Consortium Blockchains - Bridging Public and Private Blockchains

Blockchain technology is the revolution in this era. They help us to handle data and the transactions with efficiency. In this post I will discuss consortium blockchains. How these are different from public and private blockchains.

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What is a Consortium Blockchain?

A consortium blockchain is one type of blockchain in which the consensus process is controlled by preselected nodes or organizations rather than a single entity. These networks are permissioned that only authorized users can validate the transactions.

Core Features of Consortium Blockchains

1.Semi Decentralization:

• These blockchains are controlled by several organizations. This semi decentralized approach balances control and collaboration.

2.Permissioned Access:

• Consortium blockchain only allows approved members to participate. They ensure that only trusted parties can validate transactions and have access to the ledger.

3.Committee Governance

• A board of participating entities controls a consortium blockchain. They work together to take decisions and in order to develop consensus.

4.Improved Privacy

• Access to transactional data is available only to authorized parties in consortium blockchains. So they provide confidentiality of data.

5.Increased Efficiency

• Consortium blockchains are efficient in working. Their transaction speed is more than the public blockchains. So these blockchains have higher throughput.

Advantages of Consortium Blockchains

1.Collaboration And Trust

• The use of multiple trusted organizations makes collaborative relationships as well as trust among participants in a consortium blockchain. This is especially useful in the corporated industries.

2.Cost Effective

• Consortium chains reduce computational costs. These chains limit the number of validators. And ultimately the transactions cost becomes low.

3.Enhanced Security

• These blockchains operate under controlled conditions. They reduce the risk of malicious attacks to the network.

4.Scalability:

• Consortium blockchains provide high scalability. It uses less nodes and it operates in the controlled environment. We can do transactions without any delay.

Differences Between Public, Private, and Consortium Blockchains

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1. Access and Participation:

   • Public Blockchains: These are open to everybody. These can be used by any person. Anyone can take part in the consensus process.

   • Private Blockchains: These are controlled by a single organization. Only the authorized authorities can access and participate in these blockchains.

   • Consortium Blockchains: These are controlled by a group of organizations. Here membership is limited only to approved members. Every member has limited control according to the share in the network.

2. Decentralization:

   • Public Blockchains: Fully decentralized, with no single entity in control.

   • Private Blockchains: Centralized under one organization.

   • Consortium Blockchains: In terms of decentralization, they are not entirely decentralized. These are controlled by a group of entities.

3. Transparency and Privacy:

   • Public Blockchains: Totally open and anybody can see every transaction.

   • Private Blockchains: These focus on privacy. Only the authorized participants have access to the transaction data.

   • Consortium Blockchains: These are transparent but still they have some privacy for the special and sensitive data.

Applications of Consortium Blockchains

1.Financial Services:

• Interbank transfers and cross border payments can be done using consortium blockchains. Financial services become efficient. The cost of the transactions is also reduced.

2.Supply Chain Management:

• Consortium blockchains allow different people to work together. Manufacturers, suppliers and retailers work together in the supply chain management. It improves visibility, tracking and trust. So because of consortium blockchains supply chain management becomes easy.

3.Healthcare:

• Healthcare companies and insurance companies can confidentially use consortium blockchains to share information about patients. These play roles to process bills easily. We can also control the distribution of the drugs.

4.Energy Sector:

• Energy companies can work together on consortium blockchains to organize energy grids. They can sell credits for electrical power. Energy companies can keep balance in the resource allocation.

Conclusion

Consortium Blockchains stand in between Public blockchains and private blockchains. It helps healthcare professionals. The users can send health billing claims electronically within seconds. They ensure privacy of patients records. They still have access to disclose some important information. Consortium blockchains are semi decentralized that we can get transparency as well as if there is the need to hide some sensitive data then we can hide that data. These play role in different fields such as in healthcare, finance, energy sectors and government institutions.