by Naveen Joshi – Director at Allerin
Works on Data Analytics and Strategies, Process Automation, Connected Infrastructure (IoT)
Quorum blockchain is an open-source blockchain platform for the finance sector based on Ethereum.
Blockchain is one of the major technologies that has been doing the rounds in the past few years. The finance industry was considered to be one of the primary beneficiaries of blockchain technology when it was introduced. However, blockchain hasn’t made the impact that it was supposed to yet. The finance sector was diffident with blockchain technology.
There was a need for a major player to bring blockchain to the forefront. J. P. Morgan, therefore, developed Quorum blockchain to instill confidence amongst banks and financial institutions regarding blockchain. But what raised the need for developing Quorum blockchain?
The need for developing Quorum blockchain
The finance sector has been a slow adopter of blockchain technology due to the concerns with the technology. Issues with control of information, public transparency, and data access were some of the key factors that made the finance sector hesitant with adopting blockchain technology. Quorum was thus designed to conciliate these critical issues regarding blockchain.
Salient features of Quorum blockchain
Quorum blockchain is built on Go Ethereum, the base code for Ethereum. Therefore, it functions similarly to Etherum but with four major distinctions. They are:
Improved permissions management
Quorum is a permissioned blockchain. This means that networks using Quorum will not be open to all. Quorum’s permissioned chain is implemented only between participants that are pre-approved by a designated authority. This adds a layer of security and transparency, as transactions cannot be carried out without approval.
Better privacy
Quorum blockchain ensures data confidentiality, which is a crucial factor for financial institutions. In addition to its permission nature, Quorum introduces on-chain public and private transactions. The open transactions are similar to Ethereum, whereas details of private transactions are not exposed to the public. One of the key aspects that sets Quorum apart from Ethereum or other blockchain technologies is Constellation. The Constellation mechanism encrypts specific messages in an enclave and stores information about previous transactions. A major chunk of the cryptographically-heavy work is done inside the Constellation enclave, making it safe and secure.
Voting-based consensus
Quorum is based on QuorumChain, its voting consensus mechanism. This mechanism delegates voting rights to others. To assign voting rights, Quorum makes use of smart contracts. In addition to assigning voting rights, Quorum also tracks the status of all the voting nodes. It works as a majority voting protocol, it means, the transaction is completed if it receives majority votes. Quorum transactions include Global Transaction Hash, Public State root hash, and the block maker’s signature.
Faster performance
One of the most significant advantages of using Quorum is its high performance. Quorum can carry out more than 100 transactions per second. This output is higher than Bitcoin and Ethereum. This faster-processing speed makes Quorum the preferable choice for banking institutions. The secret behind this high speed is the simple consensus mechanism used by Quorum.
Quorum has clear benefits for financial institutions. Although it has a restrictive mechanism, it reduces the trust issues that banks and other financial institutions have with blockchain. Banks and other financial institutions can start working with Quorum blockchain either by using a pre-configured network sample or by creating a full network from scratch.
