Blockchain consortium is a new blockchain technology that is rapidly gaining popularity. This article will answer whether joining a blockchain consortium is right for you.

In the past few years, blockchain technology has grown very quickly. Experts may have discussed how blockchain can be used for more than just cryptocurrency.

There is more to blockchain than just crypto. It is a system that helps people store and safely share large amounts of data. Each block has a set of data that is added using complicated methods.

These methods, known as hash techniques, protect the block with cryptography. Nodes are people who are part of a blockchain and can view and change its data.

In public blockchains, anyone can become a node, but there are strict rules in private ones.

There is now a collaborative blockchain that only a few people understand so far. It is made up of parts of both, which constitutes consortium blockchain.

What is a Blockchain Consortium?

A blockchain consortium is a group of companies that work together to run a blockchain network.

These groups often share the same aim or set of goals connected to the usage of blockchain technology, and they collaborate to keep the network running and manage it.

This can include establishing network rules and policies, managing network access, and coordinating efforts to build and upgrade technology.

Consortiums can be used to create a typical supply chain management system or a decentralized digital identification system, among other things.

Public or open blockchains are open to the public and may be accessed by anybody with an internet connection.

On the other hand, private blockchains are generally utilized by corporations for particular software solutions and to solve unique business demands.

A blockchain consortium is a third type of blockchain that combines public and private qualities. It is usually utilized within a company or a group of companies.

The primary purpose of a consortium blockchain is to improve organizational collaboration to address industry-specific difficulties.

Blockchain consortiums can help groups with common goals improve transparency, accountability, and efficiency.

According to Deloitte research, many firms are opting for consortium blockchains, with 74% adopting this type of network.

Many blockchain platforms are promoting themselves as the cornerstone for various organizational solutions.

Blockchain consortiums allow new members to join an existing structure and share information rather than create their own from the start.

This technology enables enterprises to collaborate to identify answers while reducing development time and costs. Federated blockchains are another name for consortium blockchains.

How Blockchain Consortium Works

A group of companies or individuals manages a consortium blockchain network. Instead of starting from scratch, more people may join a consortium and help manage an established structure and shared data.

Businesses may save money and grow by working together to solve problems.

A consortium blockchain allows diverse organizations to share work, resulting in operational collaboration, information sharing, and job duplication prevention.

A consortium blockchain has multi-party consensus. Instead of a complete worldwide community, like in the case of a public blockchain like Bitcoin, all operations are confirmed by unique pre-approved nodes.

Because of the small number of known members, a consortium blockchain frequently adopts a voting-based technique, resulting in minimal latency and efficient performance.

While only a supermajority of nodes can contribute to a block, all nodes can write and see transactions. This rule must be followed to introduce a block into the chain.

Components of Blockchain Consortium

Consortium blockchain structure is the plan and framework of a blockchain network run by a consortium, a group of organizations.

A consortium blockchain usually has a few main parts that make up its design. Here are the major components of a blockchain consortium.

Ledger

All events on the blockchain are kept in the ledger, which is a decentralized database.

With the ledger spread across all sites in the network, you can keep track of what’s going on with the network.

Nodes

The members of a blockchain consortium run the nodes that are part of the consortium. Every node keeps a copy of the blockchain and helps decide whether a transaction is true and whether to add a new block to the chain.

Smart Contracts

Smart contracts are agreements between a buyer and a seller written straight into code lines. These lines of code carry out the terms of the agreement.

In blockchain consortium design, these make executing transactions very easy.

Consensus

The consensus mechanism is what all of the computers in the network use to reach a unified opinion on the blockchain’s current state.

Blockchain consortiums may utilize different consensus processes, such as proof-of-work, proof-of-stake, or a voting system.

Application Programme Interface (API)

The API is the interface or set of protocols that allows different apps or systems to communicate with the blockchain. APIs can be used to develop various apps on top of the blockchain and access its data.

Governance

The consortium members usually set a blockchain’s governance structure, but it can differ based on the network’s use case and goals.

The rules and policies for the web and how choices about the network are made are part of the governance structure.

Permission

A consortium blockchain is usually permission, which means that only people who are allowed to can join the network and make transactions. Access control and rights can be set up to work best for the consortium.

Applications of Blockchain Consortium

Several other businesses actively need a blockchain, and the one with such a strong collaboration is preferable. This is why the following industries can benefit from a consortium blockchain:

Logistics
Finance and Banking
Health and Insurance

Logistics

Regarding logistics, several parties must stay in sync to keep track of the packages.

When a product is sent, all logistics centers can build their consortium blockchain with a smart contract that immediately updates the data at all centers. This will be highly beneficial to the logistics business.

Finance and Banking

Banks can collaborate to make a consortium because they occasionally need credit scores, Know Your Customer (KYC) information, etc.

These banks can view this group’s data on a single blockchain. It would help to know about people who have yet to pay their bills on time and to keep track of your credit score and other information.

Health and Insurance

Both hospitals and insurance companies must keep track of their huge amounts of data. In some areas, all the hospitals and insurance companies can work together to make a consortium blockchain.

This way, all the records of different patients can be kept up to date. This way, there will be no need to keep files and other notes of patients to look at their past or present health.

Advantages of Blockchain Consortium

Increased collaboration
Cost savings
More scalability
security

Increased Collaboration

Consortium blockchains let groups with similar goals work together on a single platform, which can help them work together more and develop better solutions.

Cost savings

Businesses working on a single platform can spend less to build and run their systems.

More scalability

Blockchain consortiums can handle more activities than the blockchain network of a single company.

Security

Security is better because only people can join the network through permissioned blockchain consortiums. This can make the network safer.

Control

Blockchain consortiums let groups of organizations set up a system of control that lets them decide what to do and how the network should work.

Disadvantages of Blockchain Consortium

Centralization
Limited accessibility
Dependence on consortium
Complexity
Limited adaptability

Centralization

Most of the time, consortium blockchains are more centralized than public blockchains. This can make them less open and easier to regulate.

Limited Accessibility

Consortium blockchains are usually only open to authorized users. This means that many people might not use them as public blockchains.

Dependence on consortium

The cooperation and success of a blockchain consortium rely on how willing and able the members are to work together. The group members may not be able to make the network work if they don’t work together well.

Complexity

Creating and keeping a consortium blockchain can be hard and needs specific technical know-how.

Limited adaptability

Blockchain consortiums tend to be less flexible and open to change than public blockchains. This makes it harder to respond to new situations and needs.

Is Joining a Blockchain Consortium Right For You?

A consortium blockchain is appropriate for enterprises requiring public and private blockchains.

This blockchain streamlines and improves operational and communicational flow among members while being cost-effective for your firm.

Coordination among blockchain platform members makes problem-solving more accessible and less time-consuming.

The key advantages of consortium blockchain are transaction scalability, high delivery speed, security, and automation. Any firm can build it utilizing open-source platforms tailored to their sector and ambitions.

Although businesses can create their criteria and circumstances, engaging with expert blockchain developers can be more beneficial.

Final Thoughts

These days, blockchain consortiums are growing in importance as more and more businesses look for ways to use blockchain technology to make their operations safer and more efficient.

Consortium blockchains let groups with similar goals work together on a single platform. This can help them work together better and come up with better answers.

Benefits and Drawbacks: Is Joining a Blockchain Consortium Right for You?