If you are new to Quorum Blockchain, this article is meant for you that illustrates what are the features and how it is revolutionizing Finance and Finetech domain.
Learning of Blog
- Why Quorum is so much in demand
- How Quorum is Revolutionizing Finance and Fintech
Motivated by established Ethereum blockchain method, Quorum is a new private-permissioned ledger implementation of the Ethereum blockchain, defined as Go implementation of the Ethereum blockchain. It was developed in partnership with J.P. Morgan and EthLab, an Ethereum startup, aiming to improve the finance domain. It is an open-source platform designed to enhance privacy.
This platform allows for the operation of smart contracts that is capable of automating processes based on defined protocols. The private-permissioned ledger has been adapted for financial aids to provide high-grade privacy and performance to the customers.
Why Quorum is so much in demand?
As Quorum is an innovation based on Ethereum, it has much more exceptional added on features than the traditional blockchain technology.
In traditional blockchain technology, transactions are time-consuming as the block is shared all over the network, but if we talk about Quorum, it uses direct means of communication, which lessens the time of broadcasting messages over the entire network. And most importantly, for privacy, Quorum makes use of cryptography to avoid data tampering. Privacy is facilitated in by dividing the massive public ledger into two parts: a public ledger and a private ledger.
Here is a list of some exceptional features that Quorum possesses.
- Quorum does not strictly integrate to one precise consensus algorithm as it uses two algorithms- RAFT and Istanbul-BFT consensus for crash fault tolerance and Byzantine fault tolerance, respectively.
- It provides transaction-level privacy along with network-wide transparency.
- It does not support global data sharing policy
- It possesses a reusability feature, meaning it uses an exciting technology to the greatest extend.
- Provides two-way authorization necessary for creating a permissioned network.
- Supports pluggable architecture where a different consensus implementation can be plugged as per the requirement.
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How Quorum is Revolutionizing Finance and Fintech
The finance sector is prone to errors and frauds that could lead to a crippled money-management system. As we know now, Quorumis Go implementation of Ethereum blockchain, mainly designed to uplift the existing finance sector, let’s see how it is achievable.
Aid in Providing Better Security to the Finance Sector
For data transmission between the nodes, Quorum uses Ethereum P2P protocol and for communication with the transaction manager of another node in the network, or to communicate with the enclave, it uses HTTP messaging protocol. HTTP messaging protocol enhances the security and provides two-way authorization which is crucial for building a permissioned network.
Voting-Based Consensus For a Flawless Transaction
QuorumChain is a voting protocol, where a specific set of nodes are allocated with voting rights. To assign voting rights, it makes use of smart contracts that also track the status of voting nodes in the network. As a replacement of Ethereum’s Proof-of-Work implementation, it uses two consensuses algorithms-RAFT consensus for crash fault tolerance and Istanbul-BFT for Byzantine fault tolerance, which is faster algorithms. Such algorithm provides immediate transaction finality, which makes them a suitable choice for the financial domain.
Keeps the Data Private
Quorum makes use of cryptography to prevent unauthorized parties to see sensitive data except for the connected parties. It involves a single shared blockchain and a combination of smart contract software architecture which provides segmentation of private data. Smart contracts can be set to both- private and public and written using Solidity.
Keeping money safe and secure, it is crucial to secure the transactions, and for that Quorum blockchain ensures data confidentiality. It is designed to provide privacy to financial institutions. It allows parties to transact with one another without making the transactions public to the members of the organization. Quorum divides the large public ledger into two parts- the public ledger, which is visible to all the nodes in the network, while the private ledger that is only visible to the authorized transacting parties.
Sharing on Need-to-know Basis
As Fintech is one of the most regulated industry, it is also the most prone-to-attack field. Quorum blockchain has no unnecessary global data sharing policy which means data is shared only based on the ‘need to share’ with an agreement, rather than sharing globally among the entire network. This eliminates the need to make unauthorized parties a part of the process, thus eliminating the chances of frauds and errors.
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Even though there is a high rate of regulations in the global Fintech industry, different consortium and institutions have started taking united steps towards blockchain adoption.
As we have seen, this is how the Quorum blockchain is becoming an indispensable part for organizations such as banks or financial institutions where data privacy is crucial. Quorum keeps transaction details to remain private and even provide unique services which improve scalability, legal-system compatibility, and algorithmic agility.
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