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How do Private and Consortium blockchains work?

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Although a majority of people feel that blockchain technology is monolithic in nature however instead the blockchain systems function with a variety of variations. The primary variations occur in the consensus mechanism utilised by a particular blockchain. There are various consensus mechanisms operating in the ecosystem. However this article will focus on how the “Private and Consortium” blockchains work.

Private/Consortium blockchain

The blockchain networks that use “POW” and “POS” consensus mechanism mostly focus on being public and decentralised which are the major identification signs of a blockchain network. However there are a series of blockchain networks operating in the ecosystem which are consortium or private blockchain in nature.

The private blockchain directly hands over the control to a specific private entity which regulates the interaction on the network. Such a private entity is the major authority who will focus on verifying transactions and approving such transactions in the ecosystem. However the entire private blockchain has a centralised entity which controls the network.

In layman terms the consortium blockchain is a distributed ledger wherein the control lies with several specific private individuals in the market. These private entities function in a manner wherein they can control the nodes, ensure their participation in the consensus and gain permissions to view any of the data on the network. Due to the omission of decentralisation in the network such consortium blockchain networks are referred to as a DLT also known as a distributed ledger technology operating in the markets.

Use cases of Private blockchain

A Private blockchain is mostly employed by any private organisation which plans to curate a specific type of digital architecture for their employees with the primary focus being on digitisation. However many times these organisations want their data to be secret on the network but also want to avail the efficiency of the blockchain network. Thus the use cases of Private blockchain networks mostly focus on private financial solutions.


If we look at a private blockchain network it is more efficient in nature wherein they offer swift transactions speed on their network.