Blog » blockchain » What is a Consortium Blockchain?
What Is a Consortium Blockchain

What is a Consortium Blockchain?

Blockchain technology has been expanding rapidly over the last few years. You might have seen some experts talk about various applications of blockchain other than just cryptocurrency. Blockchain is not just related to crypto; it is a technology that helps store and securely share data sets. Each block contains a data set that is added to the block using complex algorithms. These algorithms are called hash and provide cryptographic security to the block. Each blockchain allows participants, called nodes, to access and edit the data. Public blockchains allow anyone to become a node, while private ones define specific criteria.

Now, constituting some parts of both, there is a consortium blockchain that only some people understand so far. In this post, let’s see an answer to the question ‘what is a consortium blockchain?’

What is a Consortium Blockchain? 

As mentioned just now, there are three kinds of blockchains. One is where every action is public, and anyone can join as a node. The other one is owned by a private entity and accepts nodes only after certain criteria are met. Both these types of blockchains are more popular in the cryptocurrency sector. However, there is also a consortium blockchain between these two, broadening blockchain technology’s scope. 

When asked ‘what a consortium blockchain?’, people often confuse it with a private blockchain. Like a private chain, a consortium blockchain is privately owned but not by a single entity or individual. Instead, a group of individuals from different sectors or a group of companies owns such a chain. It also differs in functions since a consortium blockchain is used to collaborate data from multiple sources. It helps keep the flow of data secured and efficient between entities. 

Advantages and Disadvantages of Consortium Blockchain 

Even though a consortium blockchain has widened the usage of blockchain technology, there are still perks and cons attached to it. Many critics tend to analyze a consortium blockchain and provide better user insight. Some of the advantages and disadvantages associated with a consortium blockchain are: 

Advantages of Consortium Blockchain Disadvantages of Consortium Blockchain 
Since there are multiple owners from different organizations, there is no centralization or monopoly. A consortium blockchain can get corrupted if one or more owners are corrupt. 
Rule breakers are detected easily. Validation is carried out by trusted nodes only, removing the threat of a 51% assault. Launching such a blockchain is difficult since you must get more than one enterprise to agree to a communication protocol. 
There is a sharing of data amongst the consortium only, which helps build companies’ trust in one another. Upgrading the blockchain is a long and tedious task requiring every member’s permission. 
There is no transaction fee involved. There are chances of frequent disputes between the member organizations. 

Characteristics of a Consortium Blockchain

Characteristics of a Consortium Blockchain
Source / What is a consortium blockchain

A consortium blockchain is often beneficial for information transfer purposes. It is not much used for cryptocurrency creation or management. Due to its several characteristics, a consortium blockchain is considered best for collaborative purposes. Some of the characteristics that make it so useful are: 

1. Partially Decentralized 

In decentralization, it falls in the middle as there are nodes from different organizations. These nodes have an equal say in the blockchain, and a consensus is required for every transaction to pass through. With a limited number of nodes, the transactions often take less time. Also, there is no monopoly inside the blockchain regarding any decisions. 

2. More Controllable 

A public blockchain lacks the flexibility to change the data entered in a block once it’s done. Such an issue does not occur with the consortium blockchain. It can be done very easily if the consensus agrees to change certain data. 

3. Privacy of Data 

Since a consortium blockchain allows only a few nodes on the blockchain, few people get the data shared on the blockchain. Such an arrangement helps ensure that the data stored is untampered and completely secure. Only a few users have the right to access the data, and there cannot be any modification without the whole network of nodes agreeing. 

4. Faster Transactional Speed 

Since there are lesser nodes on a consortium blockchain, there is not much competition to verify a transaction. This helps in keeping the transactional speed very high. It is easier and faster to reach a consensus than a public blockchain. 

Applications of Consortium Blockchain 

Now that you understand ‘what is a consortium blockchain?’ along with the advantages of consortium blockchain, it is easier to understand how it is applicable in multiple places. These types of blockchains are only sometimes preferred in the cryptocurrency sector. Multiple other industries actively require a blockchain, and the one that already has such a great collaboration is much more preferred. This is why these are some of the industries where a consortium blockchain is useful: 

1. Finance and Banking 

Since banks require credit scores, KYC, and other information from time to time, they can come together and form a consortium. This consortium can have its data stored over one blockchain that can be accessed by all the banks. It would help understand the cases of defaulters and stay up to date with the credit score and other details. 

2. Logistics 

In the case of logistics as well, there is a requirement for multiple partners to stay in sync to keep track of the packages. All the logistics centers can form their own consortium blockchain with a smart contract that will automatically update the data at every center when a product is shipped. This will help the logistics industry a lot. 

3. Healthcare and Insurance 

Both hospitals and insurance companies have a very large data set that needs to be managed. All the hospitals and insurance companies in a region can collaborate and create a consortium blockchain to update all the records of various patients from time to time. This way, there will not be a need to keep files and other records to check a patient’s history or current health conditions. 


A detailed discussion of what is a consortium blockchain helps get a clear perspective about the same. By discussing the advantages of consortium blockchain and disadvantages of consortium blockchain, you must have understood by now how helpful it is. A consortium blockchain maximizes the economic benefits of a business by helping them partner up with other brands. Apart from cryptocurrency, many industries can benefit from blockchain technology; this is where the consortium blockchain helps. 

Popular Searches

What is Layer 1 Blockchain |  What is a DDoS Attack  |  What are Soulbound Tokens  |  Best Blockchain Bridge  |  Blockchain Peer to Peer Payments  |  Pros and Cons of Blockchain  |  What are Gas Fees | What is a Blockchain Fork  |  Types of Decentralization in Blockchain  |  Physical Layer in OSI Model  |  What is a Crypto Exchange  |  Biggest NFT Marketplace  |  What is Nonce in Blockchain  |  Types of Distributed Ledger Technology  |  Fiat Money Advantages  |  What is Whales in Crypto | Faster Payment Processing  |  What is Automated Market Maker  |  Web3.0 Games  |  Blockchain Scalability Trilemma

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top