The storing of data and information using blockchain technology occurs inside a series of digital blocks connected through hash algorithms, which in turn increases the data’s level of security within each block.
The usage of blockchain technology in cryptocurrency, a digital record of transactions distributed across a blockchain, has become the most well-known use of this technology.
The public, private, and consortium blockchains are the three primary varieties of blockchain technology that are now in use.
While private blockchains are used by individual businesses to facilitate commercial usage by constructing corporate software solutions with them, public blockchains are publicly available to anybody who has access to the internet.
A consortium blockchain is a kind of blockchain that combines public and private blockchains into a single network.
Unlike a private blockchain, which only includes one company’s blockchain, a consortium blockchain incorporates many companies’ blockchains working together.
In contrast to a public distributed ledger, it is still only accessible to a limited number of users with administrative authority over their accounts.
What is Consortium Blockchain?
Consortium blockchain technology is a subcategory of blockchain technology.
These networks are made up of existing nodes and have ruled over who may join them.
Compared to public blockchains, networks of this type have a smaller number of nodes; nonetheless, their nature is to be safer and more scalable.
It also results in less strain being placed on the network and makes it possible to increase network security.
Even if it is less transparent than a public chain, certain hazards are still involved in using this method.
It is a type of network in which fewer members are known to the network. It employs a method that is based on voting to guarantee that there is very little latency and that the performance is outstanding.
Every node in the network can record the transaction, but they cannot add blocks individually.
Also Read: Everything You Need To Know About Binance Smart Chain
On the other side, before it can be added to the network, every block contributed by another node must be checked for accuracy.
This enables more interaction and creativity to take place.
A consortium blockchain is a semi-decentralized network in which members are not awarded to a single company.
Instead, it is given to a collection of individuals, often known as “nodes.” It provides network security that cannot be found in public chains.
In addition to this, it enables considerable degrees of control, quicker processing, and many other improvements that make it more efficient and secure.
The term “hybrid blockchain” refers to a system combining elements of public and private blockchains.
In accordance with these chain consortium network guidelines, there are various members, each regulated individually.
Similar to how the number of members is restricted, it will be difficult for a single entity to control the system because of this restriction.
The magnitude of a group’s effect may be inferred from the scope of the system.
The blockchain consortium system is the most appropriate choice for businesses that want to expand their operations while simultaneously increasing their profits.
Advantages of consortium blockchain
The following advantages accrue to the enterprises as a result of their use of consortium blockchain technology:
Validation. It has been determined and confirmed that there are a specific number of members in the consortium blockchain.
The authentication they carry out lowers the risk of data being compromised.
The nodes that violate the established protocols are quickly recognized and punished accordingly. Other possible risks, such as SQL injection, DDoS attacks, and “man in the middle” situations, are minimal in a consortium blockchain.
Control. Rather than being controlled by a single entity, the blockchain is managed by a specific set of genuine players.
This control enables the establishment of regulations, the adjustment of balances, the editing or cancellation of erroneous transactions, and the promotion of complete collaboration among businesses working toward shared objectives provided confirmation is obtained from each participant.
Security. The information contained on the authentic blocks is off-limits to the general public and cannot be accessed in any way.
However, the partners in the consortium have immediate access to the information, which ensures a high level of security.
Clients of the platform will develop more confidence and trust as a result.
Economic. When used inside the context of a consortium, the consortium blockchain does not levy any service or transaction fees, in contrast to other blockchains.
Agreement. In accordance with the governance system, a contract is often ratified by a very small percentage of the network’s nodes.
Because there are fewer requirements to meet, reaching this kind of agreement is less difficult.
These features have a direct impact on the outputs of the transactions, which ultimately results in faster operations and increased scalability.
Flexibility. The participation of a number of validators in other blockchains might result in difficulties in reaching consensus and synchronization. However, since fewer people are participating in the consortium blockchain, problems of this kind are easier to prevent.
Energy requirement. The mining of non-essential data focuses on using energy only on regular tasks. In addition, the proof-of-vote agreement does not need a significant amount of energy.
The Disadvantages of Using A Blockchain Consortium
However, several features of the consortium blockchain make it less desirable than other blockchains, even though it has significant advantages over other blockchains.
The structure of the network. Due to the centralized nature of the network structure, consortium blockchain can be easily exploited by malicious players. Due to the small number of participants, it is reasonable to assume that some individuals have engaged in unethical conduct. Developing a shared infrastructure ensures a higher level of safety than the operation of a single business.
Effectiveness. It has not yet been established whether or if the consortium blockchain technology is effective.
Framework. The Consortium blockchain doesn’t have a common structure as other blockchains do. Standards for the industry are met by solutions such as R3’s Corda, JP Morgan’s Quorum, and Hyperledger. These standards are needed for private blockchains.
A delicate procedure for getting things started. Since there is less flexibility, it takes a lot of time and effort to set up a standard network that connects several businesses. Because all of the participants are required to recognize the protocols, the process of launching a new blockchain is not a simple one.
Lack of cooperation. There are instances when the parties cannot collaborate and come to an agreement, which slows down the development process.
Upgradation. Updating the procedures may be challenging in settings where there are more participants than at the beginning of the process.
A consortium blockchain is an appropriate solution for businesses that need public and private blockchains to operate effectively.
This blockchain improves the efficiency of the operational and communicational flow between the members of your company, making it a cost-effective solution for your business.
The cooperation between participants on a blockchain platform makes the process of problem-solving simpler and more efficient.
The key advantages of using consortium blockchain are scalability of transactions, rapid delivery speed, increased security, and increased automation.
Using open source platforms that are tailored to the sector and the objectives that have been established, any company may develop it.
Even while enterprises can choose their own norms and circumstances, it may be more productive to engage with blockchain developers with professional experience.