Connect with us

Blockchain

What is a consortium blockchain and how does it work?

Blockchain technology is now widely used around the world in a range of different industries. But not all blockchains are the same. Instead, this type of technology has many different variations, including federated blockchains. So what is a federated blockchain and what is it used for?

How Does Blockchain Technology Work?

It’s no secret that blockchains aren’t particularly easy to understand. So, let’s quickly review the basics of blockchain technology before getting into the specifics of federated blockchains.

Although blockchains are entirely virtual, it is useful to think of them as a chain of blocks, with each block containing certain information. Information on a blockchain can be shared with a small or large number of different individuals called nodes. Public blockchains often have many nodes, while private blockchains have fewer.

Data stored on a blockchain is nearly impossible to alter or delete, as cryptography is used to protect it. Each block in the chain has its own hash, which is the product of a mathematical algorithm. The hash produced in this process represents all previous data stored in other blocks, linking the blocks together. It is this use of cryptography that makes blockchains so secure.


Due to their ability to store data securely, blockchains have become very popular in a number of different industries, with different types of blockchain being better suited for certain functions. So, let’s get into the purpose and dynamics of federated blockchains.

What is a consortium blockchain?

A consortium blockchain (also known as a federated blockchain) can sometimes be confused with a private blockchain, but the two are not the same as each other. This is because private and federated blockchains require a user’s prior authorization for access, unlike a public blockchain, which allows anyone to join. Each pre-authorized user within a federated network also has the same control as the next.

But unlike private blockchains, consortium or federated blockchains are generally not owned and used by a single group or organization. Instead, multiple organizations can exist on a single federated blockchain, allowing them to share data across the network privately and securely.

You are also unlikely to see a federated blockchain that deals with cryptocurrency. Although blockchains are generally known for their involvement in the crypto industry, some blockchains are more suited to this than others. For example, while both public and private blockchains can and are used to record cryptographic transactions, federated blockchains are more focused on data exchange and collaboration.

Like other blockchain types, a consortium blockchain always requires a consensus mechanism that all nodes can use to verify data. But federated blockchains can often provide low latency because there are fewer users and fewer nodes are needed for the consensus process. This is one of the biggest advantages of using a federated blockchain.

Although federated or consortium blockchains are nowhere near as popular as public blockchains, they are still extremely useful for a range of different businesses, such as Hyperledger. It is a collection of open source projects that provide users with the tools to build their own decentralized applications and services. With Hyperledger’s frameworks, one can get a head start in the development of his project and receive a better chance of creating a well-designed network.


Hyperledger uses something called the “Fabric Network,” which Hyperledger defines as an “authorized blockchain network” that integrates its “customers, peers, channels, and ordering service(s). Although the Fabric Network has an array of different elements, the primary purpose of its federated structure is to support different people, maintain scalability, and keep things secure.

Federated blockchains are also popular in several other industries, such as finance, banking, and healthcare, although they seem to have become most popular among companies that want to share data securely.

Consortia and federated blockchains have a lot of potential

While most well-known blockchains today are unfederated, that doesn’t mean this type of blockchain doesn’t hold a lot of promise. On the contrary, federated blockchains have already demonstrated their use in a range of industries, and we are likely to see them used more frequently in the years to come.

#consortium #blockchain #work

Click to comment

Leave a Reply

Your email address will not be published.

Trending