Why A Consortium May Make The Difference For Your Blockchain Solution
Blockchains are all about network effects. You need adoption to derive value from the technology. But you won’t be on your own if you join a consortium. The three largest consortia at the moment are the Enterprise Ethereum Alliance, R3 and Hyperledger.
Consortia combine efforts, pool expertise, reduce costs and mitigate risks to give a blockchain project in a sector the greatest chance of succeeding. They enable private enterprises to explore distributed ledger technologies (DLT) with others who traditionally would have been the competition. In this way, consortia act as facilitators fostering cooperation between like-minded companies who wish to develop blockchain solutions that will be mutually beneficial for their operations. Consortia work to align organisations from a sector onto a single DLT.
Consortia can also help to smooth DLT adoption in a sector through engaging with regulators, central banks and governments. Some government bodies encourage private enterprises to work with consortia as a means for projects keeping within legal and regulatory boundaries.
Blockchain evolution is often compared with that of how TCP/IP led to the internet. With TCP/IP, technological innovation was more important than regulation and adoption. With blockchain, adoption and regulation may be more important than the technology.
In this respect, adoption of blockchains may be limited by the pace of regulatory approval. Consortia may have a fundamental role to play in order to increase awareness, facilitate cooperation and increase the pace of adoption so that their economic benefits can be derived faster.