EXPLAINER: Understand the concept of consortium blockchain and its potential
The growth of blockchain applications appears to be increasing, despite the alleged presence of regulatory concerns surrounding the technology. A blockchain concept called consortium blockchain, which refers to an association of different organizations with a private blockchain for each platform, is believed to be able to achieve various industrial goals.
“I believe a blockchain consortium is a network of entities that come together to develop and implement blockchain technology for a purpose or industry. The goal of a blockchain consortium is to create a shared infrastructure or platform,” said Alankar Saxena, co-founder and CTO, Mudrex, a crypto investment platform, of FE Blockchain.
As it is understood, a consortium blockchain consists of features from both public and private blockchains. It is believed that the goal of a consortium blockchain is to help organizations tackle business issues around efficiency and accountability. As stated by Analytics Vidhya, a knowledge portal, a consortium blockchain can provide benefits such as data confidentiality, maintenance of rules and regulations, increase in settlement pace, removal of criminal behavior, among others. However, the portal also mentioned that a consortium blockchain has disadvantages such as time-consuming, difficulty in upgrading, among others due to its nation.
“I believe consortium blockchains are beneficial for smaller groups where participant identity can be determined. Consortium blockchains are intended to provide a solution for organizations seeking governance, efficiency and privacy within a smaller, pre-defined group,” emphasized Rajagopal Menon, Vice President, WazirX, a cryptocurrency exchange.
Insights from a survey conducted by Deloitte, an auditing firm, stated that 74% of companies have chosen to opt for blockchain-based consortium services. Furthermore, many blockchain companies aim to deliver different organizational facilities. Experts suggest that blockchains in consortia could benefit sectors such as finance and banking, logistics, supply chain, healthcare, among others. Reportedly, blockchains such as R3’s Corda, JP Morgan’s Quorum, Hyperledger, among others, have adopted consortium features.
Future predictions suggest that the growth of consortium blockchain could boost technologies such as artificial intelligence (AI) and the Internet of Things (IoT). According to Bybit Learn, an online learning platform, consortium blockchain should be considered essential to ensure the security of organizations’ customers, along with the development of a financial cost structure.
“The future of blockchain consortia is promising. As blockchain continues to develop and gain traction, consortia will play a role in shaping the direction of the industry. We can expect to see an expansion of consortia globally, promoting collaboration between organizations across borders and industries, concluded Shrikant Bhalerao, Founder and CEO, Seracle, a blockchain platform.
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