As businesses are falling in line and implementing the latest blockchain technologies, they have to figure out how to work with regulators on issues of privacy, anonymity and accountability. This is a solution concordium offers by building a blockchain that works to meet with regulatory compliance, allowing regulators to override privacy protocols and track illegal transactions.
In this article, we are going to dive into understanding this Concordium blockchain that is trying to solve the blockchain quadrilemma of scalability, security, decentralization, and regulation, and learn all we need to know about the blockchain.
What is Concordium blockchain?
Concordium is a blockchain developed with businesses in mind. Its target is to balance privacy, anonymity with accountability to comply with regulatory oversight.
Businesses recognize the role of blockchain technology in the future of the world economy but without trust that comes with data privacy, transaction security and partners accountability, the economy will decline. Regulatory bodies help in instilling trust between businesses and not complying with regulations can affect business models’ viability.
Responsible for creating Concordium back in 2018, Lars Christensen is co-founder of Saxo Bank, the Danish investment bank that specializes in online trading. He states that the company’s goal is to make blockchain-tech potential available to all businesses and make their efforts fully compliant with regulations. In line with that goal, Christensen partners with leading figures in the crypto and financial sectors, getting professors from the Aarhus University and ETH Zurich to work on Concordium’s whitepaper, and also setting up Concordium Blockchain Research Center Aarhus (COBRA)- committed to support leading blockchain research and the development community.
To support regulatory compliance, Concordium blockchain is the first to provide Layer 1 identification at the protocol level with advanced privacy algorithms to maintain anonymity, but with a privacy revoker function to verify participants’ identities.
What is a Privacy Revoker?
Privacy/Anonymity revoking is an identity disclosure mechanism that is Concordium’s solution which can be triggered by a regulator. Every account on the Concordium blockchain can be traced back to its originator through an identity object (issued by a third-party identity issuer) and regulators must obtain a court order to trigger an anonymity revoker.
Identity issuers and anonymity revokers can only work together as each on their own cannot reveal the identity of the owner of the account.
As stated by Concordium team- an anonymity revoker is an organization that has legal rights in a specific jurisdiction. There is a publicly visible registry of anonymity revokers that is curated by the Concordium Foundation.
What is the Concordium foundation?
This is a Swiss-based non-profit responsible for supporting the Concordium network, governing the Concordium blockchain and making sure that further development will be done in a correct manner in alignment with organizational goals.
The Foundation receives 10% of CCDs minted on the Concordium blockchain and a portion of the transaction fees to sustain it.
How does Concordium blockchain technology work?
A privacy algorithm called zero-knowledge proofs (ZKPs) adopted by blockchain applications, enables confirmation of personal information without revealing the actual data input. Read on Zero-Knowledge here.
Concordium is a layer 1 blockchain that uses proof of stake mechanism to function. Layer 1 blockchain is one that sets out solutions for protocols that greatly improves a network’s scalability.
This ID-centric blockchain technology uses a dual consensus system with two actors- bakers and finalizers.
Bakers are operators processing the transactions with Nakamoto Style PoS mechanism. They participate in lotteries to win the right to produce a block in exchange for a share of the transactions fees, chances of winning is dependent on the amount of $CCD the Baker has staked.
Finalizers are a set of socialized bakers that run transaction finalization using a Byzantine fault tolerant agreement.
Concordium Blockchain: Native coin
CCD, the native coin of the Concordium blockchain is used for paying transaction fees, staking, rewards for node operators, and as a collateral medium for Concordium’s DeFi landscape.
Necessary to incentivize the development, support, and security of the Concordium network, the CCD is built to be compliant and business friendly.
Minting of CCD is done at a public verifiable rate. On staking, anyone with more than 14k CCD can bake it for baking rewards. If one doesn’t wish to be a Baker but still wants to earn rewards, they can delegate their CCD to a baking pool; a passive delegation; a third party staking service provider. Who is a Baker? One that runs the Concordium consensus algorithm on their computer,orders the transactions submitted to the chain, and builds the chain block by block. A Baker is rewarded with CCD- newly minted and part of the transaction fees.
The top cryptocurrency exchanges for trading in Concordium stock are currently MEXC, KuCoin, Bitfinex, AscendEX (BitMax), and BitGlobal.
Trades (day of writing- 30th November) at $0.008703 USD with a 24-hour trading volume of $1,015,117 USD and down 0.30% in the last 24 hours, unavailable market cap, circulating and max. supply. The current CoinMarketCap ranking is #2748, according to the CoinMarketCap website.
Concordium Blockchain:Features of Concordium
Corcodium has several features of which the identity Layer makes it unique. The following features are also the benefit of this blockchain;
Stable Transaction Fees
Transaction costs are based on the fluctuation of real-life fiat currencies.
Concordium developed a stabilized transaction fee mechanism attached to the Euro, in order to keep the price and operating costs low and predictable. This allows firms to develop and operate viable business models, in accordance with Concordium set objectives.
Energy-saving Proof of Stake
Running a node on Concordium uses energy that is far less than the majority of other platforms using the PoW consensus mechanism- at a time where several environmental regulatory issues have been raised on the amount of energy that mining uses.
Scalability with Sharding
Sharding is a database partitioning method that allows a blockchain’s network to process more transactions per second, thereby increasing/improving scalability.
Concordium Sharding uses both Control Chain and fast Finalization layer to ensure that supply is always higher than demand. Extra shards are automatically started as traffic increases in the network.
With an average of 11 seconds to finality, this blockchain can be deemed to have a fast finality.
The Concordium finalization approach removes the risk of a block being rolled back by efficiently adding blocks using NSC. The finalization layer ensures blocks are quickly and securely declared final.
The Identity Layer is made up of users, trusted identity issuers, the Foundation, and revokers.
Concordium offers an innovative layer 1 blockchain with identity features built into its protocol, this allows transactions carried out on the network to have an ID stamp that is entirely encrypted. To protect and respect data privacy, the data can only be decrypted with court order by a third-party.
Concordium balances privacy with accountability with this layer and this is what makes the blockchain unique, standing to meet the needs of businesses- a trusted public chain with the benefit of a private one.
Different business sectors have supported regulated decentralized finance by making official their intention to build on Concordium since the mainnet launched in June 2021. By the end of the year, over 200 nodes were operating, with over 2,000 accounts registering per day, putting this blockchain as a leader in the business blockchain market.
Concordium will not be a go-to blockchain for dark web activities but will always be the option for those that wish to future-proof their businesses and ensure they comply with regulatory jurisdictions globally.
It is a blockchain that has started solving even future regulatory issues.