Quorum blockchain development

The adoption of blockchain technology is growing in the business world, with the financial, insurance and banking sectors at the forefront of this growth. Several private blockchain platforms are actively serving this lucrative market segment. The financial industry is currently dominated by two private blockchain platforms: Corda by R3 and Quorum by ConsenSys. While Corda is the undisputed market leader in finance, insurance, and banking, Quorum has become a serious competitor thanks to its Ethereum-based functionality.

Quorum is an open source framework created by JPMorgan and used today in a large number of consortium blockchain projects. Quorum is completely built on the Ethereum architecture and is essentially a fork of the geth client. The functionality of Quorum mimics much of Ethereum, but with numerous additions/improvements that make Quorum suitable for business use.

Quorum offers companies a high performance private blockchain that borrows some of the best features from its parent blockchain, Ethereum. This includes Ethereum security standards, code compatibility, and shared tokens. One of the main strengths of Quorum is a set of enterprise applications that simplify the complex tasks of blockchain development.

Based on Ethereum, Quorum has many advantages related to the popularity and wide adoption of Ethereum. For example, the language used to develop smart contracts on Quorum is Solidity, the actual programming language chosen on Ethereum. Since many blockchain developers are already familiar with Solidity, a company implementing Quorum will have no shortage of programming skills to access it.

Another benefit of using Ethereum is tokenization. Like other private blockchains, Quorum allows companies to create their own tokens and coins. Quorum-based tokens and coins are automatically compatible with the widely used Ethereum token standards.

There are three main differences from the standard Ethereum protocol:

• confidential transactions;
• new consensus mechanisms;
• performance.

The main difference and functionality of Quorum is improved work with confidential data. Now, every transaction that you can send to the network has a new privateFor field, which ensures that no one except the recipient specified there can decrypt the data of the transaction or smart contract.

This functionality opens up a lot of opportunities for creating business processes with built-in auditing and privacy at the same time. For example, you can make a budgeting system for a corporation that, on the one hand, does not disclose data to external observers, and at the same time, on the other hand, can prove to the auditor or internal financial service the target spending of each transaction in the blockchain unchanged.Consensus

In blockchain networks with a limited number of participants, it makes no sense to use non-productive and fully distributed types of consensus, like Proof-of-Work and Proof-of-Stake. This gives a complete guarantee of independence from the number of participants in public networks, but always increases the cost of conducting and storing transactions: it is one thing to store a transaction on ten corporate nodes, and quite another  – on hundreds of thousands of nodes around the world, as in Bitcoin and Ethereum. Instead, a consensus based on the voting of the nodes under the general name BFT is applied.

For consortium networks, Quorum supports two types of consensus: Istambul BFT (IBFT, a variant of PBFT) and RAFT. Both consensuses ensure fast cooperation of nodes in a closed permissioned network and the finality of transactions.

The main objective of these mechanisms is the simplicity and reliability of the formation of closed networks, which at the same time fully preserve the main properties of private blockchains – immutability, verifiability, and traceability of data.

One of the distinguishing features of any private blockchains is always the speed of operation, expressed in the number of transactions per second. This directly depends on the consensus method used in a particular network, as well as the number of individual nodes.

The stress test of the Quorum network has shown an average of 100 to 140 transactions per second. This is about 9 times higher than the bandwidth of the public Ethereum network.
Because Quorum allows for private networks that can vary greatly in the number of participating nodes and other technical configurations, and offers a high degree of customization, it’s difficult to pinpoint typical Quorum transaction speeds. Many use cases report speeds of around 200 transactions per second.

Of course, public (or permisionless) blockchains compensate for bandwidth with the reliability and immutability of data, but for cases that do not require publicity, Quorum allows onchaining much more business processes using the Ethereum architecture that is familiar and understandable to developers.

