Today we’re covering a permissioned ledger that’s being put forth by JP Morgan: Quorum.
So what exactly is Quorum?
Quorum calls itself an enterprise-focused Ethereum. In fact, the vast majority of code is the same. However, it is an application used to process private transactions specifically for a permissioned group of known participants. Quorum uses smart contracts to create an ecosystem that allows for the Quorum private blockchain to function. Like most blockchains, their goal is scalability, and for this project it comes in the form of processing enough transactions so that Quorum can be a functional payment system.
We’ve seen what happens when the Ethereum network gets too clogged. The transparency and decentralized processing offered by the Ethereum Virtual Machine makes the public chain currently unviable for a large amount of transactions. Quorum has focused on four specific goals they want their blockchain to accomplish, and you can see how they are pretty different from the original Ethereum blockchain.
1 – The biggest difference being Quorum is permissioned; so it will not be open and transparent to everybody. While public blockchains have a certain level of anonymity, the users of Quorum are two or more pre-identified parties. This ecosystem makes it significantly easier for businesses to interact, while mitigating the friction that has previously restricted their activities. Learn more about public and private blockchains here.
2 – Another difference is privacy. While the parties using the Ethereum blockchain may be unidentified, the data that is transmitted to the blockchain is transparent and viewable by anyone. This may not be ideal for business, as they may not want all of their valuable data out there in the open for anyone to see.
Quorum’s permissioned blockchain has an answer for this. Since the parties are public, the information does not have to be. This allows businesses to exchange sensitive data without worrying about the issue of data escape. Data escape is actually a pretty simple concept. Let’s say that you have some data that’s valuable, and you want to monetize it. You can sell your data set, but once you do that your data can be resold and is just out there in the open market. This is an issue that enterprise is aware of, and these companies are turning to Quorum to solve the problem of data escape.
3 – We’ve already discussed some of the issues Ethereum’s blockchain is facing and most of them have to do with how to scale the network. But what really determines the speed of the network? The short answer? Reaching consensus. The harder it is to reach consensus, the longer confirmations will take. Because Quorum is closed and permissioned, it is easier to reach consensus, allowing Quorum to process hundreds of transactions per second, compared with Ethereum’s 15 to 20 transactions per second.
4 – Lastly, Quorum uses a simple majority voting mechanism for validation. Pre-selected delegates are given voting privileges. While this may not be ideal in an open blockchain, this gives more control to the parties looking to execute a transaction in a private one.
JP Morgan is the organization behind Quorum, and it’s likely the software will be deployed for use in banking and finances. However, as Quorum grows and develops, JP Morgan sees more varied uses for Quorum on the horizon.
To learn more about Ethereum, check out our resource guide on the project for all the info! And to learn more about public versus private blockchain, our expert explains it all in this short video!
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