There are 4 different types of Blockchains.
If you are having difficulty in understanding what blockchain is and are looking for a simpler explanation for this new term which is emerging in recent times, you have landed on the correct page.
Blockchain is an online ledger or a record of transactions and is shared from system to system, online. A blockchain typically stores the data online and is usually used for cryptocurrency transactions. The purpose of blockchains is to provide the investors a sound record of their transactions and this feature has helped attract more traffic towards investment in these digital assets and built trust for the system.
Blockchain gets its name from the format with which data is stored. The data is stored in the form of blocks and when one block is filled, it is locked and linked to the previous block of information, forming a ‘blockchain’. While a record of transactions is the most common use of a blockchain, it can hold any kind of information. This system of storing data has become popular due to how safe the database has become as it does not let anyone edit the information it stores.
Below are some of the most popularly known blockchains:
Public blockchain as the name itself suggests, are the most common from the lot and are accessible to the public. Anybody can get easy access to it and people can also add in to it by writing to the blockchain and gain data from it. This type of blockchain is not controlled by a single entity. The primary benefit of public blockchain is that the data is easily traced and it offers public accountability. It basically builds trust due to its transparent nature. The best and the most popular examples of public blockchain include Bitcoin and Ethereum.
Private blockchain on the other hand provides the users with a certain degree of privacy and may be used for more personal purposes than being accessible to the general public. The blockchains in fact are only accessible through permissions and are used internally by organizations. It is a favorable record keeping tool since the company can authorize access to the selected members which ensures absolute security even within an organization. Not only the access can be controlled but the company can also decide who gets to add in and which members can just view it to read the data. Since public blockchain is absolutely safe, it is an efficient tool for information which needs high security and very limited access. Moreover, it processes information in real time which makes it time efficient for companies which need instant recording and exchange of information.
Consortium blockchain is a combination of the types of blockchains we have discussed earlier; public and private. This kind of blockchain is not used for public use nor is it limited to just one organization; instead, it is used when a number of organizations have to come together for a secure exchange of information. Consortium blockchain works the best when organizations have to collaborate and the data that is shared has to be restricted between the participating organizations. This blockchain, if used efficiently, can save a lot of time and research of most organizations as they can share their developments with each other and help each other come up with breakthrough ideas. Moreover, with this blockchain technology, organizations don’t have to build information from scratch and can simply be added to an existing structure.
Hybrid blockchain, like consortium blockchain is a combination of public and private blockchain, however, with a different structure. The flexibility of this blockchain makes it one of the favorite data recording tools of many organizations. It is accessible for the general public and these people do have access to reading and writing of data but the catch is that not all parts of the structure fall under being transparent. Some parts are restricted and may have limited accessibility to keep sensitive information safe. This gives organizations the authority over what information to share and what to keep private, all while storing the data on one platform. The increased control of the authority of this tool makes it one of the top choices for organizations.