Four Types of Blockchain

 Only a small portion of blockchain is made up of bitcoin and other cryptocurrencies. Blockchains generally fall into one of four categories, each having its own advantages, disadvantages, and uses.

One of the main concepts that beginners must grasp when they first come across cryptocurrency is blockchain technology. This is the easy stage because blockchain is really just a database spread across a network of computers. We all view blockchain security differently since the network's security is a whole separate concern.

What is Blockchain?

According to its definition, a blockchain is "a distributed database that maintains a continuously growing list of ordered items, called blocks," and these blocks are connected by means of cryptography. Each block contains a timestamp, details about transactions, and a cryptographic hash of the block before it. A blockchain is a decentralized, distributed, and open digital ledger that is used to record transactions across several computers in a way that forbids alterations to the past without also altering all blocks that have come before them and obtaining network consensus.

The complete history of transactions is kept on a decentralized ledger, sometimes referred to as a peer-to-peer network, and is known as a blockchain. Participants can confirm transactions without a need for a central clearing authority thanks to this technology. Voting, trade settlement, financial transfers, and many other procedures are just a few examples of potential uses.

Types of Blockchain

• PUBLIC BLOCKCHAIN

• PRIVATE BLOCKCHAIN

• HYBRID BLOCKCHAIN

• CONSORTIUM BLOCKCHAIN

PUBLIC BLOCKCHAIN

To be considered public, a blockchain must be permissionless and accessible to all users. In other words, anyone can connect to a network as a node using their computer. Once the software has been downloaded and installed on the computer, a blockchain node can mine, verify transactions, or read the entire network's record.

Advantages

• No matter how effective centralized organizations are, there will always be a top-level weakness that could cause a breakdown.

• Public blockchains are immune to this issue because of their decentralized character.

• If there are computers or nodes connected to form a distributed ledger, a public blockchain can continue to run regardless of the organization that first financed it.

• Along with openness, this is another advantage of a permissionless distributed ledger network.

PRIVATE BLOCKCHAIN

There are restrictions on who can access the network or sign up as a node on a private blockchain, which is frequently managed by a single business. These node listings are reviewed by eminent organizations that have the power to restrict or expand the network as they see fit. Private blockchains also referred to as company blockchains, are blockchains, just like permissioned distributed ledgers.

Advantages

• They outperform public blockchains in terms of speed due to the limited number of nodes that are allowed to join the network.

• After all, a transaction would only need to pass via a few nodes at that point.

• There is less chance of successful hacking because the entity in charge has total control over authorization and network accessibility.

HYBRID BLOCKCHAIN

A hybrid blockchain combines the traits of both a private and public blockchain. By combining the features of both blockchains, it is possible to have both a private permission-based system and a public permissionless system. Users may manage who has access to what data on the blockchain with the help of this hybrid network. Only a limited number of blockchain data points or records may be made public; the remainder is kept hidden on the private network.

The hybrid architecture of blockchain makes it easy to integrate with several public blockchains. In a hybrid blockchain's private network, a transaction is often verified by the entire network. Users can choose to publish it to the open blockchain for verification, though. The speed of hashing and the use of more nodes for confirmation on the public blockchains increase the security and transparency of the network.

Advantages

• Hybrid blockchains have a high network throughput and are resistant to 51% attacks since they include more nodes but are still part of a closed network.

• They are therefore more cost-effective and scalable than open blockchains.

CONSORTIUM BLOCKCHAIN

A blockchain's maintenance duties may be split among several groups. These preset entities decide who is allowed to submit transactions or access data. When each member needs to have permission and be given a shared responsibility for the blockchain, a consortium blockchain is an ideal choice for business.

Advantages

• Compared to public blockchains, consortium blockchain networks are more scalable and offer faster transaction processing times, all while preserving control over a large number of companies.

Conclusion

Transactions involving cryptocurrencies like Bitcoin use the most well-known public blockchain. Every aspect of the open blockchain is transparent. Such technology is useless for businesses that must manage sensitive data, such as commercial contracts or individual customer information.

Private blockchains are more likely to draw private entities because they don't disclose data and only allow transactions from users who have been invited. The private blockchain enables the granting of users different levels of authorization, limiting user access, and encrypting data to protect data confidentiality.