Blockchain is an open and distributed ledger that can be used to record transactions between two parties. This way of recording a transaction is both permanent as well as verifiable, which makes it one of the best ways to keep transactions. Blockchains are built on the open-source platform. So different versions of these blockchains are possible, which are developed as per the needs of different industries.
Different Types of Blockchain
Now, as we are clear about blockchain technology, we must look into different types of blockchains, which are categorized by the applications of blockchain.
•Public (Permissionless) Blockchains
•Private (Permissioned) Blockchains
1. A Private Blockchain
A Private Blockchain (also known as Permissioned Blockchain) has restrictions on who can access it and participate in transaction and validation. Only pre-chosen entities have permissions to access the Blockchain. These entities are chosen by the respective authority and are given permission by the Blockchain developers while building the Blockchain application. Suppose there is a need to give permissions to new users or revoke permissions from an existing user, the Network Administrator can take care of it.
2. A Public Blockchain
A Public Blockchain (also known as Permissionless Blockchain) is a blockchain that anyone in the world can read, send transactions too and expect to see them included if they are valid, and anyone can participate in the consensus process – the process for determining what blocks get added to the chain and what the current stat is.
Public blockchains are secured by cryptoeconomics – the combination of economic incentives and cryptographic verification using mechanisms such as proof of work (Bitcoin) or proof of stake (Ethereum). These blockchains are generally considered to be “fully decentralized.” One of the drawbacks is the substantial amount of computational power necessary to maintain a distributed ledger at a large scale.
3. Hybrid Blockchain
Hybrid blockchains are blockchains that are controlled by a single organization, but with a level of oversight performed by the public blockchain, which is required to perform certain transaction validations. It combines the privacy benefits of a permissioned and private blockchain with the security and transparency benefits of a public blockchain. That gives businesses significant flexibility to choose what data they want to make public and transparent and what data they want to keep private.
4. Consortium Blockchain
Also named Permissioned Public, this is a distributed ledger where the consensus process is controlled by a preselected set of nodes. The right to read the blockchain may be public or restricted to the participants, and there are apps that allow members of the public to make a limited number of queries and get back cryptographic proofs of some parts of the blockchain. These sort of blockchains are distributed ledgers that may be considered “partially decentralized.”