What is consortium blockchain?

A consortium blockchain, also known as a federated blockchain, is a type of blockchain technology which is governed by multiple organisations, as opposed to a single entity as seen in private blockchains. It is permissioned, which means only organisation members with access can be on the network. Despite this, it is a partially decentralised network as decision-making power lies with more than one organisation. 

This type of blockchain platform was introduced to enable collaboration between enterprises. It allows for smooth and secure data sharing between entities and helps them work together to solve business issues. 

Key features of consortium blockchains

  • Permissioned

The network is not open to anyone, but only to a predetermined group of organisations. Permission and access are required to be given to the members of these organisations to be a part of the network.

  • Partially decentralised 

A consortium blockchain, despite being permissioned in nature offers some degree of decentralisation as there are multiple enterprises involved who have equal say and are involved in the consensus process.  

  • Faster transactional speed

Transactions are completed at a much faster speed as the number of nodes involved in the validation process is very few. Thus consensus is reached much quicker, making transaction speed high.

  • Data privacy

Only a few users have access to a consortium network, which helps maintain the privacy of data. This helps ensure the data stored on the network is secure and untampered as modifications cannot be made unless it has been approved by all the nodes. 

  • More controllable

Data stored in a consortium blockchain can be modified if needed after consensus is reached among the institutions to do so. it is a more flexible and controllable blockchain platform.

Consortium blockchain advantages and disadvantages 


  • No monopoly

The presence of multiple owners from various organisations helps ensure there is no centralisation or monopoly in a consortium. The power to make decisions does not lie with one entity.

  • Low-cost

Low transaction fees are provided to the users in a consortium blockchain network. This fee remains the same regardless of the number of users, unlike a public blockchain where more users can lead to higher transaction costs. 

  • More scalable 

There are a controlled number of nodes involved in the validation process making it easier and quicker to reach a consensus and expedite transactions. This makes it easy to scale as transaction speed is high. 


  • Difficult to launch

Setting up a new consortium blockchain is a tedious and delicate process. It requires setting up a common network between several organisations which is a sluggish process since all participants have to approve the protocol for communication. 

  • Lack of cooperation

Since there is more than one enterprise involved, there are higher chances of disputes arising among the members to reach an agreement.

  • Slow upgradation

Upgrading the blockchain system is a long process as the number of participants may be more than that at the start, therefore regulations and permissions take time.

Consortium vs private blockchain: How are they different?

People often confuse a consortium blockchain with a private blockchain. This is understandable as they can be similar in many ways, but they do have some key differences. Here is a table to help you get a clearer picture of the two blockchains and understand how they compare. 

Consortium blockchain use cases

  • Logistics 

Logistics is a complex operation that involves the movement of articles from origin to destination. There are multiple participants in this supply chain network, therefore a consortium blockchain makes this process easy as it allows all participants to be on one network. It helps track and identify these articles throughout the supply chain journey. 

  • Finance and banking 

The finance and banking industry deal with trading assets which includes KYC. All banks come together and store their data in one place using a consortium network. Whenever a bank requires information to asses and authenticate a consumer, it can access this from the distributed ledger. 

  • Healthcare and insurance

Health insurance is a security many people opt for these days. This insurance is claimable when a person spends at a hospital. Therefore hospitals and insurance companies join consortiums to make this process faster and smoother. 

Consortium blockchain examples 

  • Corda

It is an open-source platform designed to solve real business problems. It is a permissioned distributed ledger technology (DLT) that is regulatory-compliant, that was built to cater to the financial services industry.

  • Quorum

JP Morgan founded this open-source platform. It provides an implementation of Ethereum designed for enterprise blockchain networks. 

Future of consortium blockchains

The consortium blockchain provides benefits of both, public and private blockchains due to its increased privacy and partial decentralisation. It is most suitable for organisations that need this mix of public and private. It ensures easy collaboration between partners on the network and allows them to work towards common goals together while reducing operational costs and saving time.

Any organisation can create this type of network by using an industry-appropriate open-source platform and setting goals. The use of federated blockchains is very likely to increase in the future, therefore it is important to learn more and understand how your organisation could use this blockchain to its benefit. 

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