As we discussed in the previous chapter, consortium blockchains lie in between private and public blockchains, and also in the middle of the permission spectrum. In this section, we will do a case study using consortium blockchains adopted by banks.
Banks need blockchains to make money transfers faster, easier, and cheaper. The following are the limitations of a public blockchain if used for this purpose:
- Speed: Banks need to do transactions in real time, while Ethereum takes around 12 sec to confirm one transaction.
- Permission: Anyone can take part in the consensus for a public blockchain. But banks prefer to remain an authority or hire a regulatory body.
- Security: Due to the limited number of participants, proof-of-work is not secure enough.
- Privacy: Basically divided into identity privacy and data privacy, it is quite hard to maintain such privacy on a public Ethereum blockchain.
Consortium blockchains generally employ proof of authority, where there is no need for mining...