- A consortium blockchain is a type of blockchain technology that efficiently balances security and availability as a decentralized network
- Public blockchain networks were the original concept of a decentralized network
- In private blockchains, a sole entity controls the rules governing blockchain technology
The concept of a decentralized network or Web 3 has turned the tide in many organizations. Industries in finance, healthcare, agriculture and even education have sought the technology. Africa’s ecosystem is a success story as experts claim that Web 2 or the Internet has yet to have deep roots in various African countries, making it the perfect candidate for Web 3.
Thus the blockchain adoption rate in Africa significantly contributed to the development of different types of blockchain technology. CeFi and DeFI have been the initial focus of most individuals, but when taking a deeper look, it all falls into three main categories public, private, and consortium blockchains.
Despite their primary technology, all three serve different functionalities. The first two are self-explanatory, but the latter has more nuance. This article will showcase the various facts as to why Consortium blockchain accurately depicts decentralized networks. In addition, its applications can significantly benefit Africa’secosytem compared to the other decentralized networks.
Understanding the basic concepts of other blockchains and their role in Africa
Before diving into the benefits and superiority of consortium blockchain networks, we will establish a basic understanding of the other two and their distinct roles in increasing the blockchain adoption rate in Africa.
These are the most common examples of blockchain technology. Public blockchain networks were the original concept of a decentralized network. This is because Bitcoin was the first application of public blockchain technology. From its definition, public means anyone has the right to enter the network. It is open to all entities wishing to experience blockchain technology’s joys. There is only one authority that can solely control or govern the operations of this network. Data from this type of blockchain technology is accessible to everyone, and issuing of digital currencies and other applications are the primary uses of this technology.
Generally, public blockchain technology is mainly associated with cryptocurrency and other digital assets.
The efficiencies brought by public blockchain networks initially sparked the blockchain adoption rate in Africa. Later, developers extracted the essential technologies that made these decentralized networks work so efficiently and applied them to different sectors of various niches.Unfortunately, this is basically where the advantages end. Because public blockchain technology is so open, it creates a window of opportunity for exploitation. The actual reason it has functioned so well over the years is simply due to the underlying common interest of cryptocurrency. Without it, its participants would not be incentivized not to tear down the network and exploit its numerous functionalities.
Even in Africa’s ecosystem, the only reason public blockchains thrive is the sheer value of crypto coins. Take that away, and individuals would no longer have any reason to use it, especially in Africa, where value is preferred first over vision. Its primary technology also proved challenging to implement in other sectors due to insecurity and the technology’s energy consumption. The value of its cryptocurrency’s value makes it so secure, but it falls short when diving into other sectors.
Like the public blockchain, individuals can easily deuce its functionality from its private name. Unfortunately, this type of blockchain technology is the least likely “decentralized”. This is because a sole entity controls the rules governing blockchain technology.
Many experts and users have referred to this as a centralized, decentralized platform. It’s further diluted and brought in crypto exchanges. This kind of decentralized platform’s key feature is that one entity has more power over the decentralized network than the rest. Despite its peculiar demeanour to merge both centralization and decentralization, it is by far the most productive use case within Africa’s ecosystem.
Private blockchains are more common
Most individuals may not realize it, but the innovations of African blockchain developers significantly contribute to the blockchain rate in Africa. Organizations such as Yellow Card and other Fintech industries may appear decentralized. Although, they are classifiable in more ways than one as private blockchains.
This type of blockchain technology falls short of a decentralized network due to two key aspects. The first is the presence of a central authority. It is important to note that it does not mean its functionality is less efficient. Rather the fact that decentralization aims to root out central authority, thus applying both defeats the purpose.
The second is its overall security. One of the critical aspects of any decentralized network is balancing security and availability. Overemphasizing security reduces its availability and vice versa. It falls short since decentralized networks advocate for user empowerment.
Understanding Consortium Blockchain
A consortium blockchain is a type of blockchain technology that efficiently balances security and availability as a decentralized network. They are networks that are composed of various entities that each have access control. It has fewer participants than public blockchain technology but is more scalable to private blockchain technology.
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The number of participants in each decentralized network determines each transaction or operation’s overall latency and speed. Blockchain developers have further improved the concept of consortium networks by creating a hybrid blockchain network that is merely an expanded version.
What makes Consortium blockchain networks superior
A consortium network, as mentioned above, contains the mechanism to create a decentralized network that only a few participants can access. Thus authority is evenly distributed among participants.
The key reason is the accurate definition of a decentralized network. The transaction rate increases with a limited number of users, and each entity has the same authority over the network.These facts significantly improve its efficiency allowing its network to be more controllable and secure. Public blockchain networks often need more flexibility. Acquiring enough votes within a decentralized public network is cumbersome hence why Bitcoin will have difficulty evolving. When implementing the various aspects of the public in any other sector, one should have the notion of sustenance rather than improvement. In a private blockchain, any changes are monopolized, effectively stripping any power from the user.
Consortium blockchain networks also have a high sense of security. With the entities in each group, data generally circulates between them and any change or alteration will require the total consensus of each individual within the decentralized network. The consortium blockchain network’s very dynamics can significantly increase the adoption rate in Africa.
How can consortium blockchain benefit Africa’s ecosystem
Africa’s ecosystem is mostly a clustered population. The density of a population significantly differs between different regions. This creates the perfect environment to apply blockchain technology within different sectors.
Also, Read the Decentralized Internet in Africa.
The financial sectors have greatly improved through private blockchain networks due to increased security, but this factor needs to catch up due to its availability. Applying consortium blockchain methodology to Africa’s financial sector creates a sense of decentralized networks in terms of groups.
Banks and other financial sectors can band together from a decentralized network to cater to a specific region’s demographic with Africa’s ecosystem. It also creates a secure blockchain database whereby African communities can easily access their financial information.
A consortium blockchain is also an added advantage to Africa’s healthcare industry. Due to the diverse nature of various hospitals, collaboration between hospitals is improbable. Instead, applying a consortium blockchain network to different branches of a single hospital can ensure efficiency, relative speed, and security. In addition, when considering a specific region in Africa’s ecosystem, all hospitals within can form a decentralized network that allows patients to access their medical information regardless of the hospital.
Lastly, since consortium blockchains have a delicate balance between security and availability, they are generally the perfect depiction of a small-scale Web 3 network.
The main goal of all decentralized networks is to usher in a new age of the Internet. Such a feat will take time, but the existing basic concept made work more accessible. A consortium is a group within a decentralized network. However, when upscaling it and having different groups all interconnected in a decentralized network achieving the dream of Web 3 is not so far-fetched.
In a nutshell, the blockchain adoption rate in Africa is still soaring to great heights as more developers emerge. When applied effectively, consortium blockchain technology may have the means to take Africa to the next step.