In this blog, we are going to discuss the Types of blockchain technology and their consequence. Once we get to understand the basics of the blockchain types, we will easily lay our hand on choosing the type of blockchain which suits and provides benefits for you. Let’s first start with why we need a blockchain?
Why do we need blockchain technology?
The most important purpose of using blockchain technology is to perform the transaction or to share the information in a secure network. People use this blockchain technology in several ways when we talk about Bitcoin, it is a digital cryptocurrency that is transacted by the blockchain and distributed ledger technology. In this way, blockchain technology has been brought into the mainstream.
In a further way, people use blockchain technology to maintain bank data. This is a private network to maintain the authorized node and it is monitored by the network administrator still there are various ways to use the blockchain technology.
Types of blockchain technology
There are different types of blockchain technology used by the people which are Public, Private, Consortium, and hybrid blockchains, before getting to know about these types of blockchain, let’s discuss the connections between them. Each blockchain has a cluster of nodes that function on a p2p (Peer to peer) network system. Each node of the network has a copy of the shared or transacted ledger which will be updated instantly. Each node verifies the transactions and receives them.
A public blockchain is a network without any restrictions so that anyone can join in it at any time they want. The ledger can be seen by anyone and get involved in the concurrent process.
By just using an Internet connection you can join the network and start verifying blocks and sending transactions. Normally, this network offers provocation for users who verifies the blocks. For example, Bitcoin and Ethereum are some examples of public blockchain technology.
A public blockchain network adopts the proof of work or stake concurrent algorithms for verifying the transactions. In a public blockchain network, you can take the protocol anytime, and the blockchain is prohibited, that is you do not need permission from anyone to connect and interact with the blockchain network; anyone can take part in reading, writing, and still more within this blockchain.
The public blockchains represent the great model that makes the industry of technology so profitable. A public blockchain is decentralized and can’t run the network as it has no entity. And also, data on a public blockchain are secure as it is impossible to modify or make any changes in data once they have been verified on the blockchain.
A private blockchain also provides permission and it is a partially decentralized system where if you need to join it will ask for permission from the governing person of the blockchain, so the public people can’t access it.
A private blockchain demands authorization and only selected individuals can perform a transaction and can know about it. Users who are using a private blockchain network can apply changes or edit any transactions according to their needs.
Here, private blockchains provide different levels that identify which users could write, read and take a part in the blockchain. In private blockchain platforms, the user gets some rules that other platforms do not get. Therefore, all the nodes have to ensure some regulations to make sure that a company runs properly.
However, a private blockchain network has gained security and power and is more vulnerable to risks, hacks, and data manipulation
A hybrid blockchain is the unification of the private and public blockchain. This hybrid blockchain network uses the features of both these types of blockchains that is one enables a private permission-based system and the other as a public permission-less system. By using this hybrid network, users can control the access provided to the user to which data is stored in the blockchain. Only a selected section of data from the blockchain network is allowed to go public by keeping the rest secret in the private network.
The hybrid system of blockchain is flexible so that users can connect quickly with a private blockchain. A transaction in a private network of a hybrid blockchain is always verified only within that network. But users can also deliver it in the public blockchain to get verified. The public blockchains help in increasing the hashing and involve more no nodes for validation. These types of networks help in improving the security and transparency of blockchain networks.
A consortium blockchain network is a semi-decentralized type of network which allows more than one organization to manage a blockchain network. This is directly opposite to what we have discussed in a private blockchain, as it helps in managing only a single organization. But in consortium blockchain, more than one organization can act as a node and share or exchange information and prospecting. This consortium blockchain is typically used by banks and government sectors, etc.
We hope that you might get to know about these different types of technology and now you can decide which blockchain network will deliver your intention in a better way. Are struggling to choose the exact blockchain network? Adhoc Softwares provides the best service and solution in blockchain technology you can reach us at any moment.