Public blockchains are available to anyone connected to the internet. Using private blockchains, individuals and organizations can securely store their confidential information under the control of trusted individuals. A consortium blockchain network is a combination of these two blockchains, which is more of a private distributed ledger and consists of multiple entities or equal powers that validate data.
The rules of a consortium blockchain network are flexible and can allow access to data to a specific group of validators or specific individuals. If the validators reach a consensus, changes can be easily implemented. For this system to work better, it is better for a certain number of validators to behave honestly so that the system does not encounter any particular problem.
The main goal of a consortium blockchain network is to increase the level of cooperation to face the constant challenges of a specific industry. Organizations that have common goals and work together in the same industry. To transfer transactions or transfer information, using a consortium blockchain network can be a professional choice. Joining a consortium can be beneficial for any organization because it allows them to share their industry insights with other entities and benefit from their experiences.
How does a consortium blockchain network work?
The consensus-building methods in a consortium blockchain network are managed by pre-determined nodes. Although the blockchain is not publicly accessible, it is still decentralized in nature. In fact, the blockchain is managed by more than one organization, so no single authority fully controls it. To ensure its operation, the consortium blockchain network has a validator node that verifies transactions, initiates or receives transactions. In contrast, member nodes can only receive or initiate transactions.
Ultimately, a consortium blockchain network has all the features of a private blockchain network, such as transparency, privacy, and efficiency, but no single authority controls its affairs.
What are the advantages and disadvantages of a consortium blockchain for organizations?
Advantages
1. The consortium network is controlled by individuals, but there is no single authority. Members can define their own rules, correct or cancel erroneous transactions. They can also take other actions to foster beneficial cooperation for companies that have a common goal, provided that all members agree.
2. Validation is performed by members and nodes, which eliminates the risk of a “51% attack.” People who break the rules on the network are easily identified and lose more than they can gain.
3. Since the information of authenticated blocks is not visible to the general public. This feature is very important for users of the consortium blockchain network. In general, the consortium has a higher level of privacy. As a result, customers have more trust and confidence in this platform.
4. Compared to public blockchains, transactions on the consortium blockchain network have no fees.
What are the disadvantages of the consortium blockchain network?
1. The consortium blockchain may be vulnerable to profit-seeking individuals due to its centralized form. If the number of members is small, you can identify a corrupt person.
2. Launching a new consortium blockchain network is a sensitive process and all members must approve the protocol. For this reason, creating a joint network between several companies is very slow.
3. Upgrading the protocol on the consortium blockchain network is a bit difficult and the number of organizations may be larger than the start and it takes time to set up.
4. Companies often do not cooperate and hinder the development of this area.
5. The consortium blockchain network is still being evaluated and the effectiveness and usefulness of this model has not yet been determined.
Superior Features of Consortium Blockchain
It is somewhat decentralized, unlike public blockchain networks, consortium blockchain is owned only by the members of the network who have access to it. Consensus is easier to achieve because the number of nodes in the chain of this network is very limited. The consortium blockchain network acts as a semi-centralized system that helps maintain data confidentiality.
Controllability, in public blockchains when data is entered. There is no possibility of tampering or changing the data because the number of nodes in the public blockchain is large. But in the consortium blockchain network, the data can be changed until all the members reach consensus.
Data privacy, access to data in the consortium blockchain is only with the users, which is why data privacy is maintained. This feature assures users that the data is stored without tampering and safely.
Increased transaction speed, since there are fewer nodes involved in this network compared to public and private blockchain networks, transactions are completed faster. Therefore, it is easy to reach consensus and the transaction is completed much faster.
