If you’re new to the crypto world, you might be asking yourself, “What is blockchain?” or “What are the different types of blockchain?”Today we are going to discuss Blockchain technology as one of the most exciting and powerful emerging technologies in the world today.
It is a decentralized, encrypted, secure, and distributed ledger that is useful to record transactions across many organizations, entities, and individuals.
Blockchain allows the existence of digital currency, like Bitcoin, and it is changing the world of finance, banking, and many other industries.
When it comes to cryptocurrency and its impact on the economy, blockchain technology is the most important.
This article will cover the basics of blockchain, the types of blockchain, the features of blockchain technology, and the differences between public and private blockchain networks.
Blockchain technology is an innovative technology that can be useful for a variety of purposes.
It is changing the way businesses operate.
The distributed nature of blockchain technology is what makes the technology so powerful.
For example, blockchain technology can be useful to track where a product is at any point in time.
This is not a feature blockchain technology has to offer, but because it is decentralized, it is extremely easy to implement.
Additionally, blockchain technology can be useful to handle trust and safety.
This means that any business can use blockchain technology to ensure that their customers are safe and that their business is legitimate.
There are 4 types of blockchain technology out there right now.
They are namely private blockchain, public blockchain, Permissioned blockchain, and Consortium blockchain.
You can choose which type of blockchain you want to use based on what you need it for.
This article will guide you through all the differences between these 4 types of blockchain technology and the different uses they serve.
The 4 Types of Blockchain Technology
- Private Blockchain.
- Public Blockchain.
- Permissioned Blockchain.
- Consortium Blockchain
1. Private Blockchain
A private blockchain network is a blockchain network that is not open to the public.
The private blockchain network is typically useful for a business or organization.
It is to maintain a decentralized ledger that is accessible to those who need to access it.
Private blockchain networks are not available to the public and are not shared.
In contrast to public networks, private blockchain networks are not visible or accessible outside of the organization.
These types of blockchains ie Private networks typically offer better security, privacy, and control for the business or organization that is using them.
Privacy is becoming a very important issue in the world of business.
The rise of social media and the internet, in general, has caused a lot of organizations to fear that their competitors will be able to get their hands on any of their data.
This can have a major impact on their business and reputation. Organizations need to keep their information safe, and they have the right to do so.
In order to protect their private information, organizations need to use data protection tools.
Pros and Cons of Private Blockchain
|Quicker than other blockchain networks||Risky for smaller organizations|
|Tighter in security||Less number of participants can collapse the entire network|
|Minimum change of hacking|
|One company is entirely in charge of the network|
What are the Examples of Private Blockchain?
Examples of Private Blockchain are
2. Public Blockchain
The world has been experiencing rapid developments in technology. It is no surprise that there’s a growing need for new and innovative solutions.
A public blockchain is a type of open software architecture that decentralizes and functions without the need for a central server or authority.
These types of blockchain platforms gain traction because it is useful for currency transfer, tracking ownership of digital assets, and facilitating transactions.
Public Blockchain is the most common type of blockchain. They allow anyone in the network to access records and transactions stored in a block.
There are two parties to a transaction, the sender and the receiver. The sender’s public key is useful to encrypt the transaction.
Also, this is done using the sender’s private key and kept secret. The receiver’s public key is also useful to decrypt the transaction.
A public blockchain network is a system where anyone can join and participate.
It is a type of blockchain network that does not require a central authority to maintain its security.
Today, the most commonly used public blockchain networks are Bitcoin and Ethereum.
However, the technology behind public blockchains is not just limited to Bitcoin and Ethereum.
Public blockchains have the potential to apply to a variety of different areas, from finance to health care.
Pros and Cons of Public Blockchain
|Multiple nodes are linked together, adding an extra layer of security||The more nodes, the more time it takes to verify transactions|
|Every transaction comes with transparency||There is a risk of hackers|
|Public blockchains like bitcoin are safe, but a less decentralized network would be risky.|
What are the Examples of Public Blockchain?
Examples of Public Blockchain are
3. Permissioned Blockchain
A permissioned blockchain is a type of decentralized blockchain that is accessed by a certain group of people.
These types of blockchains are also called a hybrid of a private blockchain and a public blockchain.
In a permissioned blockchain network, users can control who can get access to what information.
Not every data that goes on the blockchain is made public.
This is different from a public blockchain network because the network is not open to the entire world.
In a private blockchain network, there is a private blockchain that uses a central authority.
This is different from a public blockchain which is the main blockchain.
A permissioned blockchain is a blockchain that has been modified to allow only certain people to join.
