their land, crop yields, and other details are shared across all members on the blockchain.

Components of Amazon Managed Blockchain

Smart contracts

  • Business logic code that resides on the blockchain.
  • An application that writes to the ledger.
  • Smart contracts can interact with components outside of the blockchain network (off-chain).

Consensus mechanism

  • How a network agrees on transactions and blocks.
  • Different blockchain frameworks have different consensus mechanisms (Proof of Work, Proof of Stake, etc.).
  • Impacts the transaction rate, energy consumption, hardware requirements, and security.

Distributed ledger database

  • Database that stores the current state and historical values of the data.
  • An append-only, immutable journal that has a cryptographically verifiable log of all transactions.
  • All nodes in a blockchain network have the same ledger.

How does it work?

The open-source Hyperledger Fabric and Ethereum frameworks are used by Amazon Managed Blockchain to create and maintain scalable blockchain networks.

Benefits of Amazon Managed Blockchain

Fully managed: You can quickly construct blockchain networks spanning several AWS accounts with Amazon Managed Blockchain, allowing a group of users to perform transactions and communicate data without the need for a central authority. It eliminates the need for manual hardware provisioning, software configuration, and networking and security configuration. Members of the network can vote to add or delete members using Managed Blockchain’s voting API. It allows a new member to launch and configure multiple blockchain peer nodes to process transaction requests and store a copy of the ledger after they have been added. Managed Blockchain also keeps an eye on the network and replaces nodes that aren’t operating well.

Choice of Hyperledger Fabric or Ethereum: Hyperledger Fabric and Ethereum are two major blockchain frameworks that Amazon Managed Blockchain supports. Hyperledger Fabric is well-suited for applications that require strict privacy and permission constraints and Ethereum where transparency of data for all members is important.

Benefits of Amazon Managed Blockchain

Scalable and Secure: Amazon Managed Blockchain can effortlessly scale your blockchain network as the number of applications on the network increases over time. Managed Blockchain offers a variety of instance types with variable CPU and memory configurations, giving you the freedom to select the best resource mix for your task. Additionally, Managed Blockchain uses AWS Key Management Service (KMS) technology to safeguard your network’s certificates, removing the need for you to set up your own secure key storage.

Reliability: The “ordering service,” a component of the Hyperledger Fabric design that ensures transaction delivery across the blockchain network, is more reliable with Amazon Managed Blockchain. The default ordering service in Hyperledger Fabric does not save a complete transaction history. The ordering service from Managed Blockchain is built on Amazon QLDB technology and features an immutable change log that accurately keeps the whole history of all transactions in the blockchain network, ensuring that you can save this information for the long term.

Features of Amazon Managed Blockchain

Features of Amazon Managed Blockchain

Fully Managed: Create a blockchain network in minutes

Open-source variety: Support for two frameworks – hyperledger fabric and Ethereum

Decentralized: Democratically govern the network

Reliable and scalable: Backed with Amazon QLDB technology

Low cost: Only pay for the resources you’ve used.

Integrated: Use with other AWS services with ease

Use cases of Amazon Managed Blockchain

Use cases of Amazon Managed Blockchain

Trading and Asset Transfer: Importers, exporters, banks, shipping companies, and customs departments must all collaborate in order to conduct business. Financial and trading consortiums can simply construct a blockchain network using Amazon Managed Blockchain, allowing all participants to transact and execute trade-related documents electronically without the need for a central trusted authority.

Unlike alternative techniques that require trade-related paperwork to be transferred back and forth between stakeholders and take 5-10 days to complete, transactions in a blockchain network designed using Managed Blockchain may process quickly.

Retail: Merchants regularly strive to improve loyalty programs by partnering with other merchants, banks, and third parties to offer a greater selection of consumer benefits that may be redeemed across a diverse network of partners. Using a central agency as an intermediary for reward transactions can slow things down, requiring 5-7 days on average.

A group of merchants can use Amazon Managed Blockchain to create a blockchain network that allows them to communicate and authenticate rewards information quickly and transparently, without the requirement for a central authority to conduct rewards transactions between retailers.

Supply Chain: Small businesses commonly rely on distributed supply chain networks, in which no single entity is responsible for item transit from beginning to end. Each supplier or distributor can join the blockchain network, create their own distributed ledger, and control all data linked to the transportation of commodities, including timestamps, ports of entry, and the volume of items received.

Pricing of Amazon Managed Blockchain

With Amazon Managed Blockchain, you pay as you go, with no setup fees or minimum payments. For hyperledger fabric, you pay an hourly charge for your network membership, peer nodes, and peer node storage. You also pay for the amount of data that you write to the network. When you’re finished with the network, you can leave and stop paying. 

Pricing of Amazon Managed Blockchain

Customers using Amazon Managed Blockchain

Customers using Amazon Managed Blockchain


We’ve looked at the components, benefits, features, pricing, customers, and how it works with blockchain technology and Amazon Managed blockchain in this blog. You can also easily join public networks or establish and maintain scalable private networks using the famous open-source frameworks Hyperledger Fabric and Ethereum. In a future blog, we’ll walk through the whole deployment of Amazon Managed Blockchain with step-by-step instructions. Stay tuned to keep getting all updates about our upcoming new blogs on AWS and relevant technologies.

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