A recent Gartner survey revealed that 60% of industry CIOs are considering or planning to incorporate blockchain into their existing business infrastructure. The limitless possibilities brought forward by groundbreaking technology may overwhelm many. This is why this article will focus on a specific application of the underlying architecture behind cryptocurrencies across business organizations- the Blockchain Consortium.
A Brief Outline of Blockchain
In simple terms, blockchain stores data and relevant information using a unique mechanism comprising DLT(Distributed Ledger Technology). A chain of interconnected blocks stores data linked through hash algorithms. The addition of cryptographic protocols increases security across the process fortifying the data by adding features such as immutability and transparency. The data is shared and copied across the entire blockchain network making the technology an integral component of the current global digital transformation.
Blockchain technology can be broadly categorized into Public and Private blockchains. There is also a third type which we will be discussing in this article- the Hybrid or Consortium blockchain.
What is a Consortium Blockchain?
A consortium blockchain combines the features of public and private blockchains allowing users to reap the merits of both. For starters, public blockchains are accessible by anyone with a stable internet connection. Meanwhile, private blockchains are commonly used as enterprise software solutions for business resolution. Access to the ledger is restricted.
Consortium blockchains accelerate coordination and collaboration efforts to address industry-specific challenges. Enterprises with similar objectives join forces for enhancing inter-organizational workflow, transparency, and accountability.
Advantages of a Blockchain Consortium
Deloitte reports that 74% of organizations are currently choosing blockchain consortiums for increasing operational efficiency and data transmission. Blockchain development companies are offering their expertise in building a platform for enterprises, ensuring transparent access to data to all member organizations, including the newest addition.
A blockchain consortium offers the following benefits to its stakeholders:
Node members across a consortium network are acknowledged and verified by each other. The identification of protocol violators is swift. The network is also immune to DDoS, SQL injection, and several other security threats.
Centralization is not common across blockchain consortiums. Rather, a group of original participants controls the blockchain network, undertaking activities such as setting rules, balance amendments, editing, or discarding incorrect transactions with consensus approval from each member.
c) Energy Sustainability
There are no transaction fees across the blockchain consortium. In addition, energy is necessary for routine operations. The Proof-of-Vote consensus is also energy efficient.
Consortium blockchain data is inaccessible to the general public but can be easily viewed by its network members. This leads to improved trust and confidence.
Limited network participants eliminate potential consensus and synchronization issues. This is common in areas where the participation of multiple validators is necessary.
Industrial Use-Cases of Blockchain Consortium
Multiple industries use consortium blockchains.
Popular areas of blockchain implementation include:
a) Logistics and SCM
The logistics sector combines complex organization and operations managing product flow from source to destination. Consortium blockchain offers efficient solutions featuring provenance, traceability, real-time tracking, and recordkeeping.
b) Insurance and Healthcare
Insurance companies and healthcare organizations(hospitals, nursing homes, and treatment centers) are adapting to the consortium blockchain network. The blockchain helps them in sharing confidential patient information and accelerating processes to reward claim benefits to policyholders.
Deloitte studies indicate banking and finance sectors are ideal for the implementation of consortium blockchains. The blockchain network can help financial organizations in establishing a shared database that shares creditor profiles, ACH solutions, and more.
Optimizing your Business With Consortium Blockchain
Consortium blockchains incorporate the best features from both public and private blockchains to deliver an architecture that imbibes privacy, security as well as effective decentralization. The network platform facilitates cooperation between stakeholding partners leading to better problem-solving and considerable savings in operational costs and time. Consortium blockchains are scalable empowering organizations with better speed and automation as well. Blockchain development companies are building consortia for mineral tracing, diamond industries as well as digital media supply chains.
Consortium blockchains have already gained global recognition for their abilities to generate economic advantages for business organizations. The architecture improves operational workflow between stakeholders through better sharing of information and communication. Banking, supply chain/logistics, healthcare, and insurance may be the primary sectors adapting to blockchain technology, but the possibilities are limitless owing to blockchain’s effortless capability of validating and sharing information among node members.