Nov 13, 2018 18:30 UTC
Nov 13, 2018 at 18:30 UTC
Without any doubt, blockchain is an innovative technology that was invented by an individual or a group under the name Satoshi Nakamoto. Satoshi invented blockchain in such a manner that was intended to expedite a decentralized yet trustless online payments ecosystem in terms of the virtual currency Bitcoin. This is something that has spawned the development of other virtual currencies and assets which utilize blockchain technology as a base to build their many platforms.
The most common types of blockchain are public, with the most famous being Ethereum vis-a-vis Bitcoin. However, Blockchain types like consortium blockchain is another interesting application of Satoshi Nakamoto’s successful blockchain implementations in real life.
The Blockchain Mechanisms
The Blockchain is a technology that can be best thought of as a ledger maintaining a record of all the economic transactions or anything of value. Blockchain’s ‘block’ element refers to the fact that groups of transactions are firstly batched to form a block, and are then combined so that it can form a chain. This is how the term blockchain was given its name. One characteristic of this technology makes it valuable as a piece of technology which is that it is tamper-resistant against the bad actors.
Once the data is batched together into blocks and added to the chain, it becomes impossible to change the data included in those blocks. This tamper-resistance nature of blockchain technology is the fact every block is a cryptographic hash of the previous block. Since more and more blocks are added to the chain, getting back to alter the data within a previous block would require to recompute the hash of that block and all blocks after it, for a bad actor. This is the task that would come at a high financial cost and still unbeatable.
The blockchain is often managed or overseen by a second-layer network of peer-to-peer electronic computing nodes. These nodes may be thought of as computers which run a specific client allowing them to connect to the blockchain. Nodes are effective computers which represent an entity or individual on a blockchain based network. Each node is authorized with a full copy of blockchain, upon joining this unique network.
These peer-to-peer computing nodes are important as they validate as well as verify all the transactions which are made on the network. Nodes which verify the transactions are referred to as ‘mining nodes’ or ‘miners.’ They secure this network by making sure that only correct transactions, as well as blocks, are included on the blockchain network. This whole process is known as reaching a consensus and consensus algorithms such as PoW, PoS, delegated PoS, PoI and more are used to help facilitate this process.
Consortium Blockchain – What is This Term?
Consortium blockchain can be perfectly understood when it is compared to their more popular counterpart – public blockchain. This type of blockchain is the one that possesses no restrictions to the access, which means that absolutely anyone who has internet access can become a participant of a public blockchain.
More particularly, anyone in the world can read data which is added on the blockchain, and also allowed to execute transactions on a public blockchain. Most importantly, there is no any restriction as to who can take part in the consensus process blockchain, which determines the entity or individual who can add a block to the blockchain. The public blockchain is thought to be highly decentralized, with the control over blockchain not bein in the hands of any single entity or individual.
Back to Consortium Blockchain…
Consortium blockchain differs from its public counterpart in that it is permissioned, thus, not just anyone with the internet access could start using consortium blockchain. Such type of blockchain could be described as being the semi-decentralized type of blockchain. Control over a consortium blockchain is not granted to any single entity, but rather a group of authorized individuals.
With Consortium Blockchain, the different consensus protocols used in blockchain are likely to differ to that of a public blockchain. Apart from anyone being able to partake in the procedure, the participants of consensus of this type of blockchain are likely to be a group of pre-approved nodes on the network. In this way, the consortium blockchain possesses the security features which are essential in public blockchain, while also allowing much control over the network.
A Few Instances of Consortium Blockchain
Consortium blockchain is usually related to using, with a group of firms collaborating to leverage this innovative technology for enhanced business processes. Instances of Consortium Blockchain include Quorum, Hyperledger, and Corda.
Quorum – This is a distributed ledger platform based on Ethereum enterprise which has been developed to offer financial industry participants with an authorized implementation of Ethereum that supports transactions as well as blockchain smart contract privacy.
Hyperledger – It’s an open source collaborative effort that has been developed with an aim of advancing the cross-industry blockchain technologies. The Linux Foundation created this with the technical goals which include: –
- For creating enterprise-grade, distributed ledger frameworks, open source, and code bases to support business transactions.
- For providing an open, neutral and community-driven infrastructure backed by technical business governance.
- For building technical communities to develop blockchain as well as shared ledger use cases, deployments, as well as field trails.
Corda – It’s an open source blockchain project which has been particularly designed for the enterprise use. Corda allows companies to build networks on blockchain which can facilitate direct B2B transactional and smart contract privacy.
Consortium Blockchain Empowers Blockchain Development
Where private blockchain has the advantage of the extreme data security, it is also slower and more wasteful due to the need for only certain verified entities to perform the activities. Public blockchain, while not as secure, in removing the need for authorized individuals, operate with significant speed and efficiency.
Consortium blockchain is a partially decentralized system that combines the beneficial attributes of both. It has the advantages of a public ledger while operating under a group’s leadership instead of a single entity which supports organizational collaboration and removes the dangers of bad actors.