If you have been following the latest updates in the blockchain space, you would have heard of quorum blockchain, an upcoming open-source project that JP Morgan is bringing to the financial industry. Blockchain technology has been one of the most groundbreaking innovations in the past decade. It has garnered the undivided attention of businesses all around the world due to the myriad benefits it offers. Most emerging sectors are constantly bombarded with new developments, and the blockchain sector is no different.
So, how is quorum blockchain different from other platforms? Let’s explore and understand how this new development can potentially revolutionize the financial sector as a whole.
What is quorum blockchain?
Quorum blockchain is an Ethereum based blockchain, which means that it combines some novel features of Ethereum with some enhancements that cater to business needs. The primary goal of blockchain is to offer a permissioned implementation of Ethereum that supports transactions and contract privacy by modifying the Geth client.
A few primary features are listed as follows:
- Privacy via private transactions: Each user of blockchain will be able to send private transactions that are addressed to a subset of nodes. This is done in such a way that the contents of the transaction are not exposed to non-privy members.
- Peer permissioning: Users can configure networks to enable running in a permissioned mode so that every single node is explicitly listed in an access control list enforced by all nodes. This ensures that foreign nodes will not be able to tap into the network and replicate blocks.
- Flexible consensus: It supports Raft and Istanbul BFT as valid consensus options. Both support transaction finality (i.e. lack of chain forking) and offer shorter block intervals than proof-of-work.
How is quorum blockchain different from Ethereum?
Although Quorum blockchain is derived from Ethereum, both are quite contrastive. A few major points of difference are listed as follows:
- Network and peer permissions management
Quorum blockchain is completely permissionless, which means that it cannot be accessed by the public. Here, only authorized users can join and participate in the network. The platform will have a permissioned chain of individuals in the system and each exchange will occur only between participants who are pre-approved by the concerned authority.
- Enhanced transaction and contract privacy
For banks and other financial institutions, confidentiality of data is always a major priority. With Ethereum, it is impossible to ensure data security. On the other hand, it is permissioned in nature, which makes it an ideal solution for banks. Here, open transactions are similar to Ethereum but all private transactions are completely confidential and none of the data can be accessed by the public. One of the key features which make the Quorum blockchain superior to Ethereum or other blockchain platforms is Constellation, a feature that secures each message sent on the network.
- Voting-based consensus mechanisms
Quorum is based on a voting consensus mechanism that is referred to as QuorumChain. This consensus mechanism functions in a very simple manner by delegating voting rights to others. To assign voting rights, QuorumChain makes use of the smart contract. It not only assigns the voting rights but at the same time, it also tracks the status of all the voting nodes. Quorum transactions include:
- Global Transaction Hash
- Public State root hash
- Block maker’s signature
- Better performance
The speed of transactions is much better than any of its counterparts. Its system can easily suffice more than 100 transactions per second. This is considerably higher than Bitcoin and Ethereum. Hence, it is preferred by most banking and financial institutions. The reason for such high speed is its simple consensus mechanism which allows quicker transactions.
The architecture used in Quorum blockchain
This section will give you a deeper look into how Quorum blockchain works. The network has three primary components-
- Quorum Node: Quorum Node can be considered as a command-line tool. It is a lightweight fork of Geth. The node is forked so that it continues to grow with Geth. Generally, it comes with a lot of different modifications to make it work with Quorum blockchain.
The node includes the following modifications as compared to public geth client:
- The consensus is achieved with RAFT, PoA or Istanbul BFT consensus algorithms instead of using Proof-of-Work. Availability of all these different protocols allows flexibility to choose any of these algorithms according to business needs.
- The Peer to Peer (P2P) layer has been modified to only allow connections to/from permissioned nodes.
- The block generation logic has been modified to replace the ‘global state root’ check with a new ‘global public state root’.
- The State Patricia trie has been split into two: a public state trie and a private state trie.
- The block validation logic has been modified to replace the ‘global state root’ in the block header with the ‘global public state root’
- Block validation logic has been modified to handle ‘Private Transactions’
- Transaction creation has been modified to allow for Transaction data to be replaced by hashes of the encrypted payloads in order to preserve private data where required
- The pricing of Gas has been removed, although the Gas itself remains.
- Transaction Manager: The Transaction Manager is responsible for the privacy of transactions and makes sure that the transaction data is always encrypted during the process. To facilitate the whole process, it can store, allow access and other important data to facilitate the transactions. However, it doesn’t have access to any sensitive information such as private keys.
- Enclave: Enclave facilitates different cryptographic techniques such as participant authentication, transaction history, and other key functions. It ensures that all the operations are performed optimally with focus on scalability. Transaction Manager delegates the encryption/decryption job to Enclave.
Some of the primary operations that an enclave performs include:
- Fetching the default identity for attached nodes (default public key)
- Providing forwarding keys for all transactions
- Returning all public keys managed by the enclave
- Encrypting a payload for given sender and recipient(s)
- Encrypting raw payloads for a given sender
- Decrypting transactions for a given recipient (or sender)
- Adding new recipients for existing payloads
Use cases for Quorum blockchain
It has many applications in various industries. Some of the primary ones are listed as follows:
- Tokenised cash: It can keep record of various cash movements
- Marketplace for Loans: Can act as a decentralised marketplace for loans
- Proxy voting: Can improve AGM voting transparency between issues and investors
- Post trade processing platform: It can be used as a post trade processing platform for oil trading.
- Supply chain tracking: It can enable authorities to prove the authenticity of high priced goods by acting as a cryptographic provenance platform.
- Physical tracking: Tracking of items like gold bars and registration of title deeds can be carried out.
- Mediledger — Counterfeit medicine detection is also developed using Quorum.
It would suffice to say that a user of Quorum blockchain can easily expect better performance when compared to its counterparts. It provides enhanced enterprise oriented access control and privacy. The fact that it is a “soft-fork” of Ethereum also makes it much easier for real-world implementation.