What are the Different Types of Blockchain? A Comprehensive Exploration

Blockchain is a buzzword that you may have heard a lot in recent years. But wh exactly is Blockchain, and why is it so important? Blockchain Technology functions as a secure, transparent, and unchangeable distributed ledger system for recording transactions and data. The innovative nature of this technology has led to the development of various Types of Blockchain, each with distinct utilities and applications.

Blockchain can be used for diverse applications, such as Cryptocurrencies, smart contracts, supply chain management, digital identity, and more. But before we dive into the details of these applications, we need to understand the different Types of Blockchain that exist and how they work. 

Table of Contents 

1) What is Blockchain? 

2) What are the Different Types of Blockchain?

     a) Public Blockchain 

     b) Private (or Managed) Blockchain 

     c) Consortium Blockchain 

     d) Hybrid Blockchain

3) Real Life Application of Blockchain

4) Conclusion 

What is Blockchain?

Blockchain is a decentralised data storage and transfer system that operates through a network of computers known as nodes, adhering to established protocols. Every node retains a duplicate of the complete ledger, and this ledger is refreshed whenever fresh transactions or data are introduced. 

The record is composed of blocks, each containing a collection of transactions or data, along with a timestamp and a cryptographic connection to the preceding block, referred to as a hash. This hash guarantees the order of blocks and prevents unauthorised alterations.  

The process of incorporating new blocks into the record is called mining, which entails solving intricate mathematical puzzles that demand substantial computational resources. The initial node that successfully solves the puzzle is rewarded and granted the authority to incorporate a new block, frequently in the form of a cryptocurrency. The next section will explore the different Types of Blockchain in details.
 

What are the Different Types of Blockchain?

There are different Types of Blockchain, depending on who can access, participate in, and validate the ledger. The main Types of Blockchain are:
 

Public Blockchain 

A Public Blockchain is a Type of Blockchain that is open and permissionless, meaning that anyone can join, read, write, and validate the ledger. Public Blockchains are characterised by their decentralised and distributed nature, which implies the absence of any central authority or intermediary with control over the network or the data. Examples of Public Blockchains are Bitcoin, Ethereum, and Litecoin. Public Blockchains have the following advantages and disadvantages: 

1) Advantages: 

a) High level of security, transparency, and immutability, as the ledger is verified by a large number of nodes and cannot be altered by anyone. 

b) High level of innovation and diversity, as anyone can create and use applications and services on the network. 

c) High level of inclusiveness and accessibility, as anyone can freely join and engage in the network without any barriers or fees. 

2) Disadvantages: 

a) There is a low level of scalability and efficiency, as the network can process only a limited number of transactions per second and consumes a lot of energy and resources. 

b) Low level of privacy and confidentiality, as the ledger is public and anyone can see the transactions and data of the users. 

c) High levels of volatility and unpredictability, as the network is subject to market fluctuations and external influences. 

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Private (or Managed) Blockchain 

A Private Blockchain is a type of blockchain that is closed and permissioned, meaning only a selected group of entities can join, read, write, and validate the ledger. In this context, Timestamp in Blockchain plays a vital role in ensuring the integrity and immutability of data. Private Blockchains are centralized and controlled, with a single authority or intermediary managing the network and the data. Examples of Private Blockchains include Hyperledger Fabric, Corda, and Quorum. Private Blockchains offer the following advantages and disadvantages:

1) Advantages: 

a) High level of scalability and efficiency, as the network can process a large number of transactions per second and consumes less energy and resources. 

b) High level of privacy and confidentiality, as the ledger is private and only the authorised entities can see the transactions and data of the users. 

c) High level of stability and predictability, as the network is less subject to market fluctuations and external influences. 

2) Disadvantages: 

a) Low level of security, transparency, and immutability, as the ledger is verified by a small number of nodes and can be altered by the authority or the intermediary. 

b) Low level of innovation and diversity, as the network is restricted and limited by the rules and regulations of the authority or the intermediary. ​​​​

c) Low level of inclusiveness and accessibility, as the network is exclusive and requires permission and fees to join and participate. 

