Mary Amakihi 
The Collaborative Advantage: Driving Innovations through Blockchain Consortia
Blockchain consortia are rapidly gaining ground in the world of blockchain technology. This article discusses the collaborative advantage of blockchain consortia.
There is a lot of talk about blockchain, but only a few real-world uses. We are interested in this type of technology because it started as a way to get around groups. Still, it has been taking on a core organizational function: working together.
In short, all blockchains are built on consensus algorithms that make it possible for people who normally wouldn’t be able to work together to do so.
There can’t be an agreement without parties to it; there are no parties, there are no parties. More and more business groups and government agencies are becoming interested in blockchain technology.
This is leading to the formation of more and more blockchain alliances. Blockchain consortia are groups of people or organizations that work together to create, run, and govern a shared blockchain-based system.
Each group has full power over the system. By being used in different places, blockchain has helped people work together in new areas and for new purposes.
Successfully launched blockchain-based systems, like the MediLedger Network, show how blockchain technology can make working together between organizations easier, more open, and more efficient.
So, managing chargebacks through the MediLedger Network (by automatically following business rules) lets any mistakes be found quickly, which keeps trade partners from fighting.
What Blockchain Consortia is
A consortium blockchain is a type of blockchain network run by a small group of organizations instead of being open to everyone, like a public or permissionless blockchain.
The consortium is a group of organizations working to ensure the network is safe and secure by validating transactions and adding them to the blockchain.
The Emergence of Blockchain Consortia
Consortia has become a popular way for businesses to collaborate on blockchain technology.
More than 40 blockchain consortiums have developed globally, with some attracting large investments, particularly from financial services industry companies such as Bank of America Merrill Lynch, Citigroup, Credit Suisse, Goldman Sachs, and JP Morgan.
Blockchain consortiums are classified into two types: business-focused and technology-focused. Consortia focuses on businesses constructing and operating blockchain-based platforms to address a specific business need.
Digital Trade Chain, for example, was launched in January 2017 by seven leading European banks to ” build a blockchain-based platform design to facilitate cross-border trade for small and medium-sized businesses.”
Members of the consortium include Deutsche Bank, Société Générale, Rabobank, and UniCredit, who all agreed to collaborate and fund the development of the new platform.
Deloitte has also collaborated with the Hong Kong Monetary Authority and Hong Kong’s main trade finance banks to create a Distributed Ledger Technology proof of concept for Trade Finance.
Consortia focused on technology and aimed to create reusable blockchain platforms based on technical standards. Hyperledger is one such example: it is an “open source collaborative effort created to advance cross-industry blockchain technologies.”
Leading finance, banking, logistics, and manufacturing firms are members, such as SAP, IBM, Intel, Fujitsu, and Daimler.
Fabric, the consortium’s first production-ready platform, was just published, featuring a modular architecture that allows users to plug and play components like consensus and membership services.
Some collaborations include both sorts of activities. R3, for example, is a collaboration of more than 80 of the world’s major financial firms, regulators, and central banks.
The consortium has stated that it plans to deploy a stable version of its Corda platform in Q3 2017, with an enterprise offering following later.
Advantages of Blockchain Consortia
- More teamwork
- Cost savings
- More scalability
- Security
- Control
More teamwork
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
Permissioned blockchain consortiums increase safety because only people can join the network. This has the potential to improve online security.
Control
Blockchain consortiums let groups of organizations set up a system of control that allows them to decide what to do and how the network should work.
Disadvantages of Blockchain Consortia
- 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 challenging 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.
Blockchain Consortia Driving Innovations and Collaboration
Blockchain consortiums are important in driving innovation and collaboration across multiple industries.
These consortia are a group of organizations that collaborate to investigate and develop blockchain solutions for everyday challenges or possibilities. Here’s how they help with innovation and collaboration:
- Standard development
- Research and development
- Regulatory Advocacy
- Collaborative pilot projects
- Network effects and ecosystem
- Knowledge sharing and education
Standard Development
Blockchain consortia are important in developing industry standards and best practices for blockchain technology.
Consortia can develop common frameworks, protocols, and interoperability standards by bringing together a wide range of stakeholders, including industry leaders, regulators, and academic institutions.
These standards allow interoperability and smooth integration of various blockchain systems, stimulating innovation and enabling widespread use.
Research and Development
Blockchain consortia allow member organizations to pool their resources, knowledge, and skills in exploring and developing blockchain technology.
Consortia can fund large-scale research projects that would be unaffordable for individual institutions by sharing costs and resources.
This collaborative R&D strategy speeds up innovation and allows for developing advanced blockchain technologies.
Regulatory Advocacy
Blockchain consortiums frequently collaborate with regulatory authorities and policymakers to push for favorable legislation and policies that promote blockchain innovation.
Consortia can influence regulatory decisions and affect blockchain technology’s legal landscape by presenting a united front.
This advocacy creates an environment conducive to innovation and collaboration by providing legislative clarity and lowering implementation barriers.
Collaborative Pilot Projects
Consortia enables member organizations to collaborate on pilot projects and proofs of concept.
Participants can investigate the practical uses of blockchain technology in real-world scenarios, identify potential problems, and assess the feasibility of adopting blockchain solutions through these projects.
Members may collectively promote innovation and advance blockchain adoption in their respective industries by sharing their results and thoughts.
Network Effects and Ecosystem Development
A blockchain consortium brings together a group of organizations from various fields, providing an environment where they can work together.
This ecosystem allows people from different industries to collaborate, form partnerships, and find business possibilities.
By bringing together different groups of people, consortia encourage innovation by letting people share ideas, resources, and knowledge. This leads to new blockchain-based goods, services, and business models.
It encourages new ideas and teamwork by using companies’ combined strength to deal with shared problems, set standards for the industry, push research and development and create an environment where people can work together.
Knowledge Sharing and Education
Members of a consortium can share information and work together on educational projects.
They set up workshops, conferences, and webinars where blockchain technology experts share their knowledge, study results, and the best ways to use blockchain technology.
Participants can stay current on the latest blockchain trends, developments, and use cases in this collaborative learning setting. This encourages a culture of innovation and teamwork.
The Future of Blockchain Consortia
As more businesses and industries see how useful blockchain technology can be, consortium blockchains are set to grow a lot over the next few years.
We expect to see more use of blockchain technology in many areas and the creation of new blockchain consortiums to solve problems in specific industries. Some of these problems include;
- Integration to emerging technologies
- Cross-industry collaboration
Integration to Emerging Technologies
As emerging technologies such as artificial intelligence, the Internet of Things, and 5G evolve, consortium blockchains will likely play a critical role in combining various technologies to provide strong, comprehensive solutions for organizations and sectors.
Cross-Industry Collaboration
Consortium blockchains that promote collaboration between enterprises from many industries may emerge.
This cross-industry collaboration may not only result in innovative solutions, but it may also open up new avenues for growth and development.
Conclusion
Consortium blockchains are a great way for businesses and industries to use blockchain technology because they combine decentralization, control, and teamwork like no other blockchain.
Consortium blockchains will change many areas in the next few years because they have many benefits, such as higher trust and openness, streamlined processes, and better data privacy.