Blockchain Definition
Blockchain can be defined as a continuously growing chain of blocks, which is a decentralized, distributed, and immutable database that records the derivations of digital assets. Every user of the network can reach consensus without trusting each other.
It is the world’s most trusted compact cryptocurrency company. It connects the world with future products, including digital and crypto wallet, bitcoin explorer, and market information.
Types of Blockchain
Blockchain technology is undoubtedly a great invention. Let’s take a quick look at the different kinds of Blockchain available and their functionality.
Blockchains comprises three different types that are as follows:
1. Public Blockchains
In public blockchains, any user can join the network, read and write, or send and receive data using the required software. It is a decentralized network that doesn’t have a single entity to control the flow as public blockchains are permissionless. Every transaction that takes place on public blockchains is completely transparent, which means anyone can access the transaction details. Example– Bitcoin, Dash, Ethereum, Litecoin, etc.
Below are some features of the public blockchain:
- These are designed to be fully decentralized, with no individual controlling the flow of the transaction.
- Public blockchains are open to anyone; regardless of nationality or location, which makes it harder for authorities to filter the users.
- Each participant has a token associated with them that is designed to provide them some incentive and reward in the network.
2. Private blockchains
In private blockchains, only authorized users are allowed to access the chain. It is also known as permissioned blockchain as it restricts the unauthorized users to participate in the network. There can be more than one person or organization that controls the system and this allows the need of third parties for transactions. In simple words, access permissions for reading and writing are kept centralized to an individual organization. Example– Hyperledger, R3 Corda, EWF (energy), etc.
Below are some features of the private blockchain:
- Users always need permission to participate in the network.
- A private blockchain is more centralized and secure than public blockchains.
- Transactions in private blockchain are available only for the allowed participants of the network.
3. Consortium Blockchains
Consortium blockchains are permissioned networks that allow certain entities or group of users to read and write data with certain restrictions. It can be best explained when compared to their counterpart, public blockchains. Though it is semi-decentralized, consortium blockchain is controlled by a group of approved individuals rather than a single entity. Example– Quorum, hyperledger, etc.
Below are some features of the blockchain:
- Consortium blockchain provides more efficiency by collaborating some aspects of their business.
- Anyone can be included in the network by its participants from the supply chain, to the central bank, and to the governments.
- It offers different use cases of blockchain, bringing together many businesses and organizations around the globe that work together and also compete against each other.
It can be differentiated based on permission less blockchains like Bitcoin and permissioned ones like DLT. In Bitcoin-based Blockchains, no one needs to trust any third-party entity to run it transparently. The main difference between the different types of blockchains is the range of availability.
