ConsenSys Quorum Blockchain: A Comprehensive Review

Overview

The financial industry is considered the first to be disrupted Blockchain technology, and ConsenSys Quorum Blockchain seems to be the culprit. However, we need to understand that emerging technologies often experience slow adoption. The primary reason is that organizations seek to better understand the technology and how to use it better.

ConsenSys is a Blockchain software technology founded in 2014 by the co-founder of Ethereum Joseph Lubin. It develops decentralized applications and other infrastructure for the Ethereum Blockchain. Some of the applications created by ConsenSys include Metamask, uPort, Gnosis, etc.

J.P. Morgan developed the ConsenSys Quorum chain. It is one of the significant steps towards the common adoption of Blockchain by financial industries. In this post, we shall explore the ConsenSys Quorum Blockchain, its features, and use cases.

What Is ConsenSys Quorum Blockchain?

The ConsenSys Quorum chain is an enterprise-focused and permissioned Blockchain network specifically built for financial use cases. It is a fork of “GoQuorum,” a lightweight of geth designed to leverage the R&D inside the Ethereum community. “Geth” is a public Ethereum client. It has lots of protocol-level enhancements created to support business needs. The goal of this Blockchain is to create an enterprise Ethereum client that empowers businesses to adopt and leverage the benefits of Blockchain technology.

We can also see ConsenSys Quorum as Ethereum-based decentralized ledger technology. It offers a permissioned way to apply the Ethereum network to support the privacy of contracts. The ConsenSys Quorum chain like Ethereum but with minor differences. It differs from Ethereum in:

The management of its network and peer permissions.
Its better transaction and contract privacy
The voting-based consensus mechanism
It has a better performance than Ethereum

Read about Binance Ecosystem.

The Features Of ConsenSys Quorum Blockchain

1. Permissioned

The ConsenSys Quorum chain is designed to be permissioned. It means that all the networks using Quorum will not be open to all, unlike Ethereum. Therefore, permissioned Blockchain networks operate differently. There are completely different expectations of trust between approved nodes in the network compared to permissionless ones.

In other words, the ConsenSys Quorum Blockchain system is a consortium Blockchain. It is only implemented between participants that have been pre-approved by a designated authority. Although consortium Blockchain systems run in the same manner and with the same features and protocols of a normal Blockchain, it relies only on permitted nodes. The implication is that organizations can consider the feasibility of Blockchain technology without the possibility of failure.

2. Privacy

Financial institutions have always prioritized the confidentiality of records. This is one of the issues that regular Blockchain systems like Ethereum failed to resolve. When it comes to corporations and industries, the pseudonymous nature of the transaction can be easily undermined. Aside from its permissioned nature, the ConsenSys Quorum chain further improves privacy by integrating private and public on-chain transactions.

While the public transactions function like that of Ethereum, the private transactions are verified. However, the details of the private transactions are not disclosed. With the use of a system known as Constellation, ConsenSys Quorum is able to manage much of its secure message transfers. In simple terms, Constellation is a general-purpose mechanism that is not entirely Blockchain-related. The ConsenSys Quorum chain owes its superior speed to Constellation and the architecture it supports.

Aside from the privacy in transactions, it also offers privacy for smart contracts. Smart contracts are something banks and other financial institutions are wary of exposing due to security reasons. These smart contracts could contain sensitive information like investment strategies, transaction data, or internal information. In addition, ConsenSys Quorum has been partnering with Zcash to integrate the zero-knowledge security layer (ZSL) into the ConsenSys Quorum protocol. Both of them have released a proof-of-concept technical design document detailing the project.

3. The Consensus Mechanism

Its consensus mechanism is called the ConsenSys QuorumChain. It is initiated inside the genesis block. The ConsenSys QuorumChain is a simple, straightforward majority voting protocol. The fact that consortium chains are permission means there is no need to have an expensive PoW mechanism. However, ConsenSys QuorumChain offers different consensus mechanisms suitable for private Blockchain networks. These mechanisms include the following:

• RAFT-based Consensus

RAFT achieves consensus through an elected leader. The leader is saddled with the responsibility of executing log replication to the followers. In this form of consensus mechanism, the leader can decide on placing new entries and establishment of data flow to other servers without consulting those servers. The leader continues to lead until it fails or disconnects, and then a new leader is elected.

