There are various types of blockchain technology on the market now. In this blog post, we'll examine a consortium blockchain's fundamental components and explain how it operates.
A new market and business system started to grow around the blockchain as soon as it emerged as the new tech trend. Federated or Blockchain consortium is one of them.
What is a Blockchain Consortium?
- Public blockchains or open blockchains are accessible to anyone with an internet connection.
- Private blockchains generally serve an enterprise for corporate software solutions and resolve business cases.
A hybrid of the former two blockchains is the consortium blockchain, which is more of a permissioned type of distributed ledger.
A consortium blockchain's main goal is to increase cooperation in order to tackle an industry's ongoing difficulties. Consortium blockchain can be used by organisations with shared objectives to restructure workflow, transparency, and accountability. According to the Deloitte analysis, 74% of firms are choosing blockchain consortiums.
Instead of beginning from scratch, consortium blockchain allows newcomers to join the established framework and share information. With the aid of this technology, businesses may work together to find answers while reducing development costs and time. Federated blockchains are another name for consortium blockchains.
Therefore, the network is not ruled by a single entity, and all the other organisations contribute to that. It can be considered a platform where various businesses can gather and, if necessary, share information. It is a collaborative environment in which there is no room for abuse on the platform.
There are three types of blockchain consortium on the market at present.
Technology-centered: These provide solutions based on technical standards as well as reusable blockchain platforms. Furthermore, this particular blockchain industry consortium operates only to aid blockchain in gaining awareness on a global scale.
Business-centered: These usually create blockchain solutions for a particular business problem. In practice, this blockchain consortium design would concentrate on a particular blockchain use case, such as banking, supply chain management, healthcare, etc.
Dual-focused: When providing a platform or solution, they concentrate on both technology and business. So, in a way, they would provide an open-source platform appropriate for any kind of solution while also providing commercial products.
Benefits of Blockchain Consortium
There are certain benefits that you should expect from the federated blockchain.
● Cost Savings: By building on the established structures in each blockchain, solutions can be developed in a shorter amount of time with shared resources. In this way, fewer development costs are required through economies of scale. There is also no service or transaction fee for dealings within a consortium blockchain.
● Accelerate Learning: If you want to advance in the blockchain industry, you'll need complete learning support. Thus, anticipating an acceleration of learning processes would be advantageous. Many consortiums provide training and dev support. This is one of the reasons for why Finboot create MARCO, a Low-code/No-code platform designed to enable blockchain for business users, who can immediately adopt the technology without writing a single line of code by selecting one of our No-code apps.
● Sharing Risk: all businesses share the risk in the event of a new blockchain solution. There are many hazards in the industry. MARCO is a blockchain-agnostic platform, which ensures compatibility, provides flexibility and future-proofs your blockchain strategy. You can work with any combination of blockchain networks across the spectrum from private-permissioned networks to public-permissionless ecosystems.
● Build Critical Mass of Adoption: For a federated blockchain, there shouldn't be just one solution built. Achieving mass adoption would make it simple for your business to soar to new heights. Reaching the worldwide market would be difficult without mass adoption.
● Securing Relevance /Lifespan: It is very difficult to stay current in the area as technology is always evolving.
● Influencing Standards: The market predicted that Blockchain will quickly achieve interoperability. To establish yourself in a market worth a trillion dollars, you would need to influence standards.
Disadvantages of Consortium Blockchain
We also can point out a few disadvantages related with blockchain consortiums:
The Potential of Consortium and Federated Blockchains
The use of a consortium blockchain makes sense for companies looking for member-to-member operations and communication. Coordination between participants on the blockchain platform makes problem-solving simple and quicker. This can be developed by any organisation using open source platforms in accordance with the objectives they have specified. Organisations are allowed to decide on their own standards and requirements, however working with experienced blockchain developers can yield better results.
Some of the industries where a consortium blockchain could be a interesting option:
Finance and Banking
Since banks require credit scores, KYC, and other information from time to time, they can come together and form a consortium. This consortium can have its data stored over one blockchain that can be accessed by all the banks. It would help understand the cases of defaulters and stay up to date with the credit score and other details.
In the case of logistics, where it is crucial having multiple partners synced to keep track of the packages, having their own consortium blockchain with a smart contract could automatically update the data at every centre when a product is shipped.
Healthcare and Insurance
Hospitals, medical clinics and insurance companies have to manage a huge amount of data. Having a consortium blockchain for companies in the same region would allow fast and better collaboration to update these records of various patients occasionally. Meaning, no need in keeping files and other records to check a patient’s history or current health conditions.
While full interoperability between different blockchain frameworks is still a work in progress, a blockchain agnostic solution will take an organisation one step forward in that direction, allowing flexibility of usage and interaction between different ledger technologies among the applications.
Being agnostic, MARCO gives the company the freedom to choose the best blockchain technology for their needs without losing compatibility, regardless of the type of blockchain, which is perfect for everyone who wants to work with blockchain, especially those who have chosen a consortium to start with.