Blockchain is the technology that is used in cryptocurrency or bitcoin. It is like a ledger that saves the data or records on each transaction. Usually, once it is recorded and saved it can not be altered. Blockchain technology is designed to make each record safe and secured.
Types of Blockchain Network
- Public Blockchain
- Private Blockchain
- Hybrid Blockchain
- Federate Blockchain
It is the most familiar type of blockchain. It is open for everybody and the public control it and no one is in charge. The user can send and receive and audit assets. It is freely available in the public where there is transparency on the data transaction. There’s not a need to ask permission. The data is secured because of the cryptographic methods.
Public Blockchain Example: Bitcoin and Ethereum
Bitcoin is a decentralized digital cryptocurrency without a centralized administration. A peer-to-peer bitcoin without any third-party intervention.
Ethereum is one of the known cryptocurrencies and has smart contract functionality. Ether is the blockchain technology that is generated in the Ethereum platform.
A private blockchain is a decentralized digital cryptocurrency that is designed for a private party or an organization. There is a person-in-charge before you can access it. This person-in-charge is the decision-maker for giving access to a selective client. There is an agreement that is kept in one organization. Usually, a private blockchain is being used by the business company. There is a certain restriction to a certain participant. The business company that is running a private blockchain has a better option in changing rules, modify and revert transactions. It is much cheaper and because private blockchain has a restriction that means it has a greater level of privacy.
Private Blockchain Example: Bankchain and Hyperledger
Bankchain is all about the post-trade settlement in the financial sector. Processing in a settlement is much better and faster because it lessens the third-party intermediaries. There is an available shared ledger that is exclusive for partners. Though this is not the same as bitcoin and ethereum wherein it can be seen by the public. The bankchain part of the main goal is to have an improvement in operational efficiency while lowering down the over-all fees that are associated with the bank.
Hyperledger is an open-source technology created by Linux Foundation last December 2015. The objective is to have a cross-collaboration focus on improving the performance and reliability of the system.
A hybrid blockchain is a kind of blockchain network that attempts to utilize the best characteristics of both the private blockchain and the public blockchain. With the use of interchain, bridges and other interoperability solutions, an individual can use blockchain with the use of public and private characteristics. Permissions from public and private blockchain have their complications and advantages. For those entities that prefer not to divulge important information to the internet should only use a private blockchain. The hybrid blockchain ensures the safety of all sensitive information to a private blockchain. Hybrid blockchain validates through algorithms for both private and public blockchain.
Having just one individual in charge of data can be very scary as it can manipulate the whole flow of the transaction. Because of this, federated blockchain has been introduced to solve the problem. It is also called a consortium blockchain that is run by several groups of people or an organization.
Federated blockchain has equal power in running the network and giving equal decision for the best interest of the network. Federated blockchain will make it cost-effective, control and enforce change. It only needs at least 5 participants. These participants can run the full node and start mining and decide on the chain. It can also review the blockchain explorer.
Federate Blockchain Example: r3, EWF (Energy Web Foundation)
r3 is a blockchain technology company with more than 300 industry firms such as insurance firm, financial services, healthcare, trade, and finance institutions. Last 2016, r3 introduced Corda, an open-source blockchain platform that offers help and support to the community. And in 2018, Corda Enterprise was launched. This is to meet the services and fine-tune the network infrastructure.
Energy Web Foundation is the pioneer blockchain platform and the biggest ecosystem blockchain powering the energy future. It was founded last 2017 by Rocky Mountain Institute (RMI).
There are different types of blockchain networks and each has helped individuals, entrepreneurs from different industries scale their businesses. It is much better to know and understand the differences between those networks for you to know what suits better for your business.