• The Istanbul BFT Consensus:

Since this is a Byzantine fault tolerance algorithm is based on the Practical Byzantine Fault-tolerant (PBFT) consensus algorithm, the PBFT supports immediate transaction finality and provides liveness and safety under the standard Byzantine fault threshold assumptions.

• The Clique Consensus

This is a Proof-of-Authority (PoA) consensus algorithm. It is readily available with “geth,” the Go Ethereum client.

The Use Cases Of ConsenSys Quorum Chain

There are many use cases of the ConsenSys Quorum Blockchain. It is used but not limited to healthcare, identity, payments, property, capital markets, etc. Here is a list of some of the projects and brief descriptions:

• Tokenized Cash

It is a distributed ledger developed by HIS Markit. The project helps you to keep track of all cash movements.

• The JPM Coin

This project is designed to promote the immediate settlement of transactions. The transactions are basically between clients of the financial institution’s wholesale payment business.

• The Marketplace For Loans

This is a decentralized marketplace where people come to seek access to loans. StreamSource develops the platform.

• Interbank Information Network (IIN)

The project allows its member banks to exchange information at the same time in order to verify payments.

ConsenSys Quorum Chain Tools And Development

The ConsenSys Quorum system has a lot of tools that help to improve both user and developer experience. These tools are mainly made up of network management, deploying and monitoring utilities, and others. The tools include ConsenSys Quorum support in truffle, Blockchain explorer for ConsenSys Quorum by Web3 labs, Cakeshop. Also, this Blockchain is available on cloud platforms like Azure and Kaleido. There is also the reporting tool that provides convenient APIs that help to generate reports concerning contracts deployed to a particular network. Some third-party tools like Splunk and Prometheus are also very useful in the deployment of the ConsenSys Quorum Blockchain network.

Conclusion

The ConsenSys Quorum Blockchain offers an enterprise-grade Blockchain network with high performance and privacy. Myriads of features made this chain an excellent choice for enterprise use cases. At the moment, ConsenSys Quorum appears to be a great idea and approach that can revolutionize the financial industry. The acquisition of Quorum by ConsenSys is great news to the enterprise Blockchain community. It also reinforces the impact of Blockchain in the financial industry.

Also read Stellar Payment Network: Detailed Explanation.

Hybrid And Federated Blockchain Networks

This article will give you a detailed insight into the worlds of Hybrid and Federated Blockchain networks. Although the Blockchain market is expected to shrink in 2020 due to restrictive containment measures prompted by the outbreak of Covid-19, the market is expected to grow rapidly in the coming years.

Blockchain technology has been the foundation of cryptocurrencies and has been of great use in financial services. As a decentralized database, Blockchain technology has made digital transactions secure, safe, and transparent. Some companies, like BitPesa, conduct their overseas payment using Blockchain technology. Currently, Blockchain has found its use in healthcare, supply chain, government, and other sectors.

In this article, you will better understand the fundamentals of Federated and Hybrid Blockchain networks and how they function. Before we delve further into this topic, read more about Blockchain technology here.

What is Federated Blockchain?

A Federated or Consortium Blockchain is quite similar to a private Blockchain. However, there is a line of demarcation between both. In a Federated Blockchain network, there is no sole organization influence. This is unlike the private Blockchain that operates on a permissioned distributed ledger system. Some private Blockchain systems make use of public readability features, whereas others do not.

In a Federated Blockchain network, multiple entities make use of the network, and they will create a decentralized system. Therefore, instead of having one organization take charge of the network, Federated Blockchain allows multiple organizations to use the network for their benefit. A good example of Federated/Consortium Blockchain is Enterprise Ethereum Alliance (EEA). Some of the leading organizations that are members of EEA include Microsoft, Accenture, J. P. Morgan Chase Bank, Vitro Technology Corporation, etc.

