Everything You Need to Know About Consortium Blockchain

Everything You Need to Know About Consortium Blockchain

Blockchain technology, originally linked with anti-bank and anti-corporation sentiment, has evolved to offer universal value. Initially, it appeared as a challenge to traditional financial institutions, but now, even these entities are finding ways to benefit from it. A prime example is Ripple, a remittance platform using a consortium blockchain, which has become a significant player in offering blockchain solutions to financial institutions.

Consortium blockchains, used by groups of corporations, manage data and resources with restricted access, offering a streamlined and cost-effective approach for various industries. This blockchain variant, balancing between private and public blockchains, is rapidly gaining traction due to its efficiency and security in handling data.

At the core of blockchain technology is the concept of a decentralized ledger that records digital assets or transactions without third-party involvement. This tech enhances the speed and accuracy of information transfer, which is crucial for business operations. It's known for its quick, authentic data sharing through an immutable ledger, accessible only to permissioned network members.

Expanding beyond cryptocurrencies like Bitcoin, blockchain technology is increasingly recognized for its potential in secure data storage and sharing. Each block in a blockchain contains data sets, secured with complex algorithms (hashes), providing cryptographic security. Public blockchains allow open access, while private ones have specific access criteria.

In essence, blockchain is a chain of blocks storing data, interconnected using hash algorithms and fortified with cryptographic protocols. This makes altering or deleting information virtually impossible. While closely associated with cryptocurrencies, blockchain's applications extend far beyond, offering significant advancements in digital transaction technology and still evolving rapidly.

What Is Consortium Blockchain?

Consortium blockchains represent a unique blend of public and private blockchain characteristics, offering a balanced solution for multiple organizations to collaborate efficiently. These blockchains are managed by a group of organizations or entities, rather than a single central authority. Access to a consortium blockchain is permission-based, requiring authorization for users to join and engage with the network.

The essence of consortium blockchains lies in their ability to facilitate secure and efficient data exchange between different entities, which are not readily available to the general public. This type of blockchain typically has fewer nodes compared to public blockchains, enhancing its security and scalability. While consortium blockchains are less transparent than public blockchains, they still provide significant control and faster processing.

In contrast to public blockchains like Bitcoin and Ethereum, which are permissionless and decentralized, consortium blockchains are semi-decentralized. They are not controlled by a single entity but are instead governed by a group of individuals or entities from various sectors. This setup allows for greater innovation and exposure, as each node in the network can write transactions but cannot add a block independently. Every block added must be verified by other nodes, ensuring robust network security and efficiency.

A consortium blockchain's decentralized yet exclusive access makes it ideal for industries where multiple organizations need to operate on a single platform while maintaining control over their data and transactions. The network's transaction verification and maintenance are distributed among the participating groups, striking a balance between decentralization and control. This makes consortium blockchains suitable for scenarios where known, trustworthy parties need to collaborate.

Furthermore, consortium blockchains offer an advantageous entry point for new members to join established structures and share information without starting from scratch. This approach not only saves time and development costs but also fosters cooperation to meet industry-specific challenges. According to Deloitte research, a significant percentage of organizations are moving towards blockchain consortiums to enhance transparency, accountability, and workflow.

In summary, consortium blockchains, also known as federated blockchains, provide a secure and efficient platform for collaborative data management, making them a robust solution for organizations aiming for growth and profit maximization in a controlled yet decentralized environment.

Pros and Cons of Consortium Blockchain

Consortium blockchains, a distinct form of blockchain technology, present a blend of advantages and challenges, combining attributes of both public and private blockchains.


  • Speed and Efficiency: With fewer nodes than public blockchains, consortium blockchains offer faster transaction validation.
  • Scalability and Security: Less susceptibility to scalability issues, they manage large volumes effectively while maintaining strong security due to restricted access.
  • Cost-Effectiveness: Collective distribution of resources and financial contributions among participating companies reduces individual costs.
  • Collaboration and Control: These blockchains foster smoother collaboration among corporations and offer control to participants to define rules, amend balances, and rectify erroneous transactions.
  • Privacy and Trust: With validation carried out by known and trusted members, consortium blockchains ensure a higher level of privacy and trust among platform clients.
  • Flexibility in Governance: They provide more effective governance adjustments and easier consensus-reaching among a smaller group of participants.
  • Energy Efficiency: Proof-of-vote agreements and nonessential data mining reduce energy requirements.


  • Centralization Risks: While consortium blockchains are less decentralized, centralization risks arise if corrupt entities are part of the consortium.
  • Complex Implementation: Launching a consortium blockchain is complex, requiring agreement among multiple enterprises on communication protocols.
  • Protocol Upgradation: As the number of participants grows, upgrading the blockchain becomes a challenging and time-consuming process.
  • Limited Adoption: Restricted access results in narrower adoption and recognition compared to public blockchains.
  • Potential for Conflict: The possibility of disputes between member organizations can hinder the development of the consortium blockchain.
  • Unproven Effectiveness: The overall efficiency and effectiveness of consortium blockchain technology remain to be fully established.
  • Framework Limitations: Unlike private blockchains, consortium blockchains lack a unified framework, posing challenges in standardization and cooperation among participants.

