Exploring the 4 Types of Blockchain Technology

Blockchain technology offers decentralisation, enhanced security, faster settlements, and immutability.
The technology became popular through bitcoin.
The four main types of blockchain networks are private blockchain, public blockchain, hybrid blockchain, and consortium blockchain.

Private Blockchain

What is a Private Blockchain?

A private blockchain is a permissioned blockchain and partial decentralised system where only a single organisation has access and authority over the network.
In other words, anyone who wants to join it must ask for permission from the governing body of the blockchain, and the public people cannot access it.

A private blockchain entails invitation and only the individuals taking part in a transaction can know about it. Anyone who is managing a private blockchain network can change or edit any transactions according to their needs.
Private blockchains enable various levels that determine which users can write, read and audit the blockchain. In private blockhain platforms, users get rules that other platforms do not get. Therefore, all the nodes have to abide by some regulations to make sure that a company flows properly.

However, a private blockchain consumes much energy and power and is more vulnerable to risks, hacks, and data breaches or manipulation. It is easy for bad actors to imperil the whole network.

In private blockchain platforms, the entries can be changed by the owner and organisations utilise the distributed ledger technology, however, they do not publicise their data. Private blockchain entails each user to have a substantiated identity since that characterises the type of access they have. These are renowned enterprise solutions that enable administering the resources and actions that everyone conducts. They allow faster transactions and are more energy-efficient to maintain.

In addition, as enterprises entail privacy, private blockchain use cases seems an ideal fit in this case. Without real privacy, their competition can enter the platforms and disclose priceless information to the press. This can influence the brand value immensely in the long run.

Private Blockchain Features

• Full Privacy
• High efficiency
• Stability
• Low fee

Public Blockchain

What is a Public Blockchain?

A public blockchain is a blockchain network with no restrictions which means that anyone can join it whenever they want. Anyone can see the ledger and get involved in the consensus process.

You just need an Internet connection to join the network and start validating blocks and sending transactions. Generally, this network offers inducement for users who validates the blocks. For instance, Bitcoin and Ethereum are examples of public blockchain networks.

A public blockchain network utilises proof of work or proof of stake consensus algorithms for validating the transactions. In public blockchain architecture, you can download the protocol anytime, and the blockchain is permissionless which means you do not need any permission from anyone to join and interact with the network; anyone can read, write, or take part within the blockchain.

The public blockchains characterise the perfect model that makes the tech industry so profitable. A public blockchain is decentralised and does not have a single entity which runs the network. Moreover, data on a public blockchain are secure as it is impossible to modify or change data once they have been validated on the blockchain.

Features of Public Blockchain

• In a public blockchain, anyone can participate by checking and adding data to the blockchain.
• A public blockchain is decentralised.
• The order of magnitude of a public blockchain is lighter than that of a private blockchain and generates transactional throughput.
• Transactions per second are lesser in a public blockchain when compared to private blockchains.
• A public network is more secure as it is decentralised and includes active participation.
• In a public blockchain, it is required to grant access to a centralised authority to supervise the whole network.

Hybrid Blockchain

What is a Hybrid Blockchain?

A hybrid blockchain is a unique type of blockchain technology that amalgamates components of both public and private blockchain or tries to utilise the ideal part of both public and private blockchain solutions.

Transactions and records in a hybrid blockchain are made private but can be verified when entailed, such as by enabling access through a smart contract. Private information is kept inside the network but is still verifiable.

Although a private entity may own the hybrid blockchain, it cannot change transactions. A hybrid blockchain allows organisations to establish a private, permission-based system beside a public permissionless system, enabling them to administer who can access particular data strored in the blockchain, and which data will be made public.

When a user joins a hybrid blockchain, they have complete access to the network. the user’s identity is secured and protected from other users, unless they take part in a transaction. Then, their identity is divulged to the other party.

Benefits of a Hybrid Blockchain

A hybrid blockchain protects privacy but enables communication with third parties. External hackers cannot mount a 51% attack on the network because hybrid blockchain operates within a closed ecosystem.

Transactions in a hybrid blockchain are cheap and fast, and the blockchain generates better scalability than a public blockchain network. Transactions are cheap because the hybrid blockchain entails few nodes to verify them.

The most powerful nodes in the network facilitate the verification of the transaction, which may take much more nodes in the public blockchain. The transaction fees can diminish to as little as 0.01$ per transaction.

The hybrid blockchain architecture is distinct from the fact that they are private but still generates integrity, security, and transparency. Withal, it can be fully customised.

The hybrid blockchain members can chose the participants in the blockchain or decide which transactions can be made public. This guarantees that a company can operate with its shareholders excellently.

Hybrid blockchain Use Cases

• Hybrid IoT
• Global finance and trade
• Banking
• Supply chain
• Governments
• Enterprise services

Consortium Blockchain

What is a Consortium Blockchain?

Consortium blockchain is a permissioned blockchain technology whereby several organisations run the platform.
It is quite similar to the private blockchain. In private blockchain, there is only a single organization on the platform, while in consortium blockchain, multiple organizations govern the platform.

Consortium blockchain allows new users to join the established structure and share information instead of making a fresh start.

Consortium blockchain assist organizations in finding solutions together and saving time and development costs.

Benefits of a Consortium Blockchain

• Validation: The number of participants in the consortium blockchain is known and verified.
• Control: Instead of a sole entity, a specific group of authentic participants governs the blockchain platform.
• Security: The information on the authentic blocks is private.
• Economic: consortium blockchain charges no service or transaction fee in the consortium setting.
• Flexibility: The involvement of several validators in other blockchains leads to reciprocal consensus and synchronization issues.

 

 

Source : medium.datadriveninvestor.com

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