Difference Between Private and Consortium Blockchain

Since the inception of blockchains, this technology has evolved into different variants like public, private, and consortium blockchains. Many users and crypto enthusiasts make the mistake of believing private and consortium blockchains to be the same. This is due to the fact that they have a lot in common, including their architecture. 

However, they have some key differences that you should be aware of. This article covers an in-depth comparative analysis of private and consortium blockchains. 

Let's dive in. 

Private vs consortium blockchains: Parameters

1. Overview

On a private blockchain, a single entity or organisation is in charge of the authority to validate transactions on the network. It functions as a private network where only members of that organisation can be network users of that blockchain. 

In contrast, consortium blockchains have multiple organisations as the central authority. They have the right to validate transactions on the network. You must be a member of one of these organisations to participate in the network. These blockchains consist of the best features of both public and private blockchains. 

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2. Use cases

A private blockchain is generally used by organisations that want to take advantage of blockchain technology but do not want to expose their network to the public. 

Companies that deal with the following can use private blockchains for their benefit:

• Issues relating to supply chains
• Digital identification 
• Secure data exchanges in the healthcare sector, etc. 

Ripple and Hyperledger are two great examples in this regard. 

Consortium blockchains are used by companies that work in the same industry and need a platform to exchange information and conduct transactions. 

Their use cases are:

• Financial services
• Supply chain management
• Securely storing organisational records
• Insurance claim
• Multiparty aggression and more

A good example in this regard is Enterprise Ethereum Alliance (EEA). This network has global organisations like JP Morgan Chase Bank, Microsoft, Accenture, Vitro Technology Corporation, and many more. 

3. Decentralisation

Private blockchains do not provide true decentralisation. As there is a single entity or organisation in charge, they have the authority to take all the decisions on the network and can even override transactions if they deem fit. 

On a consortium or federated blockchain, you have a more decentralised network than a private one. This is because there are multiple organisations that take care of the network activities, and thus you will find decentralisation at every level. 

4. Immutability

Immutability is a unique feature of blockchains that makes any transaction that you put in a block to be unchangeable. Do note that neither of them offers actual immutability. 

 However, on private and consortium networks, the authorities in charge have the right to override transactions, thus negating this feature. 

However, the key difference between private and consortium blockchains on this parameter is that on a private network, one entity or organisation can override a transaction. But in the case of a consortium blockchain, there are a group of organisations at its head that have this right. 

Those looking to understand the differences between private and consortium blockchains should know that they have a lot of similarities. Both offer privacy, efficiency, security and can be easily implemented. Both of these blockchains can be quite useful for different enterprises. 

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