Consortium Blockchain

What Is a Consortium Blockchain?

A Consortium Blockchain is a privately owned and maintained blockchain in which a consortium exchanges information not commonly available to the public while relying on the blockchain's irreversible and transparent qualities. 

Consortium blockchains are produced and utilized by organizations or corporations who wish to take advantage of the benefits of a distributed ledger for exchanging value and information but find public, permissionless blockchains insufficient for whatever reason. 

Diving Deep Into the Concept of Consortium Blockchain

Consortium blockchains can be considered a bridge between public and private blockchains. The original and most common type is public blockchains, which include the largest cryptocurrencies, such as Bitcoin (BTC) and Ethereum (ETH). 

They are permissionless and decentralized in nature, which means that anyone can enter their networks and be an equal-rights participant if they so desire. On the other hand, corporations create private blockchains to be used only within their own business. They do not allow outside agents to access their networks and are regulated centralized.

Consortium blockchains fall somewhere in the midst of the two. They are created collaboratively by groups of businesses who desire to use a common decentralized network to which no party outside the consortium has access. 

Consortium blockchains are more decentralized than private blockchains since all organizations in the network are autonomous and can interact as equals, with no single node having the ability to impose its will on others. 

At the same time, they restrict access from outside the consortium, preserving critical company data and lowering the burden on the network caused by huge numbers of nodes that may otherwise have elected to participate.

Ultimately, the consortium blockchain tends to reach the right balance of private and public settings, resulting in greater privacy and sufficient decentralization. In addition, collaboration on a blockchain platform with partners enables them to address common difficulties cooperatively, decreasing operational costs and saving time.