Blockchain Technology is advancing to a new level now. Based on the permission requirement, blockchain has been divided into three categories namely, Public Blockchain, Private Blockchain, and Consortium Blockchain. Public Blockchain as we know is BitCoin based blockchain having features such as immutable data, anonymous participants, and decentralized P2P network. For example of a private blockchain, any Hyperledger Fabric based project is a private blockchain. Here, all the features of public blockchain are applied except one which is permission to join the network. A set of rules are decided to join the decentralized system, or all of the participants decide who can join the network. Next is consortium blockchain which is explained below:
What Is A Consortium Blockchain Development?
A consortium blockchain like private blockchain requires permission to join the network from a group of participants, but here the catch is the group of participants not only control who enters the system but also control the consensus process of the blockchain. The consensus in simple words means approval to add a block of information in the blockchain. This approval in public blockchain is performed by every participant who joins the network, the same goes for private blockchain as well, but consortium blockchain development loses this vital feature of blockchain technology. Hedera Hashgraph based blockchain projects are known as consortium blockchain.
The open network turned into a private network is understandable as it’s necessary for the organizational use, but the consensus feature controlled by some decided participants steals the idea of blockchain technology being invented. Blockchain technology came into existence to provide immutability of data and decentralization of power to monitor the same data. To understand more why consortium blockchain is nothing but a controlled immutable ledger, we will study its pros and cons:
Advantages Of Consortium Blockchain
- Unlike the legacy system where the cost of keeping data secure was high and affected profits at some levels in an organization, consortium blockchain reduces that transaction costs to a great extent.
- The outdated legacy system of keeping information is replaced by consortium blockchain.
Disadvantages Of Consortium Blockchain
- As mentioned earlier, consortium blockchain loses decentralized consensus process and hand over the power to store and approve information sharing to the leaders chosen.
- This control of the consensus process can encourage data manipulation despite leaders of consortium blockchain being anonymous. Anonymity can be broken if few participants decide to manipulate the entire blockchain for personal gains.
- Moreover, the consensus is required only for 51% or more participants in consortium blockchain development, so for example, if 8 or more participants of consensus process out of 15 decides to manipulate or adds misleading information in the chain, they can risk the whole system by joining computing powers.
Now if you have noticed, consortium blockchain does not serve the purpose of blockchain technology which is to provide a decentralization of information sharing and is a ledger controlled by few participants rather than all. But for organizational use, enterprise blockchain development through hyperledger projects can solve an organization’s or industry’s information sharing problems to a great extent.
We hope you have found this article informative and interesting. To get more information, connect with our ICO Development experts! You can also write us at email@example.com