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Consortium Blockchain 

A Consortium Blockchain is a semi-open and semi-permission type of Blockchain Technology Alternative where only a predefined group of entities has the privilege to join, read, write, and validate the ledger. Consortium Blockchains are federated and governed, meaning a group of authorities or intermediaries shares control and responsibility for the network and data. Examples of Consortium Blockchains include Ripple, Stellar, and Binance Chain. Like other Blockchain Technology Alternatives, Consortium Blockchains come with their own advantages and disadvantages:

1) Advantages: 

a) Moderate level of scalability and efficiency, as the network can process a moderate number of transactions per second and consumes a moderate amount of energy and resources. 

b) Moderate level of privacy and confidentiality, as the ledger is semi-private and only the authorised entities can see the transactions and data of the users. 

c) Moderate level of stability and predictability, as the network is partially subject to market fluctuations and external influences. 

2) Disadvantages: 

a) Moderate level of security, transparency, and immutability, as the ledger is verified by a moderate number of nodes and can be altered by the group of authorities or intermediaries. 

b) Moderate level of innovation and diversity, as the network is partially restricted and limited by the rules and regulations of the group of authorities or intermediaries. 

c) Moderate level of inclusiveness and accessibility, as the network is partially exclusive and requires permission and fees to join and participate. 

Hybrid Blockchain 

This stands out from the other Types of Blockchain in that it merges characteristics from both public and private Blockchains, enabling various levels of access, participation, and validation for distinct entities. Hybrid Blockchains are adaptive and customisable, meaning that they can be configured and modified according to the needs and preferences of the users. Examples of hybrid Blockchains are Dragonchain, Kadena, and Polkadot. Hybrid Blockchains have the following advantages and disadvantages: 

1) Advantages: 

a) Flexible level of scalability and efficiency, as the network can adjust the number of transactions per second and the amount of energy and resources according to the demand and the supply. 

b) Flexible level of privacy and confidentiality, as the ledger can be public or private depending on the type and the purpose of the transactions and data of the users. 

c) Flexible level of stability and predictability, as the network can balance the market fluctuations and external influences with the internal rules and regulations. 

2) Disadvantages: 

a) Complex level of security, transparency, and immutability, as the ledger is verified by a variable number of nodes and can be altered by different entities depending on the access and the authority. 

b) Complex level of innovation and diversity, as the network is influenced by different factors and forces depending on the participation and the validation. 

c) Complex level of inclusiveness and accessibility, as the network is determined by different criteria and conditions depending on the join and the involvement. 

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Real Life Applications of Blockchain

The transformative impact of Blockchain Technology and the different Types of Blockchain has made it suitable for a diverse range of applications. Blockchain technology finds applications across various sectors like Blockchain in Accounting, Supply Chain and more to enhance efficiency and accuracy. Here are a few of them:

a) Secure Voting Systems: Blockchain can create a tamper-proof and transparent voting system which ensures integrity and trust in the election process.

b) Supply Chain Management: Blockchain enhances transparency and traceability, and helps in reducing errors and fraud in the supply chain.

c) Healthcare Management: In the healthcare sector, Blockchain secures patient data by ensuring privacy and seamless sharing between healthcare providers.

d) Real Estate Projects: In the Real Estate Blockchain Industry, Blockchain simplifies property transactions. This reduces fraud and increases transparency in ownership records.

e) NFT Marketplaces: Blockchain supports NFT trading by providing proof of ownership and authenticity for digital assets.

f) Copyright Protection: Blockchain helps in protecting intellectual property rights by verifying the originality and ownership of content.

g) Personal Identity Systems: Blockchain provides secure and verifiable digital identities, reducing identity theft and fraud in the process.

h) Immutable Data Backup: It ensures data integrity and prevents unauthorised modifications by creating immutable backups.

i) Internet of Things (IoT): This technology enhances IoT security by providing a decentralised network for device communication and data exchange.

Conclusion 

Blockchain is a powerful technology that offers countless benefits and opportunities across various industries and sectors. However, it’s important to recognize that not all Blockchains are the same, as they differ in features, benefits, and challenges. We hope this blog helps you understand the different Types of Blockchain, their technological prowess, and their diverse applications, including their role in Blockchain Supporting Sustainability initiatives.

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