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  • Types of Blockchain and their Importance in the Digital World

    types of blockchain

    The blockchain is a leading-edge technology that seems way ahead of the curve and turning out to be the most disruptive technology. Since the inception of Bitcoin in 2009 where the technology was first implemented, it has come a long way ahead. There are now different types of Blockchain operating in different disciplines. 

    Besides Bitcoin, Cryptocurrencies and other financial applications, Blockchain Technology has crossed the boundaries. The distributed ledger technology is now being used in all major industries including Retail, Finance, Insurance, Agriculture, Healthcare, Life Sciences and Scientific Research.

    Types of Blockchain

    As a matter of fact, there are different types of Blockchain permutations and based on its applications, Blockchain is broadly classified into two main categories. I.e Public and Private Blockchain. As clear from their name, Public Blockchains allow anyone and everyone to see the transactions as long as they are a part of the consensus.

    Contrary to this, Private Blockchains provide access only to a specific department, organization or a group of employees within an organization. Apart from these two, there is another type of Blockchains called Consortium Blockchains. In this type of Blockchain systems, only a limited number of nodes are given access to the ledger.

    Public Blockchain vs Private Blockchain

    As already told, Public and Private Blockchains differ from each other only when it comes to accessibility of the ledger. Public Blockchains are open to everyone in the network while the Private Blockchains restrict the access to a specific number of people within an organization. Apart from this fact, the two Blockchains are very much similar in characteristics.

    Given below are the points of similarity between the two.

    • Both Blockchains are decentralized and form a Peer-to-Peer network where each participant retains a tamper-proof copy of the ledger.
    • They all provide a permanent and tamper-proof ledger that stores data in a series of Blocks.
    • Each type of Blockchain maintains immutable copies of the ledger in sync through the consensus protocol.

    Main Points of Difference

    Each of these blockchains has its own importance and each one focuses primarily on transparency, efficiency, immutability, and anonymity. Coming to the difference, a public blockchain like the one used in cryptocurrencies prioritizes the factors like anonymity, transparency, and immutability over the efficiency.

    Contrary to this, the private and permissioned blockchains give more priority to immutability and efficiency while factors like anonymity and transparency are undermined.

    By having a sharp focus on efficiency rather than the other factors like anonymity and transparency, the private blockchain abstains from the characteristics associated with the technology. Although the use of private blockchain is currently limited to a few applications, these type of blockchains have the ability to improve the processes and make them more streamlined and mobilized.

     


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