Blockchain technology is “an open, distributed ledger that can record transactions between two parties in a verifiable and permanent way.”
The most basic requirement or application of a blockchain is to conduct transactions or information exchanges across a secure network. However, how people use blockchain and distributed ledger technologies or networks varies depending on the situation. They can be variegated into different parts depending upon most of their use.
It was a public blockchain type with cryptocurrency use-case when blockchain technology was first exposed to the world. It’s difficult to decipher the creator’s intentions, although it did introduce the concept of decentralized ledger technology (DLT).
The DLT concept revolutionized the way we tackle problems in our daily lives. It enabled groups to work without relying on a central authority.
Four divisions are made to discuss their intrinsic and these are dependent upon the permissions, regulations, and mining possibilities.
A public blockchain is a permissionless, non-restrictive distributed ledger technology. Anyone with an internet connection can sign up for a blockchain platform to become an authorized node and join the network. A public blockchain node or user authorized to access current and historical records, validate transactions, and perform proof-of-work for an incoming block. Consensus mechanisms such as Proof-of-Work (PoW), Proof-of-Stake (PoS), and others used to verify transactions. The participating nodes must undertake the heavy lifting, including validating transactions, for the public block-chain to function. A public block-chain will become non-functional if it does not have the required peers participating in transaction processing.
Private blockchains, also known as permission blockchains, are a type of chain that differs from public blockchains in several ways. To join the networks, participants must give their consent. Transactions are private, and only ecosystem participants who have granted permission to join the network have access to them. The centralized nature of private block-chains differs from that of public blockchains. Due to the centralized nature of these blockchains, they may managed and regulated by someone who can ensure that the governors are directing participants. These blockchains may or may not have a token, depending on the Block-chain owner’s preferences.
A consortium blockchain is one in which the consensus process is controlled by a pre-selected set of nodes, such as a consortium of 15 financial institutions, each of which runs a node and of which 10 must sign every block for it to be valid. The ability to read the block-chain may be open to the public or limited to participants this collaborative strategy brings together a group of “frenemies”—companies that work together yet compete against each other—to provide some of the best use cases for the benefits of block-chain.
By partnering on some areas of their business, they can be more efficient both individually and collectively.
Hybrid blockchain is best as the blockchain that attempts to use the best part of both private and public blockchain solutions. In an ideal world, a hybrid blockchain will mean controlled access and freedom at the same time.
The hybrid block-chain architecture is distinguishable from the fact that they are not open to everyone but still offers block-chain features such as integrity, transparency, and security.
What type of block-chain used depends upon the purpose of use. If you’re a business and want to use block-chain without making everything public, a private block-chain is a fantastic option. Furthermore, if you want your network to be more transparent, a public platform is a smart choice. However, they are not well suit to enterprise use cases. Enterprise should follow out systems that are more accessible to gain the trust and be in the eyes of public.