Blockchain Technology and its Types

Blockchain, also referred to as distributed ledger technology (DLT), makes the history of any digital property immutable and clear through a decentralized network and cryptographic hashing.

A simple likeness of how blockchain technology works can be likened to how a Google Docs document works. When you develop a Google Doc and share it with a group of people, the document is simply distributed instead of being copied or transmitted. This creates a decentralized distribution chain that allows everyone to access the underlying document simultaneously. No one is blocked waiting for changes from another party, while all changes to the document are recorded in real time, so changes are completely transparent. However, a significant loophole is that, unlike Google Docs, the original content and data on the blockchain cannot be modified once written, increasing its level of security.

Blockchain is an up-and-coming and revolutionary technology as it helps reduce security risks, curb fraud and bring transparency in a scalable way.

Popularized by its association with cryptocurrencies and NFTs, blockchain technology has since evolved to become a governance solution for all types of global industries. Today, you can find blockchain technology providing transparency to the food supply chain, securing healthcare data, innovating gaming, and overall changing the way we deal with data and ownership at scale.

A private blockchain is a permissioned and partially decentralized system where only one organization has access and authority to the network.

In other words, anyone who wants to join it has to ask for permission from the blockchain’s governing body, and the public can’t access it.

A private blockchain involves invitation, and only the individuals participating in the transaction can know about it. Anyone managing a private blockchain network can change or modify transactions according to their needs.

However, a private blockchain consumes much power and energy and is more vulnerable to risks, hacks, data breaches, or manipulation.

In private blockchain platforms, records can be changed by the owner and organizations use distributed ledger technology but do not publicize their data. A private blockchain means that each user must have a backed-up identity, as this characterizes their access type. They enable faster transactions and are more energy efficient to maintain.

Additionally, since businesses require privacy, private blockchain use cases seem ideal in this case. Without real privacy, their competition can enter the platforms and release invaluable information to the press.

1. Private blockchains are fast. This is because there are few participants compared to a public blockchain. In short, the network takes less time to reach consensus, resulting in faster transactions.
2. Private blockchains are more scalable. Scalability is possible because only a few nodes are authorized to verify transactions in a private blockchain. It doesn’t matter if the network grows; the private blockchain will operate at its previous speed and efficiency.

Public Blockchain

• In a public blockchain, anyone can participate by reviewing and adding data to the blockchain.
• The public blockchain is decentralized.
• By orders of magnitude, a public blockchain is lighter than a private blockchain and generates transaction throughput.
• Transactions per second are less in public blockchains compared to private blockchains.
• A public network is more secure because it is decentralized and involves active participation.
• In a public blockchain, it is required to grant access to a centralized authority to oversee the entire network.

source: https://www.e-zigurat.com/innovation-school/blog/public-vs-private-blockchain-whats-the-difference/

Transactions and records in a hybrid blockchain are private but can be verified if connected, for example, by allowing access through a smart contract. Private information is retained inside the network but is still verifiable.

Although a private entity can own a hybrid blockchain, it cannot alter transactions. A hybrid blockchain allows organizations to establish a permission-based private system alongside a permission-less public system, allowing them to manage who has access to specific data stored on the blockchain and which data we can make public.

When users are connected to a hybrid blockchain, they have full permission to access the network. The user’s identity is secured and protected from other users when not participating in a transaction. After that, their identity is revealed to the other party.

1. It works in a closed ecosystem without the need to publish everything.
2. Rules can be changed as needed.
3. Hybrid networks are also immune to 51% of attacks.
4. It offers privacy while still being connected to the public network.
5. It gives good scalability if we compare it to another public network.

• Verification: The number of participants in the consortium blockchain is known and verified.
• Control: Instead of a single entity, a specific group of authentic participants governs the blockchain platform.
• Security: Information on authentic blocks is private.
• Economical: the blockchain consortium does not charge any service or transaction fees in the consortium setup.
• Flexibility: Connecting multiple validators to other blockchains leads to mutual consensus and synchronization issues.

• Before giving the final verdict, we thoroughly studied the two main types of blockchains, i.e. private and public blockchains. Both have some differences between them. However, the main differences lie in security, scalability and transparency. On the one hand, where the private network may not seem very trustworthy, you can completely rely on the public network for its unbroken consensus system (proof-of-work).
• A public blockchain guarantees security because hacking the entire network is almost impossible. In addition, it offers data transparency as every node has equal access to the record stored in the blockchain. One very successful example of a public blockchain is the Bitcoin system.

If you are just a beginner and want to understand how each type of blockchain works, then we recommend our free blockchain article.