A consortium blockchain is part public, part private. This split works at the level of the consensus process: on a consortium chain, a pre-selected group of nodes control the consensus process, but other nodes may be allowed to participate in creating new transactions and/or reviewing it. The specific configuration of each consortium chain (i.e., which nodes have the power to authorize transactions via the consensus process, which can review the history of the chain, which can create new transactions, and more) is the decision of each individual consortium.
It doesn’t matter if you’re moving $1bn or 0.01c across the Bitcoin network, you get the same security guarantees.   And you pay for this in fees and time.   What if you were prepared to trade safety for speed?   Today, your only real option is to send the coins to a centralized wallet provider, whom you must trust not to lose or steal your coins. You can then do all the transactions you like on their books, with their other customers and you never need touch the Bitcoin blockchain. But now you lose all the benefits of a decentralized value-transfer network.

But, rather than go back to the drawing board, many people are figuring out alternative way to eke better performance outbid the system, and one approach is to use a sidechain.. sonrsther than process many transactions on the bitcoin network, two parties that transact a lot together might deposit down bitcoin into a side chain and conduct a bunch of transactions there (avoiding the absurd cost and delay of bitcoin) and then when they want to “settle up” they then invoke a balancing transaction on the bitcoin network.
Send your Bitcoins to a specially formed Bitcoin address. The address is specially designed so that the coins will now be out of your control… and out of the control of anybody else either. They’re completely immobilized and can only be unlocked if somebody can prove they’re no longer being used elsewhere (I’ll explain what I mean by this in a minute).   In other words, you’ve used the core bitcoin transaction rules I described above to lay down a specific condition that the future owner – whoever it ends up being – needs to fulfil in order to take control
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Consortium blockchains: a consortium blockchain is a blockchain where the consensus process is controlled by a pre-selected set of nodes; for example, one might imagine a consortium of 15 financial institutions, each of which operates a node and of which 10 must sign every block in order for the block to be valid. The right to read the blockchain may be public, or restricted to the participants, and there are also hybrid routes such as the root hashes of the blocks being public together with an API that allows members of the public to make a limited number of queries and get back cryptographic proofs of some parts of the blockchain state. These blockchains may be considered "partially decentralized".
I have a hard time swallowing that Bitcoin “isn’t a ledger”. That’s like saying “Bitcoin isn’t the blockchain”, and if you take the blockchain away from Bitcoin, you aren’t really left with much (including, sidechains). Perhaps Bitcoin isn’t a ledger *from the perspective* of individual transactions, but by the same logic, nothing that isn’t transaction data is.
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First, clear your head of anything related to money, currency or payments. And clear your head of the word ledger, too. The mind-bending secret of Bitcoin is that there actually isn’t a ledger! The only data structures that matter are transactions and blocks of transactions. And it’s important to get this clear in your head if sidechains are going to make sense.
Blockchains that are private or permissioned work similarly to public blockchains but with access controls that restrict those that can join the network, meaning it operates like a centralised database system of today that limits access to certain users. Private Blockchains have one or multiple entities that control the network, leading to the reliance on third-parties to transact. A well-known example would be Hyperledger.
That might sound like a problem, but it isn’t because the box can only be opened infrequently (two or three times a year), and a super-majority of miners must leave a note on the box in advance. This note states exactly where the miners intend to transfer the money. The “correct” note is automatically generated by sidechain software, and is easy to check.
Unfortunately our second option cannot be done yet, because to use these sidechains, main chain (here it is bitcoin) needs to do some upgrade (soft fork). By the way, upgrades in public blockchains are very painful yet. There will be a user activated soft fork (UASF) on August 1. All bitcoin forms’ trend topic is this soft fork which is about a code change for Segregated Witness Adoption.
Thus Tradle set out to build a meta-protocol that saves the data in the overlay network, and only puts minimal referencing data on the blockchain. There is a general grumpy consensus among bitcoin core devs and mining pool operators on allowing one small data chunk, a hash, per transaction. Many devs say it is not possible to secure this second overlay network. I agree, unless we use the blockchain to help with the task. We have a partial solution working, and are preparing a new design to improve it (partial, as it can not yet handle all known attacks). We are actively sharing the designs at various meetups (and on the github) and are inviting devs to find attack vectors and propose solutions. Tradle’s protocol not only relieves the pressure on bitcoin’s blockchain but is also able to handle larger transaction sizes than Counterparty and Mastercoin, so it can be used for complex identity, supply chain management and many other applications. It is also capable of handling attachment files, needed in the healthcare and financial industries.
Things get a bit more interesting when you replace the single custodian with a federation of notaries by way of a multisignature address. In this model, a federation of entities must sign-off on movements to and from the sidechain, so more parties must be compromised for a failure situation to unfold where the bitcoins frozen on the main chain are stolen.

