Consortium blockchains
As we discussed in the previous chapter, consortium blockchains lie in between private and public blockchains, and also in the middle of the permission spectrum. In this section, we will do a case study using consortium blockchains adopted by banks.
Banks need blockchains to make money transfers faster, easier, and cheaper. The following are the limitations of a public blockchain if used for this purpose:
- Speed: Banks need to do transactions in real time, while Ethereum takes around 12 sec to confirm one transaction.
- Permission: Anyone can take part in the consensus for a public blockchain. But banks prefer to remain an authority or hire a regulatory body.
- Security: Due to the limited number of participants, proof-of-work is not secure enough.
- Privacy: Basically divided into identity privacy and data privacy, it is quite hard to maintain such privacy on a public Ethereum blockchain.
Consortium blockchains generally employ proof of authority, where there is no need for mining...
