Many companies are exploring the decentralized nature of blockchain technology for their respective industries. In this article, we will discuss each type with an example. Three are the main types of blockchain networks:
1. Public (or Permissionless)
Publicly accessible blockchains have no restrictions between the participants, meaning that uncontrollability is applied, also known as decentralization. In such systems, no one has complete control of the network, ensuring the immutability of records that are accessed by all users; anything you are doing in the network can be viewed by everybody. There is no supervision; anyone can be part of the network and validate transactions on it. Every user acts as a node that is validating transactions in return for rewards (for example cryptocurrency). Examples of public blockchain applications include the crypto of Bitcoin, Zcash, and Ethereum. Such networks are considered more secure and faster due to the Distributed Ledger Technology (DLT) that is applied and the cryptography technology.
2. Private (or Permissioned)
Private blockchain networks are mainly used by companies and communities which do not want their information to be viewed. It is also chosen due to the speed of transactions within the network. It allows users to communicate and collaborate faster. Try to think about what such a network looks like… The decentralized nature of the technology makes users feel they work in a better and more trustworthy environment. This is why everyone who is working internally has access to each other’ s work without a central authority. This removes the fear of having someone above their heads who would create trust issues. External users can’t also access the network… This means that malicious individuals can’t check what is happening inside the network.
3. Hybrid Networks
Hybrid Networks are a mixture of private and public designs that have the benefits of public blockchains and very few of the disadvantages of both. The hybrid blockchain serves the need to work in a private environment but then verify what has been done. It basically takes all the trust concerns that exist with private blockchain and it doesn’t completely ameliorate them but it assists them. In this way, Vendors and users are able to say “I have a verification stage whereby I can be sure that what is going on within the network is actually going on”. And this is very important for transparency reasons. The fact that there is selective data exposure enables companies to leverage the private side to work internally and the public side to present only the results and data that are appropriate for specific business logic, with public Proof of Work.
Each type can be used in specific contexts which would benefit from their advantages. However, blockchain types do not necessarily provide immediate consistency. There are concerns that need to be taken into consideration when using blockchain.
Blockchain is not necessarily cryptocurrency…
Blockchain is not necessarily distributed or immutable…
Blockchain is not necessarily public, private, or hybrid…