A consortium blockchain is a subtype of blockchain technology. Compared to a public blockchain, a consortium blockchain has fewer nodes but it is more secure and scalable in nature. This is due to the reduction of load on the network and allows more security.
A consortium blockchain is a type of semi-decentralized network in which members are not granted to a single entity. Instead it is granted to a group of individuals or ‘nodes’. It offers greater network security and provides significant degrees of control, faster processing, and makes it more efficient and secure in many ways.
In this article, we will explore the differences between consortium blockchains, public blockchains and private blockchains, and the uses of consortium blockchains.
What is a public blockchain?
Public blockchains are most commonly found in the cryptocurrency realm. These blockchains are public because anyone can view the transactions that take place, and you can join the network simply by downloading the necessary software.
These blockchains are often permissionless. This means that anybody can engage with the consensus mechanism and be rewarded for participating in the blockchain. By nature, such blockchains are highly decentralized. As a result, it is expected that public blockchains are more censorship-resistant, meaning that there will be protocols incorporated by the blockchain to prevent malicious actors from harming the environment.
The emphasis in security on public chains, however, leads to trade-offs on the performance front. Many encounter scaling problems and throughput is relatively weak. Moreover, pushing changes to a network without splintering it can be a challenge, as it is uncommon that all participants agree on the proposed changes without any dispute.
What are private blockchains?
As compared to public blockchains, private blockchains establish rules dictating who can see and write to the chain (they’re permissioned environments). These are not decentralized systems, since some users are in control while some are not. However, many nodes in the blockchain are still able to maintain a copy of the chain on their systems. These networks are more often used in private enterprises and companies.
What are consortium blockchains?
Consortium blockchains are networks that are a mixture of public and private blockchains, which combine characteristics from both systems. The most prominent difference in the way such blockchains achieve their consensus. Instead of an open system (public blockchains) where anyone can validate blocks or a closed one (private blockchains) where only a single entity can do so, a consortium chain sees a handful of equally-powerful parties function as validators.
Rules of the blockchain are flexible. For instance, only validators can make changes to the blockchain, while other members can view the blockchain. Changes can be easily rolled out as a result of a few number of appointed individuals being validators. This blockchain network is best used in a setting where multiple organisations operate in the same industry.
Benefits and risks of a consortium blockchain
Consortium blockchains are not prone to monopoly or complete centralisation due to the presence of multiple figures in authority. Transactions are made more efficient due to the fewer number of users in the blockchain. Rule breakers are easily detected and removed swiftly from the blockchain.
On the other hand, some problems such as corruption may occur due to the blockchain’s centralized form.
In Conclusion
A consortium blockchain is a mixture of public and private blockchains that share their characteristics. Individuals and enterprises have to make sure that they carefully consider the pros and cons of each blockchain before choosing one.
