What is a Consortium Blockchain?
A consortium blockchain is a blockchain in which the consensus process is controlled by a preselected set of nodes. One could, for example, have a consortium of 15 partners, each with a node, validating 10 of each of the 15 partners and each block, so that the block can be fully incorporated into the blockchain.
Reading the blockchain can only be assigned to one participant. Alternatively, all participants in the consortium blockchain can have the right to read the blockchain.
There are also hybrid routes, such as the root hashes of the blocks that are public. Additionally, an API allows members of the public to make a limited number of requests and to obtain cryptographic evidence of some parts of the blockchain stats.
These blockchains can be considered as “partially decentralized”.
The difference between private and consortium blockchains
There was some confusion about how the consortium blockchain differs from a fully private blockchain system. Vitalik Buterin provides a fairly straightforward definition:
“In general, so far there has been little emphasis on the distinction between consortium blockchains and fully private blockchains, although it is important: the former provides a hybrid between the ‘low-trust’ provided by public blockchains and the ‘single highly-trusted entity’ model of private blockchains, whereas the latter can be more accurately described as a traditional centralized system with a degree of cryptographic auditability attached.”
Advantages of the consortium blockchain
Rather than allowing anyone with an Internet connection to participate in reviewing the transactional process, or having a single company in full control of the process, a consortium blockchain provides multiple defaults and distributed nodes for the process.
A consortium platform offers many of the benefits associated with private blockchains, such as the efficiency and privacy of transactions.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.