The permissions are usually given by an administrator of the network, and users who have permission to join the network are usually verified and have a certain role on the network.
Pros and Cons of Permissioned Blockchain
|They are resistant to 51% of hacker attacks||It does not provide incentives for network participation|
|This is a high-performing network||There are issues with transparency|
|They are scalable and cost-effective|
What are the examples of a permissioned blockchain?
An example of a permissioned blockchain is Dragonchain
4. Consortium Blockchain
Blockchain technology is revolutionary in that it allows for a decentralized network of computers to store and distribute information without the need for a middleman.
This has led to the rise of blockchain networks, which have private blockchains with a single authority, such as Bitcoin.
However, there are other blockchains that are not private, and they are called consortium blockchains.
As the name suggests, these types of blockchains are networks that have more than one authority.
This is important because it means that these networks aren’t just for a single company but for a group of companies, which makes it, unlike a private blockchain network with only one authority.
The consortium blockchain network is a type of blockchain network where more than one company is involved.
This type of blockchain network can be a public or private blockchain.
There are various benefits to using a consortium blockchain network over an open blockchain one.
One of the benefits is that it is useful to carry out transactions, exchange information, or even do crypto mining.
A lot of government organizations or banks use a consortium blockchain network.
Pros and Cons of Consortium Blockchain
|They are faster than public blockchain||There is a lack of transparency|
|And offer control to more authorities than a private blockchain||Nodes can get compromised and risk the collapse of the entire network|
|It does not provide incentives for network participation|
What are the Examples of Consortium Blockchains?
Examples of Consortium blockchains are Energy Web Foundation and R3
Features of Blockchain Technology
- Fast transactions.
Blockchain transactions are the answer to the problems of the current financial system.
They are completely secure and tamper-proof because of their decentralized nature.
Blockchain transactions are also fast, affordable, and consistent because they are able to process a large number of transactions in a short amount of time.
Blockchain transactions are an easy and fast way to transfer and receive assets and digital assets.
They are delivered straight from the sender to the receiver, eliminating the need for one or more intermediaries.
This technology can help to improve both the speed and cost of digital transactions.
Blockchain transactions are also consistent, meaning that there are no middlemen, banks, or other institutions involved to arbitrarily withhold transactions.
They operate around the world, 24 hours a day, seven days a week.
This decentralized model is much less expensive to operate because there is no rent-seeking middleman to take a slice of the blockchain network’s profits.
Blockchain networks are secure because the data held within them cannot be altered once a block is completed, making it nearly impossible to hack or corrupt the network.
For example, when a block is completed, the blockchain network will make sure it is verified and then added to the chain.
This process is called mining, and the nodes that do the verification and mining are called miners.
The more miners that are added to the network, the more difficult it is to hack.
This new revolutionary technology makes it impossible for any individual to alter past transactions that have been recorded and cannot be changed.
Also, this transparency has its benefits as well as its disadvantages as there is no way for an individual to protect any personal information.
For example, there is no way to alter information that is time-stamped to the ledger.
What are the Differences between Public and Private Blockchain Networks?
To know the differences between public and private blockchain networks we need to compare them.
|Comparison||Public Blockchain||Private Blockchain|
|Authority||Decentralized||Can be Centralized|
|Transactions per second||Less||More|
|Access||Public and can be accessed by everyone||Entry by Invitation due to Permissioned network|
|Native Token||Available||Not necessary|
|Risks||High risk.Fraud.||No Risk|
What is the Difference between Blockchain and Cryptocurrency?
In today’s world, it is difficult for many people to wrap their heads around the concepts of blockchain and cryptocurrency.
The terms are often useful if they are interchangeable, and this has left a lot of people confused about what the differences are.
Also, If you are one of those people, you’ve come to the right place!
One simple example is the relationship between the application on your phone (Whatsapp or Uber) and the application platform on which your phone is running. (IOS or Android).
Blockchain is a platform, on which each cryptocurrency runs. The technology is most widely known for its use in Bitcoin.
Actually, the confusion was because both blockchain and cryptocurrency were launched at the same time.
Read this too- Blockchain| What is it and how can it be used to build decentralized applications?
We hope you enjoyed our blog about the different types of blockchains that are available out there.
Many people were scratching their heads about what blockchain actually is, how it works, and what it does.
We hope we provided some important ideas on different types of blockchain.
It’s not easy to decide on which type of blockchain best suits your needs, but we hope this article helps you make an informed decision. Please let us know if you have any questions.
We would love to hear from you! Thank you for reading, we are always excited when one of our posts is able to provide useful information on a topic like this!