Quorum’s current owner, ConsenSys, has built a number of enterprise applications on the platform to help companies quickly integrate the technology. Applications are primarily aimed at the financial industries, an area where Quorum has found the most active use. Some of the cross-enterprise applications include:

Tessera Private Transaction Manager. This app is designed to make creating and managing private transactions on Quorum as easy as possible. It is open source and written in Java, a popular language with a large developer base, making it easy for companies to set up and maintain the application. Given that the main reason many companies adopt private blockchains is data privacy, Tessera PTM is an essential application that companies will benefit from when implementing Quorum.

Codefi payments. This application allows companies to easily create digital payment systems. Companies can issue their own digital tokens and create inter-organizational B2B settlement networks. Building a digital payment system from scratch can be a complex programming task. Codefi Payments is a turnkey solution that can be used to create such a system in minutes.

Codefi workflow. The Workflow application facilitates the rapid creation and deployment of an inter-organizational network with simplified common business processes. This is a useful application for companies that want to streamline a complex supply chain, such as in the retail sector.  Another use case for the application is to simplify the complex handling of claims.

Codefi Orchestrate. Building a fully functional blockchain network, especially with multiple organizations involved, can be a resource-intensive task. It is necessary to attract a large team of developers, architects, project managers, blockchain security managers and other professionals. This may take months or years, but there will still be functional or security failures.

Codefi Orchestrate is an application that automates the development of key blockchain network components and can literally cut thousands, if not millions, of development efforts.Using Orchestrate, companies can quickly set up all the necessary building blocks of a working blockchain.

Is there a cryptocurrency in the Quorum? Like other large private blockchains, Quorum does not have a platform-wide cryptocurrency. Companies that create their own networks with Quorum permission can create their own crypto tokens or coins. These tokens or currencies are compatible with the Ethereum token standards. Quorum supports the creation of fungible (ERC20 compliant) and non-fungible (ERC721 compliant) tokens.

In 2019, JP Morgan Chase, the then owner of Quorum, launched a currency called JPM to facilitate value transfers between companies using Quorum. JPM is a stablecoin pegged to the US dollar. However, JPM is not publicly available for purchase and can only be used for B2B transfers by companies that hold USD deposits in JP Morgan bank accounts.

Quorum was developed in 2016 by JP Morgan Chase. The banking giant promoted Quorum as the best blockchain solution in the financial industry. Quorum and ConsenSys In 2020, JP Morgan Chase sold Quorum to ConsenSys, a technology and investment company specializing in Ethereum-based solutions. Allegedly, JP Morgan made a “strategic investment” in ConsenSys at the time of the deal.

The size of the investment has not been publicly disclosed. What is ConsenSys? ConsenSys is headquartered in Switzerland with offices in around 30 countries. The company was founded in 2014 by two tech entrepreneurs, Andrew Keyes and Joseph Lubin.

Lubin is not a little-known person in the world of blockchain – he is one of the eight co-founders of Ethereum. Lubin is still involved in the Ethereum project. At ConsenSys, he is the CEO. The company’s other co-founder, Andrew Keyes, left ConsenSys in June 2019 to lead investment firm DARMA Capital. Prior to his departure, Keys led the Global Business Development team at ConsenSys. ConsenSys has raised a total of $75 million in venture capital (VC) across two funding rounds.

In the first round, in June 2019, one of the largest conglomerates in South Korea, SK Group, invested $10 million in the company. During its second major funding round in April 2021, ConsenSys raised $65 million from 16 investors. The investor team included well-known companies such as JP Morgan Chase, MakerDAO, MasterCard and UBS.

The future of the Quorum looks promising. As blockchain technology becomes more widespread in the corporate realm, large private blockchains such as Quorum are only benefiting. The project is backed by some very important companies that act both as investors in Quorum and as its clients. Leading companies that have adopted Quorum include Microsoft, HSBC, ING Group, LVMH, Novartis, and many more.

The only issue that could negatively impact Quorum’s growth in the business arena is the presence of its strong rival R3 Corda. Both Quorum and Corda specialize in the financial sector. So far, Corda has maintained its lead over Quorum in these sectors, and its market dominance helps it control some of the most profitable customers in the industry. However, as the global enterprise blockchain market grows strongly, Quorum is unlikely to miss growth opportunities, regardless of Corda’s presence.