How Does a Consortium Blockchain Achieve Consensus?
A consortium blockchain typically uses a consensus mechanism like Delegated Proof-of-Stake (DPoS) or a Byzantine Fault Tolerance (BFT) variant, such as Practical Byzantine Fault Tolerance (pBFT). Consensus is achieved by a pre-selected, limited set of trusted validator nodes, which are usually the member organizations.
These nodes validate transactions and propose new blocks. A supermajority of these trusted nodes must agree on the block's validity for it to be added to the chain.
This approach provides high transaction throughput and faster finality compared to public chains.
Glossar
Consortium Blockchain
Governance ⎊ These structures operate under a pre-selected set of validators, establishing a defined decision-making framework for protocol upgrades and dispute resolution.
Byzantine Fault Tolerance
Resilience ⎊ Byzantine Fault Tolerance, within the context of cryptocurrency, options trading, and financial derivatives, fundamentally addresses system robustness against failures ⎊ specifically, those arising from malicious or unintentional errors by individual components.
Practical Byzantine Fault Tolerance
Consensus ⎊ Practical Byzantine Fault Tolerance (pBFT) represents a crucial algorithmic advancement enabling distributed systems, including blockchain networks, to achieve consensus even when a subset of nodes operate maliciously or experience failures.
High Transaction Throughput
Velocity ⎊ The rate at which transactions are processed and confirmed is a primary determinant of a blockchain's suitability for high-frequency trading and derivatives settlement.