Quorum was developed on Ethereum with financial institutions in mind. Unique to this technology are four key capabilities that distinguish it from the standard blockchain technologies:
· Communication Encryption
· Alternative Consensus Mechanisms
· Entity or Peer-Permissioned
· Increased Processing Speed
By design, institutions dealing with financial transactions require both privacy and large transaction volume processing capacity. These requirements are translated into the aforementioned key attributes in Ethereum’s Quorum, making it ideally suited for the finance industry.
With Quorum, the communication paradigm is similar to standard blockchain technologies, except that the peer communication is encrypted over a TLS connection and then decrypted at the endpoints. This protocol enhances the confidentiality of each transaction. These private transactions are then verified by nodes to confirm authenticity.
Alternative Consensus Mechanisms
Ethereum allows for alternative methods of reaching consensus including “Raft” and “Istanbul or Practical Byzantine Fault Tolerance” (IBFT or PBFT). These more strict verification methods enhance the security of trades throughout the blockchain.
Entity or Peer-Permissioned
To further enhance the security of the transactions, Quorum on Ethereum allows for a privatization of the system. In other words, only entities that are pre-approved to join the blockchain can transact and verify on the blockchain. This greatly diminishes the to chance for “bad actors” to join the blockchain and push the blockchain toward an incorrect answer. This security measure is called a private peer-permissioned blockchain. Quorum is designed to be permissioned, meaning that networks using Quorum will be accessible only to designated and pre-approved participants. This creates another level of security within Ethereum.
Increased Processing Speed
Quorum also solves the longstanding challenge, inherently associated with the financial industry, of processing large transaction volumes quickly and efficiently. With much higher speeds than the traditional standard Ethereum or Bitcoin rates, Quorum can easily process hundreds of transactions per second, removing another key constraint associated with the use of blockchain technologies in the financial arena.