INTRODUCTION. Most of the cryptocurrency bitcoin, where as an example. The an increasingly valuable crypto. An Interoperable Blockchain vs. Consortium Blockchain Sidechain Technology Promoted. Blockchain vs. Federated a core component of owned and have value. - IOPscience This is Public Blockchain vs. Consortium A consortium or federated. Apr 08, · The Ripple bl o ckchain pioneered the Federated Byzantine Agreement (FBA) consensus mechanism. The Stellar blockchain refined this approach even further, adopting the first provably safe FBA protocol. In FBA systems, each node does not have to be known and verified ahead of time, membership is open, and control is decentralized. Apr 15, · Bitcoin is an open source project which makes use of distributed ledger technology to distribute the authoritarian power among the peers, and thus decentralization plays a major part.
Bitcoin is an example of federated blockchainIs Ripple A Federated Blockchain? | BTC Wires
So, why not just use a typical blockchain platform? Well, the problem is with confidentiality. Many consumers do not want their documentation of billing to get put in front of the public eye. But what about private blockchain? On the other hand, if one company buys goods from another, the process can get much more comfortable if they work in a single network. This is how they can all track and manage the supply chain without any third party invasion. Supply chain management can be one of the best use cases of consortium blockchain so far.
Use cases like these are much in need regarding big enterprises. Security breaches are no longer a rare event. Almost every multinational company has to deal with this mess one way or another. Also, the costing of maintaining the level of security needed is tremendously high.
Even so, many companies are not able to deal with the problem. Blockchain does provide an excellent solution to deal with it, as the network has a great load of security. However, the again we come to the issue with the privacy. Well, if they work with federated blockchain, they can surely achieve the level of security without any hassles.
Federated blockchain examples are much secure that private blockchains and they provide privacy along with it. The best part is that the costing for keeping all their data here would cost them much less than a separate database. Also, as only a handful of nodes will have access to the network no one can actually exploit the documents without alerting others.
This is how you get both security and decentralized system at the same time. The trade wars are really becoming intense by the day. Banks are now looking for a solution that can streamline the transactions even easier than before. The paper documentation and hacks are making them an unpopular option. To get ahead of their banks are coming together to make the trade finance great again.
Well, with innovations in technology these organizations are having a hard time dealing with security loopholes. Not only that but also the demand for faster and better output from consumers are starting to pile up. So, without risking the assets anymore, they are teaming up to streamline the process. This is just the start of the many consortium projects. Now we have seven leading blockchain consortium examples in our midst. In this project Voltron, twelve banks are coming together under the same network.
Banks are too eager to make the change. The platform they are using is Corda and using the decentralized nature to create their federated platform. Voltron can cut down the manual process of paperwork to only one day. Something worth looking for. This is yet another collaboration of R3. This time they are collaborating with TradeIX and currently have ten financial organizations under them. The TIX core is another open distributed ledger technology. The main reason for this consortium is to streamline the process of tracking any kind of payments and ensure the security of the receivable discounting.
Batavia is powered through IBM. IBM powers Batavia. Batavia wants to make broader blockchain applications such as utilizing smart contracts in every financial aspect.
These blockchain consortium examples will ensure cross-border trading and will be able to track the transactions too. They consist of a total of eight banks. They are mainly targeted towards Europe and offers an invoice factoring. Utilizing smart contracts, they can factorize much faster than average. They are utilizing technology from Ping an Group. Reportedly they have 21 banks on their side, but we only know a few names at this point. Together they want to digitize the supply chain management and keep all the records of trading securely in the platform.
The contaminated food each year burdens the world with illness, waste and economic outbreaks. To deal with these situations, ten organizations are coming together. Well, this project is powered by R3. In this project B3i, thirteen banks are coming together under the same network. Insurance companies want to streamline their services and ensure better satisfaction from their consumers.
Federated blockchain can change the ways of blockchain applications in a good way. This new technology has bets of both worlds. With the added level of security and flexibility, this technology can develop a healthier environment for corporations. Even though they run under a pre-defined group, no one has access to modify the blocks once anyone adds them to the ledger system.
Also, the process of streamlining any process of the organization will result in a faster output. Organizations now will be able to exchange information smoothly without any security breaches. And consumers will benefit significantly in the long run. People should come forward to get rid of all the flaws to get a much safer network hub everyone needs. Every blockchain technology has their fair share of benefits and flaws.
So, relying on only one type would be an absurd move. However, when you are dealing with privacy, security, and control choosing the federated blockchain would render the best output.
So, can blockchain consortiums change the ways how our enterprises work? Well, that is something we need to wait and see.
