The evolution of the internet has changed everything, the business has gone online and so does the financial transactions. Do you know what’s trending? The Blockchains!! Well, if you are totally new to the concept then here we are with the post on What are Blockchains and how many types of blockchains are there.
If you are a crypto investor then you might have heard of the term Blockchain. If it is so then let us tell you that most of the transactions that take place in the crypto world are done on public Blockchains. Their data is easily available to all. Not all of us are aware of the fact there are various other types of blockchains as well.
These blockchains are also used for transactions. But, all of them have their own features, pros, and cons. So, let us not waste much of your time and start with a post that will explain to you the meaning of Blockchain and the types of blockchains available.
What Is Blockchain And How Many Types Of Blockchains Are There?
The standard definition of the Blockchain defines the blockchain as the growing number of records in a list. These records are known as Blocks which are linked with each other using cryptography. Each block in the Blockchain consists of three major components; these are the cryptographic hash of the previous block that shows the link between the block, a timestamp, and the transaction data that contains the summary of the transaction stored.
If you are wondering that can the block in the blockchains be altered then let us clear it to you? No, you cannot alter the blocks in the blockchain and the reason is the cryptographic hash of the previous block in every new block. If you need to alter any block in the chain then you need to change its hash, which is next to impossible and it provides immense security to the blockchain.
Yeah, we know the definition above was quite scientific and if you are totally new to the concept then it might take some time to get processed. No, need to worry Happened to me.
Well, if we explain to you about Blockchain in the layman’s language then it is a public ledger that contains the record of the transaction in the form of blocks.
There are a total of four types of blockchains. Let’s have a look at them one by one.
1. Public Blockchain
Public blockchains are decentralized in nature which means that they do not have any regulating body to monitor the transactions taking place in the blockchain. They are permissionless blockchains any person can join. The Public Blockchains allow all the nodes or the users to enjoy equal rights on the platform. It doesn’t matter even if you are a minor. You can still access this type of blockchain.
Today the public blockchains are majorly used for the mining and exchange of cryptocurrencies. The transactions taking place on the Public Blockchains are transparent and secure which means anybody on the internet can look at the transaction taking place. These types of Blockchains are relatively secure as we said that the data is accessible to all which means the hacker needs to change the data in about 51 percent of the computer to alter the transactions.
Example: Bitcoin, Ethereum, Litecoin
2. Private Blockchain
The next blockchain in the list of the types of Blockchains we have is the Private Blockchain. As the name of both the blockchains Private and Public are opposite in the same manner both the blockchains are totally opposite to each other.
A private Blockchain is a permissioned blockchain that is controlled by a single organization, unlike Public blockchains. The organization in charge can decide who can become the node of the Blockchain and who cannot. The organization decides the right to be given to each node.
The transaction data of private Blockchain is not available publicly this is because it is only partially centralized. This is also one of the major drawbacks of Private Blockchain.
Example: Multichain and Hyperledger projects (Fabric, Sawtooth), Corda, etc.
3. Consortium Blockchains
As we said that the Private Blockchains are less secure so as to overcome the security issue, new types of blockchains were introduced, the name of the blockchain was Consortium Blockchain.
In this blockchain instead of a single organization, multiple organizations are given the right to govern the blockchain. Therefore the blockchain now becomes a little more decentralized thus increasing the security of the blockchain. However, setting up a Consortium blockchain might be a difficult task. First of all, you need to find the organizations that will trust you in the Blockchain process, and second, all of them might not have all the necessary tools to set up the blockchain.
Example: Energy Web Foundation, R3, etc.
4. Hybrid Blockchains
At last on the list of the Types of Blockchains, we have the Hybrid blockchains. These blockchains are a combination of Public and Private blockchains. That means that a part of it is private and a part of it is public.
Let us get it straight it will be controlled by a single organization. The organization can decide which part of the transaction it can let go public.
These were the four types of Blockchains. We hope that you are now clear with the topic of Blockchains and the types of blockchains. We have also mentioned the examples of each blockchain to make it easier for you to understand.
If you still have any doubts or queries in your head then feel free to ask us in the comments section. We will reply back to you as soon as possible. If you found this article interesting and informative then do share it with your friends and let them know about the blockchain and its types.