A consortium blockchain is a permissioned ledger where information can only be shared with a small group of members. A few select nodes also govern the federated ledger.
The difference with a Private Blockchain
The consortium blockchain differs from a private one because the former offers decentralization which is absent in private ledgers. This allowance means any member of the multiple organizations can join the blockchain and access information since the decision on how the consortium operates is determined by connected nodes.
The idea of a consortium blockchain was to allow enterprises to quickly collaborate without spending too much on transaction fees while also keeping information private.
What Are the Key Features of a Consortium Blockchain?
The consortium blockchain offers elements of decentralization while remaining private. This ledger is designed to foster collaboration and takes advantage of features that are realized from the blockchain setup, including faster transaction processing speeds boosting user experience, higher scalability since the number of validating nodes is controlled, and low transaction costs, which will be maintained at certain levels regardless of the number of connecting users sourced from multiple collaborating organizations. Consortium blockchains are also differentiated by low energy consumption. For economic reasons, the consensus algorithm adopted is permanently aligned for energy efficiency, which keeps operational costs down. More importantly, consortium blockchains are known for being relatively secure without risks of majority attacks or DDoS attacks since participating organizations have a high degree of transparency.