Clear DefinitionsConsortium Blockchain
1 min read
Pronunciation
[kuhn-sawr-tee-uhm blok-cheyn]
Analogy
A consortium blockchain is like a shared industrial facility jointly owned and operated by several competing companies. Each company has representatives who participate in management decisions, and while they may compete in the marketplace, they collaborate on maintaining the shared infrastructure according to mutually agreed rules.
Definition
A partially decentralized blockchain where consensus is controlled by a pre-selected set of nodes from different organizations, creating a system governed by multiple entities rather than a single organization or the general public.
Key Points Intro
Consortium blockchains balance collaborative governance with privacy and efficiency.
Key Points
Governed jointly by multiple organizations rather than a single entity.
Restricts read and write access to approved participants.
Operates faster and more efficiently than public blockchains.
Distributes trust across consortium members rather than concentrating it.
Example
Technical Deep Dive
Consortium blockchains implement multi-organizational governance at both the technical and operational levels. Consensus typically operates through permissioned validation where each consortium member runs one or more validator nodes, often using Byzantine Fault Tolerant algorithms like Tendermint, IBFT, or Raft that provide transaction finality without requiring mining. Access control is multi-layered, with participant organizations managing their own users while the consortium collectively governs validator node permissions. Many implementations include sophisticated privacy mechanisms such as channels (separate sub-ledgers visible only to specific participants), zero-knowledge proofs, or privacy groups to ensure that confidential business information is shared only with appropriate parties while maintaining consensus on the shared state.
Caveat
Consortium blockchains face unique governance challenges, including partnership disputes, changing membership, and balancing competing interests. The distribution of power among a limited number of identified entities creates a system more decentralized than private blockchains but still vulnerable to collusion if a majority of consortium members coordinate.
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