Sheeresh was curious about blockchain technology, and Atharv was well-versed in the topic. Atharv wrote a detailed description of blockchain and its kinds.
Let us all understand and gain knowledge of the same.
Why is it required?
Different industries employ Blockchain Technology in various ways. So, before discussing the multiple types of Blockchain, let’s discuss a few Blockchain applications where the requirements and way the application uses Blockchain differ.
Bitcoin is one of the most well-known digital currencies. Bitcoin is a method of conducting an online monetary transaction without intermediaries. To transfer Bitcoins, you use the recipient’s Account ID. To avoid fraud, the transaction is sent to Blockchain Mining for validation. The transaction is added to the Blockchain block after being validated and verified.
When it comes to cryptocurrencies such as Bitcoin, anyone can use it, make transactions, and act as a validator. As a result, there are no restrictions on who can use Bitcoin.
Multichain is a Blockchain application used by businesses to improve security. You can prevent unauthorized access to sensitive data by implementing a Multichain. The Blockchain is not accessible to the general public in this case; it is only accessible to authorized entities within the same organization.
In such Blockchain applications, the node that can join the network and access the Blockchain should be limited. Only the Network Administrator can invite people to join the web, and Participant and Validator access is restricted.
A public blockchain is a permissionless, non-restrictive distributed ledger system. Anyone with internet access can sign up for a blockchain platform to become an authorized node and join the blockchain network.
A node or user on the public blockchain can access current and historical records, verify transactions or perform proof-of-work for an incoming block and mine. Bitcoin and Litecoin blockchains are the most common public blockchains, and public blockchains are mostly secure if users strictly adhere to security rules and methods.
A private blockchain is a limited or permission blockchain that operates only within a closed network. Private blockchains are typically used within an organization or enterprise were only selected blockchain network members participate. The controlling organization determines the level of security, authorizations, permissions, and accessibility.
Thus, private blockchains function similarly to public blockchains but have a smaller and more restricted network. Voting, supply chain management, digital identity, asset ownership, and other applications use private blockchain networks.
A consortium blockchain is a semi-decentralized type in which a blockchain network is managed by more than one organization. We observed a private blockchain, where a single organization operates. In this type of blockchain, more than one organization can act as a node, exchanging information or mining. Consortium blockchains are commonly used by banks, government agencies, and organizations.
A hybrid blockchain combines private and public blockchains. It combines the features of both blockchains, allowing for both a private permission-based system and a public permission-less system. The blockchain hybrid system is adaptable, allowing users to connect a private blockchain to multiple public blockchains easily.
A transaction in a hybrid blockchain network is typically verified within that network. However, users can also publish it on the public blockchain to be confirmed. Public blockchains increase hashing and involve more nodes in the verification process, improving the blockchain network’s security and transparency.
The various types of blockchain guides are listed above. In general, if you are a company and want to use blockchain without making everything public, it is a good idea to use a private blockchain. Furthermore, a shared platform is a good option if you want more transparency in your network.