In conclusion, consortium blockchains offer a viable solution for secure collaboration among corporations with common goals, although they come with their own set of challenges that require careful consideration and management.

Consortium Blockchain Examples

Consortium blockchains are increasingly being utilized across a variety of industries, demonstrating their versatility and practical applicability.

One notable instance is Ripple, a platform that enhances the efficiency of cross-border transactions and real-time gross settlement. Ripple’s native token, XRP, has gained prominence in the cryptocurrency market, and the platform is used by major financial institutions like Bank of America, PNC Bank, Santander, American Express, SBI Remit, and Banco Rendimento.

Hyperledger, launched by the Linux Foundation in 2015, is another significant example. It collaborates with various companies to develop blockchain and distributed ledger technologies for industries such as fintech and supply chains. Hyperledger has attracted contributions from Intel, Digital Asset, and Blockstream, and is utilized by companies like Cisco, Fujitsu, Hitachi, IBM, JP Morgan, SWIFT, and Wells Fargo.

The Energy Web Foundation (EWF) also leverages consortium blockchain technology to offer solutions for the global energy sector, focusing on performance enhancement, clean energy, inter-company cooperation, stakeholder data security, and cost reduction.

Additionally, there are platforms like Multichain and FISCO BCOS. Multichain is known for creating private blockchains with customizable features, mainly targeting private sector needs. FISCO BCOS, on the other hand, is designed for financial services, offering an efficient consensus mechanism and secure smart contracts.

Other prominent consortium blockchains include R3 Corda, which facilitates seamless operations and communication among financial institutions, and Hyperledger Fabric from the Linux Foundation, offering a modular architecture for various sectors. J.P. Morgan’s Quorum, an Ethereum-based platform, is geared towards enabling smart contracts and private transactions in finance, supply chain, and healthcare sectors.

These examples illustrate the growing adoption of consortium blockchains in different fields, highlighting their potential to revolutionize various industry processes through enhanced security, efficiency, and collaboration.

Examples of Industries deploying Consortium Blockchain

Consortium blockchain technology, with its advanced features, is being implemented across various sectors, offering a range of applications that enhance efficiency, security, and collaboration.

  1. Healthcare: In healthcare, consortium blockchains enable secure sharing of patient data among hospitals, clinics, and insurers. This leads to reduced errors, streamlined administrative processes, and improved patient care. The technology also facilitates research by aggregating anonymized patient data for analysis.
  1. Finance: The finance sector benefits significantly from consortium blockchains in trade finance, transfers, and cross-border payments. Banks and financial institutions on the network can instantly share information, thereby reducing transaction times and costs. This also helps in combating financial fraud and ensuring regulatory compliance.
  1. Identity Verification: In identity verification, consortium blockchains offer a secure way for entities like banks, government agencies, and credit bureaus to exchange identity and credit information, reducing identity theft and fraud.
  1. Real Estate: Real estate transactions, including buying, selling, and leasing properties, are streamlined through consortium blockchains. Real estate agents, property managers, and title companies can collaboratively manage property data, reducing fraud and increasing transparency.
  1. Supply Chain Management: Consortium blockchains optimize supply chain management by allowing manufacturers, distributors, retailers, and logistics companies to track the movement of goods and ensure authenticity and compliance.
  1. Government Services: Governments can utilize consortium blockchains for services like voting, licensing, and permit approvals, ensuring secure and transparent processes.
  1. Intellectual Property Management: Managing IP rights, including patents, copyrights, and trademarks, is made efficient with consortium blockchains. Inventors, companies, and licensing agencies can manage and transfer IP assets securely.
  1. Energy Management: In the energy sector, consortium blockchains aid in managing energy distribution and consumption, involving stakeholders like energy producers, grid operators, and consumers. This leads to improved energy efficiency and transparency.
  1. Gaming Industry: The gaming industry uses consortium blockchains to manage in-game assets and transactions. Developers and publishers can collaboratively manage virtual currencies, items, and characters, enhancing in-game economy and user experience.

In summary, consortium blockchains are revolutionizing industries by providing secure, transparent, and efficient platforms for data management and collaboration, fostering innovation and streamlining operations across sectors.

Please note that Plisio also offers you:

Create Crypto Invoices in 2 Clicks and Accept Crypto Donations

12 integrations

6 libraries for the most popular programming languages

19 cryptocurrencies and 12 blockchains

Ready to Get Started?

Create an account and start accepting payments – no contracts or KYC required. Or, contact us to design a custom package for your business.

Make first step

Always know what you pay

Integrated per-transaction pricing with no hidden fees

Start your integration

Set up Plisio swiftly in just 10 minutes.