“If crypto succeeds, it’s not because it empowers better people. It’s because it empowers better institutions.” – Vitalik Buterin, Founder, Ethereum
The transformative potential of blockchain technology has been celebrated for its ability to bring about decentralization, security, and transparency. One of the core tenets of the blockchain revolution has been the idea of a single, immutable source of truth—a global ledger accessible and verifiable by anyone. However, the emergence of consortiums, which are essentially private or semi-private blockchain networks operated by a group of entities, has sparked a debate about the true vision of blockchain.
At first glance, consortiums have been described as “antithetical” to the decentralized ideology of blockchain. Critics argue that they represent an additional layer of fragmentation in an ecosystem that was designed to be unified. Instead of moving towards a single universal source of truth, consortiums seem to create silos, each with its own version of the truth. This, they argue, is a deviation from the idealized vision of blockchain.
“We have elected to put our money and faith in a mathematical framework that is free of politics and human error.” – Tyler Winklevoss, Founder, Gemini Cryptocurrency Exchange
However, the defense of consortiums is rooted in the practical application of technology and the realities of business and governance, rather than purely theoretical or ideologically driven. For certain industries and use cases, a fully public blockchain may not be feasible or desirable due to concerns related to privacy, regulatory compliance, or the sheer scale of operations. Consortiums, by virtue of their controlled environment, can offer a balance between the benefits of blockchain technology and the specific needs of their member organizations. They allow groups to leverage the advantages of distributed ledgers while tailoring access, governance, and consensus mechanisms to their unique requirements.
“We believe that the next wave of computing innovation will be driven by crypto. We are radically optimistic about crypto’s potential to restore trust and enable new kinds of governance where communities collectively make important decisions about how networks evolve, what behaviors are permitted, and how economic benefits are distributed.” – Chris Dixon, Katie Haun, Ali Yahya, Partners, a16z
Furthermore, it’s worth considering that the “true vision” of blockchain might be a spectrum rather than a fixed point. Just as the internet has both public websites and private intranets, the blockchain ecosystem can accommodate both public chains and consortiums. In fact, these different forms can coexist and even interact, bridging gaps and facilitating wider collaboration.
Consider, while consortiums might seem like a departure from the purest ideals of blockchain, they play a vital role in bringing the technology’s benefits to diverse sectors. Rather than viewing them as a dilution of blockchain’s promise, they can be seen as an evolution, adapting the technology’s core principles to the diverse needs of a complex world.
“Just as species evolve to better fit their environment, technology, including blockchain structures like consortiums, must adapt to meet the specific needs and challenges of its application.” – Matthew D. Ferrante, CTO, Citanex, Inc.
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Smart Contracts (Coming Soon)
References
Massachusetts Institute of Technology (MIT) Professional Education
