If it issues coins, it’s a public chain; if it doesn’t, it’s a consortium chain.
Since I often dismiss consortium chains, a natural question arises: What exactly is a consortium chain? What is the fundamental difference between a public chain and a consortium chain, and where is the dividing line? I thought this was a simple question, but after careful consideration, it’s not so straightforward and not particularly easy to define clearly.
Simply put, a blockchain that is open for everyone to access and use is a public chain, while a blockchain used within a small range is a consortium chain. This distinction is like the difference between the internet and a local area network. But if a consortium chain is opened up for everyone to use, does it become a public chain? If the chain uses the original version of PBFT as its consensus mechanism, it remains a consortium chain. The distinction between public and consortium chains cannot be solely based on the size of the user group.
For example, there’s a subjective issue: what constitutes “everyone”? How large a range counts as everyone? If there are 100 people, then 100 people are everyone; does 99 count? In real life, it seems so. A chain used by 99 people cannot be said to be a consortium chain. What about 80 people? It also seems to count as a majority compared to a small group of 20 people. And 60 people? It exceeds half; can it represent everyone?
So how do you determine if a chain is a public or a consortium chain? After some thought, from a technical perspective, I believe that to be considered a public chain, the following three conditions must be met simultaneously:
You may notice that in the short version, issuing cryptocurrency is used as the only indicator to distinguish public and consortium chains, while in the detailed version, cryptocurrency is not mentioned. This is mainly due to different evaluation dimensions. Issuing cryptocurrency is a usage pattern reflected in the entire system, while the three conditions listed above are more general technical features. A chain that meets the three conditions without issuing cryptocurrency can still be considered a public chain. However, cryptocurrency is an important incentive for miners and is generally an indispensable part of the system, so project teams usually design it into the system.
This requires that nodes cannot set access permissions at the network level; anyone can access the nodes through the internet. If nodes are not deployed on the public network but run in a local area network, they do not belong to the public chain. If nodes are deployed on the public network but are limited to specified IP addresses for access and use, these nodes have set access permissions and are not open enough. If all nodes have similar settings, the entire chain is not considered a public chain.
For example, in PoW, as long as the computational power is sufficient, one is recognized as a block-producing node. In PoS, as long as 32 ETH is staked, there is a chance to become a block-producing node. These are typical examples of public chains. In the original version of PBFT, block-producing nodes are fixed and cannot be changed, which belongs to consortium chains. Some chains add random consensus group changes on top of PBFT, randomly selecting nodes as consensus nodes responsible for block production at intervals. Chains with this design are public chains, though project teams need to consider the safety, fault tolerance, and risk of Sybil attacks of such approaches.
Reasonableness is subjective and hard to quantify, requiring balance in project design. For example, in PoW, acquiring sufficient computational power to produce blocks has a high cost, which is the threshold. If the threshold is too low, nodes will easily produce blocks, causing chaos in the network. If the threshold is too high, no one can reach it, and blocks cannot be produced, which is also unsuitable. This threshold needs a balanced, appropriate position. In some PBFT consortium chains, becoming a block-producing node requires a CA-issued certificate controlled by the project team, requiring offline certification processes to join the consortium and obtain the certificate. This is a typical example of a consortium chain.
Technically, blockchain has a rebellious spirit, advocating for decentralized technology with a self-contained system. Since centralized institutions are unreliable, we operate independently, first trusting ourselves, then others. In this mode, the accuracy of historical records is very high. Currently, only blockchain systems can achieve global data consistency.
In terms of asset attributes, cryptocurrency is highly resistant to geopolitical changes. You can easily hold currency assets pegged to world currencies, unaffected by local currency value fluctuations.
Many domestic consortium chain projects are government-led information technology initiatives funded by the government. For instance, in a Xiongan New Area information platform project worth 20 million yuan, various technologies like AI, big data, IoT are involved, with blockchain being one aspect. Specifically, the blockchain portion might be 3 million yuan. This 3 million is not something small companies can easily secure, often requiring strong connections, like large outsourcing firms. The blockchain part includes many small components, such as a data management platform for a department, integrating blockchain for data on-chain. If the large outsourcing firm lacks blockchain development capabilities, it might subcontract 300,000 yuan to a specialized blockchain company to complete this function. The consortium chain development company ends up earning modestly, hoping to secure more projects in a year for better earnings.
These projects usually follow a bidding process, entangling multiple interests even in securing the project. The company’s overall strength is scored, including patent applications and past revenue capabilities. These projects have nothing to do with the blockchain ideology. If replaced with another term like 5G technology, the project process remains the same: bidding, project delivery, differing only in the specific technology used. That’s why I say consortium chains are not true blockchains; they use golden hoes to plow the fields.