These organizations come together to ensure the network works efficiently. That is why it is called Federated Blockchain or Blockchain Consortium. There are three basic types of Federated/Consortium Blockchain and they include:

Technology-focused Consortium Blockchain
These Blockchain consortia provide reusable Blockchain platforms with solutions that are based on technical standards. Examples include Hyperledger, Enterprise Ethereum Alliance, etc. Their main purpose is to help Blockchain technology attain global recognition.
Business-focused Consortium Blockchain
These Blockchain consortia develop solutions for a particular business issue and examples include Bankchain, TradeLens, and so on. In reality, they focus on a specific use case like banking, supply chain, energy, etc.
Dual-focused Consortium Blockchain
They offer both technology and business solutions. Therefore, they provide an open-source platform suitable for any kind of business or technological solution. A very good example is R3.

How does it work?

Imagine twenty different organizations are working together in the same Blockchain network. From these twenty organizations, a node will be pre-selected to enable changes on the network. These nodes can do several things. The nodes have the authority to either read or write transactions. They have the power to restrict or allow participants on the network. However, these nodes don’t have the sole power to add a “block” in the database. Before a “block” can be added on the network, each of the nodes has to sign off the “block.” Even if one of the nodes disagrees, the “new block” will not be added.

You cannot see such a feature in private Blockchain networks. This feature helps to ensure that no one can exploit their superior access to the network. Federated Blockchain uses the Proof of Vote mechanism to reach a decision.

Benefits Of Federated Blockchain

Here are some benefits that you can expect from Federated Blockchain platforms.

It saves cost
The basic idea of being part of a Federated Blockchain is to cut costs. Therefore, you should go for the one that offers the most cost-saving feature for your business.
The participants share the risk involved
This is another great benefit of Federated Blockchain. You should seek a platform where all participating companies will share the risk in case of a new Blockchain solution. The relatively “new” nature of Blockchain means there are lots of risks associated with it in the market.
Gradual mass adoption
As more companies are coming together under a Federated Blockchain platform, it helps to drive mass adoption. Mass adoption helps your company to reach new heights easily.

Learn more about Federated Blockchain and its use cases here.

What is a Hybrid Blockchain network?

Now, let's talk about the Hybrid Blockchain network. It is a combination of the strength in both private and public Blockchain solutions. Ideally speaking, Hybrid Blockchain means having controlled access and freedom at the same time. Hybrid Blockchain solutions are completely customizable. The participants determine which transactions they will make public and who becomes a member.

Before you can have a clear understanding of Hybrid Blockchain, you need to first understand private and public Blockchain. Like its name, public Blockchain is accessible and managed by the public. However, private Blockchain only grants access to a few entities involved in the development of private Blockchain. Private Blockchain networks have administrators who control the permission or addition of data.

All transactions that take place in a Hybrid Blockchain system can be kept private. Although these transactions are private, they are still verified when needed. Once you can access the Hybrid Blockchain, you can fully take part in all activities of the network. However, the identity of each participant is hidden from others on the network.

Hybrid Blockchain combines the speed of private Blockchain and the security of the public Blockchain. It uses the private Blockchain to generate a hash of transactions while employing the public Blockchain feature for verification. Some real-life applications of Hybrid Blockchain include the Ripple network and the XRP token and XinFin.

Use Cases of Hybrid Blockchain

Supply Chain
Hybrid Blockchain can be a great help to supply chain networks because of the large nature of the supply chain. The supply chain needs to be neither private nor public Blockchain but a combination of both. The IBM Food Trust is one big example of the use case of Hybrid Blockchain in the supply chain.
The Banking Industry
Hybrid Blockchain is an ideal solution to most of the challenges we experience in the banking sector. As the banking industry needs to solve internal problems and also secure user information, the need for Hybrid Blockchain becomes more imperative.
Government processes
Hybrid Blockchain can help make government processes more efficient. The government can leverage Hybrid Blockchain to create a public identification database, conduct elections, provide both social and humanitarian assistance, etc.

Conclusion

Both Federated and Hybrid Blockchain are disruptive. Therefore, to answer the question that which one of the Hybrid and Federated Blockchain is the best, we can say that it depends on the use case. However, each of these two networks has its peculiarities in the industry. Blockchain Consortium cannot do the work of a Hybrid Blockchain system, and vice versa.

Xord provides Blockchain services and solutions to your business. Connect with us for your Blockchain projects and free Blockchain consultation at https://xord.solutions/contact/