Consortium Blockchain
Consortium blockchain, also known as a federated blockchain or “permissioned” blockchain, is an emerging form of distributed ledger technology (DLT) that is becoming increasingly popular in the business world. A consortium blockchain is a private network where permission to access and participate in the network must be granted by its members. The consensus process for validating transactions on the network can only be reached if all parties agree to it. This type of DLT allows organizations to collaborate securely and efficiently while maintaining control over their data.
A consortium blockchain differs from public blockchains like Bitcoin, Ethereum or Litecoin in several ways:
-It does not operate on a proof-of-work system; instead, it relies upon pre-authorized nodes that are controlled by its members and cannot be accessed by outsiders without permission.
-The number of participants involved in validating transactions on the network is limited, meaning fewer malicious actors can take advantage of any vulnerabilities within the system.
-All members have equal say when it comes to making decisions about governance rules such as transaction fees or changes to existing protocols.
-Because there are fewer participants who need to reach consensus before any new blocks can be added, this type of DLT offers faster transaction times than public networks which require larger numbers of miners for validation purposes.
Overall, consortium blockchains offer many advantages over traditional systems due to their secure yet collaborative nature – allowing multiple organizations from different industries around the world to work together without having trust issues or centralized points of failure between them . Companies ranging from financial institutions and healthcare providers to supply chain management companies find great value in being able to share data securely while still taking ownership over their respective data sets—making them well suited for use cases such as identity verification processes , smart contracts , asset tracking , regulatory compliance , etc..
