Consortium blockchains are used in industries where multiple parties need to collaborate on a shared ledger but where there is a need for greater control over who can participate in the network and how it operates. A consortium blockchain could be used by a group of banks to share information about financial transactions. It can be shared by a group of supply chain partners to track the movement of goods as well.
Consortium blockchains are different from fully decentralized networks. They are a type of blockchain that is operated by a group of organizations or entities rather than being fully decentralized like public blockchains such as Bitcoin. The participating organizations share control over the network in a consortium blockchain.
Mainly consortium blockchains provide a higher level of privacy and security than public blockchains. Because the participating organizations are known and trusted entities, there is less risk of malicious actors attempting to attack the network. The consortium agreement or governance model can specify rules and regulations for how the network operates. That level of control is not possible on public blockchains. They are faster and lower-fee blockchains than public blockchains because the participating organizations are known to each other. For that acquaintance, there is less need for the network to perform complex consensus algorithms to verify transactions. So it’s fast with less fee.
But the issue is the determination of who should be allowed to participate in the network. There should be a system to allow parties to contribute to the network. Their selection criteria will be difficult in the back end. Otherwise, it is all good compared with the public chain. Changes that need to be made to the network should be a critical decision to take. Managing these disagreements and ensuring that the network remains functional and secure can be a complex process.
~ Regards,
VEIGO (Community Mod)