An engineer, a gadget-freak, and a perfection fanatic — the ideal combination of a tech-nerd! This Enterprise Blockchain Analyst seems to have an unfathomable interest in blockchains, which makes him perfect for sharing his new discoveries on Blockchains.
This site uses Akismet to reduce spam. Learn how your comment data is processed. CoinSutra was started in with the mission to educate the world about Bitcoin and Blockchain applications. Public Blockchain Private Blockchain Consortium or Federated Blockchain There are some more complicated types also such as public-permissioned blockchain, private-permissioned blockchain etc but I will keep it simple for this discussion.
Example: Bitcoin, Litecoin etc On Bitcoin and Litecoin blockchain networks anyone can do the following things that make it truly public blockchain.
Consortium or Federated Blockchain This type of blockchain tries to remove the sole autonomy which gets vested in just one entity by using private blockchains. They are cost effective and fast. They reduce the need for more trusted parties because you can implement smart contracts instead of them. Gives options for rights and access management while leveraging the same blockchain technology and reaping its benefits.
Reduces redundant work. Distributed consensus between interested parties becomes fast even though you are geographically segregated. Harsh Agrawal. An international speaker and author who loves blockchain and crypto world. Join us via email and social channels to get the latest updates straight to your inbox. Related Posts. Show Hide 5 comments. Leave a Comment Cancel Reply Your email address will not be published.
Subscribe to stay updated. Let Me in. Quick Links. The token is an essential mechanism component to make this network of untrusted actors attack-resistant. Private and permissioned ledgers, on the other hand, have a federated setup with bilateral contractual agreements.
The network is not accessible to arbitrary participants. Members trust each other because they have bilateral contractual agreements with each other, and if anything goes wrong, they know who to sue. Permissioned ledgers therefore do not need a token to incentivize coordinated action, whereas it is integral to permissionless networks. They also provide more privacy than current state of the art public blockchains.
Permissioned ledgers are mostly used by industry consortia. Transaction verification is conducted by a pre-selected set of participants, for example sixty financial institutions, each of which operates a node, and where forty must sign every block in order for the block to be valid. Depending on the industry and use case, the right to read data of the ledger may be public, partially public, or restricted to the participants. While most blockchain literature makes a binary distinction between permissioned and permissionless, I would like to argue that there is no such thing as percent permissionless.
Every consensus mechanism requires a minimum threshold of investment that one needs to make in order to be able to validate transactions or write to the ledger. Most of the world population does not have the economic means to purchase a specialized hardware powerful enough to mine Bitcoin.
Even for a full node that only validates transactions in a public blockchain, and does not require the same level of hardware investment as a mining node, one would need to invest into a regular PC. At the time of writing this book, buying a PC means that one would have to spend at least a few hundred EUR13 to validate transactions. Not to mention the costs needed for a mining computer. The consensus mechanism requires you to own a minimum amount of network tokens to be eligible to validate transactions.
In such an early stage of blockchain technology, permissioned solutions can be useful in highly regulated industries that want to build on a distributed ledger, but are subject to government regulation. Industry advocates claim that federated solutions can provide higher levels of efficiency, security, and fraud problems of traditional financial institutions. It might also be a stepstone into a wider adoption of public and permissionless blockchain infrastructure, once the underlying technology becomes more scalable and mature, better understood by regulators, and people develop more know-how and trust.
It is unclear how the technology will pan out in the medium-to-long run. Some predict that permissioned ledgers might suffer the fate of Intranets in the early s, when private companies built their own private networks, because they were afraid to connect with the public Internet. Over time, this fear disappeared. Today, Intranets are used in very limited cases where high levels of security are required.
Download our Blockchain Handbook! In addition to her studies at the Vienna University of Economics, she studied film and drama in Madrid.
She is Austrian, with Iranian roots, and lives between Vienna and Berlin. About the Book : The book builds on the premise that cryptographic tokens, as an application of Blockchain and derived technologies, might be as revolutionary as the emergence of the WWW as an application of the Internet.
The book introduces a token taxonomy from an economic and governance perspective and deep-dives into selected use cases stable tokens, asset tokens, social media tokens Steemit , attention tokens BAT , token curated registries TCRs , purpose-driven tokens like CO2 tokens , and other aspects like token sales, token exchanges and atomic swaps.
The goal of this book is to give a degree view of the inner workings of the state of blockchain in the context of the Web3, discuss the socio-political implications. The research questions that need to be resolved are: How do we reach consensus on one version of history that the majority accepts as true?
What is the economic incentive to collaborate? What are the payoff mechanisms economic incentives to make sure everyone keeps the system intact? How can one align scarce natural resources like electricity and CPU with network resources to prevent malicious actors from spamming the system with bad behaviour? Where does security come from? What are security risks and attack vectors?