Blockchain is a peer-to-peer (P2P), decentralized, distributed ledger technology that stores digital asset ownership records. Blockchain technology is a legitimate disruptor for markets like healthcare, cybersecurity, and payments because any data stored there cannot be modified.
Types Of Blockchain
Blockchain is the most discussed technology at present because it offers immutability, transparency, and security. This technology has the potential to revolutionize the way businesses and industries work. This is the reason why it is attracting blockchain experts and blockchain developers.
Blockchains have been categorized into three types depending on the requirements and use. The three types are private, public, and consortium blockchains. Each of these blockchain networks solves particular problems and serves a specific purpose as well. Each also has unique features and advantages over the other.
1. Private Blockchain
A private blockchain operates in a closed network. It is a restrictive and permission blockchain. This type of blockchain is typically used inside of a company where only specific members can participate in the blockchain network. It works best for businesses and enterprises that want to use blockchain solely internally.
Furthermore, a private blockchain is not highly accessible. It is limited to a particular group of people. A single authority maintains the private blockchain network, making it more centralized. Some examples of the private blockchain are Corda, Hyperledger Sawtooth, Hyperledger Fabric, Multichain, and Ripple (XRP).
· Highly scalable
· Higher transaction per second
· Achieving trust is difficult
· Less decentralized
· Less secure when compared to public blockchains
2. Public Blockchain
A public blockchain is a distributed ledger, non-restrictive, permissionless system. This means that anyone with an internet connection can join and become a part of the blockchain network. This type of blockchain is used for mining and exchanging cryptocurrencies.
Additionally, it upholds confidence across the entire user base since everyone feels motivated to contribute to the development of the network. Bitcoin is the first example of such a blockchain. Other examples of public blockchains that followed are Ethereum, Litecoin, IOTA, Monero, and Bitcoin Cash.
· No intermediaries
· Transparent and trustable
· Consumes a lot of energy
· Lack of transaction speed
· Scalability issues
3. Consortium Blockchain
The consortium blockchain is also called federated blockchains. This type of blockchain works best for organizations with the need for both private and public blockchains. More than one organization is involved in this type. The organization grants pre-selected nodes access to read, write, and audit the blockchain.
Furthermore, consortium blockchains continue to be decentralized because no single entity is in charge of control. Examples of consortium blockchains are Quorum and Corda.
· Better control and customizability over resources
· Secured and offers scalability
· Most effective for organizational collaboration
· More efficient than public blockchains
· Less anonymous than other blockchains
· Less transparent
All three types of blockchains have unique feature requirements, usage, and advantages. You should have in-depth knowledge of each one of them if you are a part of it already.
A private blockchain is a one-stop solution if you want to develop and execute your enterprise blockchain, and anyone can join a public blockchain. Whereas, the consortium blockchain is best suited for organizations and enterprises who want efficient, streamlined communication among one another. Ensure that you consider your business features and requirements before choosing a blockchain.
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