A consortium blockchain is often said to be semi-decentralized. It, too, is permissioned but instead of a single organization controlling it, a number of companies might each operate a node on such a network. The administrators of a consortium chain restrict users' reading rights as they see fit and only allow a limited set of trusted nodes to execute a consensus protocol.


The consensus mechanism involves ascertaining transaction validity and uniqueness. Smart contracts address the validity portion. To ensure uniqueness, the protocol program in Corda checks whether any other transaction has used any of the input states of this transaction. If no other transaction has used any of the input states, that this transaction is unique.
Loom Network is a Platform as a Service built on top of Ethereum that allows developers to run large-scale decentralized applications. This lets developers build DApps with the trust and security of the world’s most secure public blockchain, along with the computing resources necessary to run commercial-scale services. Like how Filecoin tokenized disk space, Loom aims to be the tokenized application protocol of the new decentralized web.

Ethereum is an open-source blockchain platform that allows anyone to build and use decentralized applications running on blockchain technology. Ethereum is a programmable blockchain - it allows users to create their own operations. These operations, coded as Smart Contracts, are deployed and executed by the Ethereum Virtual Machine (EVM) running inside every node.

It may sound nitpicky, but I think that description leaves something to be desired in terms of presenting the “correct” mental model. First, there is no such thing as “a” bitcoin, as I am sure the author would agree. Speaking of spending or moving bitcoins perpetuates the notion of bitcoins as “things”. It might be preferable to say that you are spending or moving “units of the bitcoin protocol”. There is something similar going on here with dollars. The dollars in your bank account aren’t things either, they are units of demand or claim on a currency. The fact that printed dollars have serial numbers tends to confuse this notion. Treating something as a “thing’ which is not a thing is sometimes referred to as the reification fallacy.


Side-chain is another blockchain for one blockchain. To use side-chain of Bitcoin, for instance, you need to move BTC from the original chain to the side-chain. Then, BTC on the original chain is locked and the same amount of BTC on the side-chain appears. This is how BTC can be used/tested on another chain where we use some features different from the original ones.
If you’ve been keeping track of developments in the bitcoin industry, you’d know that the blockchain refers to the public ledger of transactions associated with the cryptocurrency. As the bitcoin ecosystem has grown in size and scale throughout the years, the blockchain has also increased considerably in length and storage size, prompting debates on whether or not to increase its block size limit.

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The first question to answer is “What is public blockchain?” The very name of this type of networks implies that they are open and permissionless. It means that anyone in the world can join the network, add blocks and view the information stored there. Indeed, public blockchains are totally transparent as any of their members can audit them. For this reason, independent participants can easily agree on transactions without middlemen and the fear of deception.
These kinds of blockchains are forks of the original implementations but deployed in a permissioned manner. Mainly hyped because the companies behind these chains want to onboard corporations in order to generate buzz around their their chain. It’s tolerable for proof of concepts or if they plan to move to public as soon as possible; otherwise they are just using the wrong set of tools for the job.
Unlike the other two-way peg mechanisms discussed in this article, SPV sidechains do not give direct control of real bitcoins on the main chain to a custodian; however, the ability for a majority of miners to produce and build upon fraudulent SPV proofs gives them indirect control over the funds, including the ability to send to themselves. Having said that, there are ways to mitigate this issue.
Jump up ^ Epstein, Jim (6 May 2016). "Is Blockchain Technology a Trojan Horse Behind Wall Street's Walled Garden?". Reason. Archived from the original on 8 July 2016. Retrieved 29 June 2016. mainstream misgivings about working with a system that's open for anyone to use. Many banks are partnering with companies building so-called private blockchains that mimic some aspects of Bitcoin's architecture except they're designed to be closed off and accessible only to chosen parties. ... [but some believe] that open and permission-less blockchains will ultimately prevail even in the banking sector simply because they're more efficient.
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External Account, which stores ETH balance – This contains the address of the User that was created using the Web3.js API, e,g, personal.newAccount(…). These accounts are used for executing smart contract transactions. ETH is your incentive received for using your account to mine transactions. The address of the account is the public key, and the password of the account is the private key.


