Quorum Blockchain Platform: Reviewing an enterprise-focused Ethereum version
Bringing a lot of industrial use cases and security solutions, blockchain is seeing rapid growth and evolution. Companies in different industries are working towards adopting the technology in their processes.
Being capable to solve various issues, from providing the security of transactions to authenticity confirmation, it can be applied in different spheres. One of them is banking and finance that has constant challenges associated with data privacy and confidentiality.
In their work, financial institutions have to establish the strongest safeguards and protect either their customers, employees, and internal operations. That’s why blockchain has such great prospects to come with innovative business models and help achieve a high-security level.
However, due to the specificity of the financial industry, where organizations in many cases just can’t afford having all the data and transactions publicly available, there are still some issues that require consideration. Here we mean information control, data access, and full public transparency that can cause some worries.
An important step towards their resolution was the creation of permissioned distributed ledgers and the emergence of blockchain development platforms enabling to build reliable blockchain projects for the enterprise use, e.g., Hyperledger Fabric.
In this post, we’ll speak about another promising platform, called Quorum, that was designed exactly for the needs of financial companies.
How it all began
In October 2016, J.P. Morgan, the world-famous bank, and EthLab company announced the creation of a new blockchain decentralized project, designed specifically for banking and financial applications.
A year after, J.P. Morgan together with Royal Bank of Canada and Australia and New Zealand Banking Group Limited launched the Interbank Information Network (IIN) based on Quorum blockchain platform. The project aim was to reduce friction in the global payment processes.
What is Quorum
Quorum is a smart contract platform and an enterprise-based version of Ethereum that allows building permissioned blockchain solutions. You may ask, why not apply private Ethereum chain for solving data privacy issues?
The answer is pretty straightforward: Ethereum has two downsides here: first, anyone can connect to the network; second, all the information inside smart contracts is visible to all nodes.
The key features of Quorum blockchain platform, and hence, extensions over Ethereum, are:
- Transaction & contract privacy
- Consensus protocol, called QuorumChain, based on majority voting
- Network/Peer permissions management
- Higher speed and performance
1. Transaction & contract privacy
Aiming at the improvement of information control and confidentiality, Quorum supports either transaction-level privacy or network transparency, customized to the business specific needs.
The platform introduces “public” and “private” transactions: while the first ones act like general Ethereum transactions, the second ones don’t have the details visible to each network participant for security reasons.
Thus, Quorum blockchain platform can privatize transactions and restrict their transfer without ruining the blockchain, ensuring that your information is routed and delivered to the intended recipient – and no one else will access it.
Quorum provides the Constellation system, used for managing secure message communications. Being a general-purpose mechanism (which isn’t necessarily blockchain-based, by the way), Constellation includes encrypting data transfers in communication with an enclave, responsible for doing much of cryptographically-heavy work.
Noteworthy, that Quorum also has privacy for smart contracts, which especially important for those of them, that contain some sensitive enterprise data or crucial investment details.
Quorum has a consensus protocol, called QuorumChain, which is initiated within the genesis block and is based on the majority voting. A special (voting) smart contract is used to monitor the entire voting process.
It links voting nodes so that they carry out a transaction as the correct block at a certain height in the distributed chain. Being used within the genesis block, a voting smart contract is also used for the assignation and management of voting rights.
3. Permissions management
A permissioned blockchain means that networks and transactions using it just won’t be visible to everyone, unlike it is with Ethereum (in most situations).
So, permissioned distributed ledgers can offer much higher levels of privacy and confidentiality, compared to permissionless ones, even if their architectures are almost the same. That’s the main reason on why they are so good for building blockchain solutions for the enterprise use.
In speaking of Quorum, its chain represents a consortium blockchain, implying that it is used between those members who have been pre-approved by a designated authority.
This kind of blockchain has the same features and protocols of a regular one but supports the failsafe of relying on permitted nodes only. As a consequence, companies can customize the technology to their needs with no fear of some breach.
Due to node/peer permissioning implemented in Quorum blockchain platform and ensured by smart contracts, you can be sure that only known parties can join and participate in the network.
4. Higher speed and performance
Quorum is distinct from other blockchain development platforms in that it provides higher speed and performance. Depending on the system configuration and other peculiarities, Quorum can process up to hundreds of transactions per second. It is a significant advantage which opens new opportunities for the financial industry.
So, why Quorum is so fast? The explanation lies mainly in a simple and straightforward consensus mechanism. The voting process goes quicker than PoW (proof of work) and PoS (proof of stake), especially in the case of massive networks of nodes.
Thus, we can say that Quorum blockchain platform perfectly suits for any use case that requires having high levels of speed, performance, trust, and confidentiality. Offering various cool features, it has the potential to solve many challenges of banking and financial organizations.