Types of Blockchain
Types of blockchain
There are 4 types of blockchain:
Public blockchain.
Private blockchain.
Hybrid blockchain.
Consortium blockchain.
1. Public blockchain
These blockchains are completely open based on the idea of decentralization. They don’t have any restrictions. Anyone with a computer and the internet can participate in the network.
As the name suggests, this blockchain is open to the public, which means it is not owned by anyone.
Anyone with internet access and a computer with high-quality hardware can participate in this public blockchain.
All the computers in the network hold copies of other nodes or blocks present in the network
In this public blockchain, we can also verify transactions or records
Advantages:
The algorithm detects no fraud, so it is trustworthy. Participants need not worry about the other nodes in the network
Secure: This blockchain is large in size as it is open to the public. At a large size, there is a greater distribution of records
In addition, it is a secure platform to ensure your transaction is handled properly, you do not have to reveal your identity or name.
Decentralized: There is no single platform that maintains the network, instead every user has a copy of the ledger
Disadvantages:
Processing: The rate of the transaction process is very slow, due to its large size. Verification of each node is a very time-consuming process.
Proof of work consumes a lot of energy. It requires high-quality computer hardware to participate in the network
Acceptance: There is no central authority, so governments are forced to implement the technology faster.
They can be used to replace traditional financial systems because they are secured with proof of work or proof of stake. The more advanced side of this blockchain is the smart contract that enables this blockchain to support decentralization. The Bitcoin and Ethereum blockchains are examples of public blockchains.
2. Private blockchain
These blockchains are not as decentralized as the public blockchain. Only selected nodes can participate in the process, making it more secure than others.
These are not as open as a public blockchain.
They are only available to certain authorized users.
These blockchains are operated in a closed network.
Several people within a company/organization are allowed to participate in this kind of network.
Advantages:
Its small size results in a high transaction rate. Each node's verification takes less time.
We are able to modify the scalability of the system. You can manually set the network size.
As a result of confidentiality concerns, privacy has increased.
Having only a few users access the transaction improves the network's performance.
Disadvantages:
Nodes of this type are limited, so manipulating them is possible. It is more difficult to secure these blockchains.
Since it's centrally managed, trust building is one of its main disadvantages. A company can use this to commit malpractice.
There are only a few nodes in the blockchain system, so if any of them go offline, the whole system can be compromised.
A blockchain can be a great asset to secure information without exposing it to the public eye with proper security and maintenance. In addition to internal audits, voting, and asset management, companies use them to track company assets. There are several types of private blockchains, such as Hyperledger and Corda.
3. Hybrid Blockchain
A mixed blockchain contains parts that are controlled by one organization and parts that are made accessible to the public as a public blockchain.
Public and private blockchains are combined in it.
System permissions are granted and revoked.
Smart contracts provide access to information for users
No transaction can be altered by a primary entity even if it owns a hybrid blockchain
Advantages:
This blockchain is most advantageous due to its hybrid nature. 51% of users are unable to access the network, so it cannot be hacked
Several nodes verify the transaction, which makes transactions inexpensive. Therefore, there is a reduction in computational cost since all the nodes are not involved in verification.
Its architecture is highly customizable while maintaining integrity, security, and transparency.
The operation allows the participant in the blockchain to choose which transaction to make public, as well as which transactions can be made private.
Disadvantages:
Efficiency: Not everyone has the means to implement a hybrid blockchain. As far as maintenance is concerned, the organization also has some difficulties.
It is possible to hide information from the user because of transparency. An organization's decision as to whether to grant access to the hybrid blockchain depends on the organization's policies.
As this blockchain has a closed ecosystem, there are no incentives for users to join the network.
The solution provides a greater solution for the health care industry, government, real estate, and financial services. It allows public access to data while shielding it from private disclosure. Blockchains that combine Blockchains and Cryptocurrencies are Ripple and XRP.
4. Cryptocurrency Consortium
The approach solves the needs of the organization creatively. This blockchain validates the transaction and also initiates or receives transactions.
It is also called Federated Blockchain.
Organizations can use this method to solve their problems.
Public and private parts of the site are both available.
Unlike the first type, this type involves more than one organization managing the blockchain.
Advantages:
Verification is faster because there are fewer users. Organizations will benefit from the high speed of this.
It can be decentralized at every level with multiple organizations taking part. Security is increased by decentralized authority.
The information of the checked blocks is not disclosed to the public. It can be accessed by any blockchain member.
Various blockchains provide varying levels of flexibility. Decisions can be taken faster because it is not an extremely large decision.
Disadvantages:
It is less flexible because it has the approval of all members. The interest visions of one or more organizations can differ because they are involved in the same project.
A corrupt organization can use it to hack into the system. The information that organizations hide from their users may be classified as proprietary.
If few nodes are compromised, there is a greater chance of a blockchain being vulnerable
There is high potential in businesses, banks, and other payment processors for this technology. The food tracking system for the organizations frequently collaborates with their sectors, making it the ideal solution for them to use. The consortium Blockchains Tendermint and Multichain are examples.
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