In order to trade assets from the mainchain for assets from the sidechain, one would first need to send their assets on the mainchain to a certain address, effectively locking the assets up. After the transaction has been completed, a confirmation will be communicated to the sidechain. The sidechain will then release a certain amount of the assets on the sidechain to the user, equivalent to the amount of assets ‘locked up’ on the mainchain times the exchange rate. To trade the assets from the sidechain for assets of the mainchain, one would need to do the same, just the other way around.
A company called Blockstream has been focusing on these developments and has announced the release of Sidechain Elements, which is an open-sourced framework for sidechain development. It includes a functioning code and a testing environment for working with sidechains with several components: the core network software to build an initial testing sidechain, eight new features not currently supported by bitcoin, a basic wallet and the code for moving coins between blockchains.
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The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta.[10][6] They wanted to implement a system where documents' timestamps could not be tampered with or backdated. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several documents to be collected into one block.[6][11]

By design, a blockchain is resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way".[7] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority. Although blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a blockchain.[8]
Function Transactions executed between the locks and unlocks of the main chain tokens don't bloat the main chain. As the technology of a side chain is connected to its main chain, it can be used to build on the developments of the main chain and introduce new features to the market. Child chains serve as the transactional chains of the parent-child architecture, as the parent chain retains minimal features.

Forbes reports that blockchain and biometric eyeball scanning technologies underpin the systems that support food distribution in the Syrian refugee crisis. While there are many further uses of blockchain, at the core of its business functionality is the creation of transparent, stacking “ledgers” of information. This is where private blockchain can prove extremely useful.


“Blockchain could significantly reduce time delays and human mistakes, and monitor cost, labor, waste and emissions at every point in the supply chain. In the food sector, a manufacturer could automatically identify contaminated products in a matter of seconds and wouldn’t need to pull an entire product line from store shelves in the case of contamination.”
What Bitcoin’s development team is essentially doing through feature-creep is forcing everyone in the non-tech world to use Bitcoin through commercial proxies to avoid all this complexity (crypto-what? security? sidechain?), which effectively results in the loss of security, relative anonymity and decentralized properties that helped to make it interesting in the first place.
Performance at scale: It is not uncommon for large businesses to process 100,000’s of transactions per second (TPS). Therefore, enterprise blockchains need to scale so that they can deliver performance accordingly. To achieve this, they can compartmentalize processes using containers or similar approaches. Read more about this requirement in this article “Enterprise blockchain ready to go live”.
@gendal, good question. Think of the identity hash as a bitcoin address, it is indeed public. So to assert anything with this identity you need to sign the object you are creating or changing with the identity’s private key. Specifically it is a private key that corresponds to a public key that you published in your identity’s object (json). The signature is not placed on the bitcoin transaction, as OP_RETURN has only 40 bytes. The signature is added to a [json] object that is modified with this identity. If you see any fault with this, please let me know.
@gendal, good question. Think of the identity hash as a bitcoin address, it is indeed public. So to assert anything with this identity you need to sign the object you are creating or changing with the identity’s private key. Specifically it is a private key that corresponds to a public key that you published in your identity’s object (json). The signature is not placed on the bitcoin transaction, as OP_RETURN has only 40 bytes. The signature is added to a [json] object that is modified with this identity. If you see any fault with this, please let me know.
Structure Side chains are independent blockchains that have a kind of "pegging mechanism", where at least one of the chains (main chain and side chain) is "aware" of the other chain and both tokens are pegged at a set ratio. Side chains need their own network security and block processing. "Child Chains" of the Ardor platform are tightly integrated into the main Ardor parent chain. All transactions are processed and secured by the parent chain forgers. This makes cross-chain transactions possible. Pruning will be enabled on child chain transactions in order to significantly reduce blockchain bloat by pruning the transactions on regular basis from the blockchain.
Private and Public Blockchain occurs when the financial enterprises start to explore the various blocks of the Blockchain technology. These two Blockchains are coming up with business oriented models as to obtain the difference between the two. The private blockchain generates at a lower cost and faster speed than the public blockchain. In the previous years, the blockchain has grown to become an interesting subject globally. It is becoming an integrated part in the financial sectors all over the digital world.
Contrary to popular belief, aided by deceptive blockchain marketing, blockchains are not a good solution for storing data. Each piece of information that you store in the blockchain sits in hundreds or more nodes (more than 100,000 in the case of Bitcoin) making it an extremely costly solution. This is why the Iryo Network doesn’t store data on blockchain but instead, uses blockchain to ensure the transparency of transactions. As a disclaimer, competitors also don’t save medical data on the chain itself (even those who use private chains). Instead, only the fingerprint aspect of a medical record file or a hash is stored on the blockchain.
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