Mary Amakihi 
Key Factors Determining the Success of Blockchain Consortia Initiatives
Blockchain consortium is now a popular and sort-after type of Blockchain. This article looks at the key factors determining the success of blockchain consortia initiatives.
Most blockchain technologies are made by foundations or consortia, whose members are usually business people who want to make and successfully use the technology.
Many different types of businesses have found that joining blockchain consortia is helpful. These include financial services, insurance, transportation, healthcare, medicines, and supply chain and logistics.
But when making or joining blockchain consortia, there are a few main problems that everyone in every business has to deal with.
These cover the group’s leadership, who owns, licenses, and uses the technology it creates, and any antitrust claims and problems that might arise if it wants to successfully launch blockchain technology in its business and ensure it is widely used.
As soon as Blockchain became the new big thing in technology, a new market and business system began to form around it. As time went on, we learned about more types of Blockchain.
Federated or Blockchain Consortia is one of them making a huge stir in the market.
Blockchain consortia are now a famous type of Blockchain, and many businesses are very interested in it. You may need to learn what this type of Blockchain is or how it works, so let’s take a walk-through.
What is Blockchain Consortia?
Blockchain consortia or federated Blockchain is a blockchain network where various entities manage the system.
However, it is restricted and not open to the public. It would be more comparable to private ones. However, even if it is permission, it can provide a decentralized framework.
How? As you know, the consortium comprises numerous entities rather than just one. As a result, every company receives the same treatment.
As a result, no single entity is reigning over the network, and all other organizations contribute to that. In actuality, think of it as a platform where many companies can join together and share information if necessary.
It is a beneficial collaborative environment for the blockchain industry consortia. Furthermore, there is no room for abuse on the platform.
Advantages of Blockchain Consortia
Blockchain consortia initiative has several advantages amongst others, some of them include;
- Lo transaction cost
- Cutting the cost
- No criminal entry
- Regulatory environment
Low Transaction Cost
One important thing about these blockchain consortia is that they offer lower transaction fees. It is essential to know that public blockchains say they have similar traits, but the truth is very different.
The network slows down a lot when many people use it at once. This makes it harder than usual to process transactions. When this happens, the fee for the purchase goes up.
You need to know that this is fine for the group. Only allowed people can get in because it’s a more controlled area. With that, it would be much more stable and able to take any force.
Cutting the Cost
The blockchain consortia industry design would make it very easy for you to cut all of your costs.
In contrast to public or private Blockchain, these are better for business use, making them easier to connect to your current network.
Putting money into this kind of blockchain industry consortium would benefit your business.
No Criminal Entry
You would want to avoid criminals in a collaborative setting. Unlike a public blockchain, this network is exclusively accessible to approved individuals.
As a result, every node would be validated, leaving no room for criminals.
Regulatory Environment
Businesses need rules to work right. There must also be rules because many groups will be working together here. Blockchain consortia can help you do well in a controlled setting and let them be decentralized.
Key Factors Determining the Success of Blockchain Consortia Initiatives
Here are some vital issues that will decide the fate of blockchain consortia in the nearest feature. Some of them are;
- Intellectual property
- Governance
- Antitrust
Intellectual Property
For any project to succeed, it is vital to agree on who will own the new technology and who can use it. Blockchain technologies may be built on open-source software by those who made them as part of a foundation or consortium.
However, consortium members usually have to give the project their software, materials, and knowledge.
So, the people in the consortium have to go through many complicated talks to agree on how each member can use the other’s intellectual property and private information to run the consortium.
That and how to own and use any new technology created. Suppose members of the consortium need to follow these rules.
In that case, rivals may be able to use their intellectual property or develop, monopolize, and use the technology made from it, which would be bad for the person who contributed and the other members of the consortium.
Members of a group also need to talk about the risks that come with blockchain technology not working as planned or claims that it violates the intellectual property rights of others.
It will be essential to consider how to divide these risks between people who contribute to technology and those who use it (usually by limiting the donors’ liability).
This will encourage people to contribute technology to the consortium and encourage many people to use that technology. The outcome of the talks on this issue could have a big impact on how well the technology is adopted in the industry.
This is especially true when technology users only have a few options for getting help from those who provided or developed technology that is later found to be copied or broken.
Governance
It can be hard to agree on the goals of the blockchain technology the consortium is working on and what role each member will play in its success.
Each participant often has different competing interests that must be carefully handled.
As the consortium comes together, some companies will try to shape their future so that the final answer meets their specific standards and legal needs.
They will spend much time and thought on this during the design phase to ensure this happens.
Others may need to care more about the exact shape of the solution, how much they invest, and how much control they have over the new technology.
They may be trying to get a better position than the other members in managing the consortium and the money they could make from using the technology successfully.
The companies still in the game may have joined just to get a seat at the table, hoping that one of the competing initiatives would succeed.
They may only want to make hard decisions or do something other than contribute to the decision-making process and the initiative’s funding.
Along the same lines, the tech companies working on the venture may want to make, market, and release the new technology as quickly as possible to become the most significant players.
They do this also to get the most out of their investment and use it as a launching pad to grow their businesses in other fields, with or without the other consortium members.
These differences can often lead to disagreements among members about the direction and operation of consortia.
This can slow down progress and sometimes break up the industry as companies leave to form competing consortia or look for different answers and standards.
A memorandum of understanding signed at the start of the project should clarify its goals, how many people are likely to take part, how much money they will be able to invest, and what role they will be able to play in running it.
Decentralization is an integral part of Blockchain and other distributed ledger technologies, but it can also make people argue about how to run certain things.
Members of a consortium can share data and information through a decentralized network of nodes located all over the world. They can do this without a single party.
Because of this, it can be hard to figure out which laws and rules apply to a given transaction without clear rules for governance and dispute settlement.
In a private partnership, everyone usually agrees on a sure way to settle disagreements.
For groups that work in regulated industries, one way to lower regulatory risk is to choose one point controlled by a regulator or a third party that acts as a neutral party in the network.
Antitrust
The companies in a consortium can’t outsource or ignore their regulatory duties.
They also have to ensure that working with competitors in the same industry to streamline business processes and create technology solutions that the whole industry can use won’t cause antitrust issues.
On the one hand, working with others in the same industry to create new technology should encourage new ideas and help customers by lowering costs and making transactions faster and safer.
But making a place where people from different companies can talk and share commercially sensitive information in a way that could lead to claims of unfair competition.
The reason for this is crucial since the blockchain technology created as part of the project might become one of the most popular solutions in the business.
People who used to work for service companies that provided old solutions that have been replaced by blockchain technology may say that they should have been included in the group.
To ensure that representatives at consortium meetings don’t share information that could lead to these kinds of claims, it is essential to make an antitrust “rules of the road” document outlining the types of conversations and information that can and cannot be shared.
Each representative should be given this document and told about it regularly.
Most of the time, an antitrust lawyer will also be hired to go to important meetings between representatives to keep the conversations on track and give advice on the spot to ensure that talks that hurt competition don’t happen.
Some consortia may try to get antitrust exemptions from the authorities in charge of antitrust, depending on the rules and laws that apply to the field in which they work.
These exemptions are more likely to be given to groups whose members have carefully written rules about handling and sharing private information within the group and rules about sharing certain customer agreements, practices, or prices.
Conclusion
Blockchain consortia are changing how the market has worked for years. They are working together instead of against each other to improve the world.
Getting involved in a consortium is an excellent way to start if you want to make your business answer.
