Monday, August 15, 2022

What Are The Different Types Of Blockchains

Different Blockchains: Ethereum Vs Cosmos Vs Hyperledger And More

Understand the types of blockchain [3 of 20] | Blockchain for Beginners

Different Blockchains Smart contracts and the blockchain technology are all the rage right now. More and more people are trying to get into this amazing space for one reason or another. If you are new to this technology and are looking for a quick primer on blockchain-based developing platforms then this guide is perfect for you. The platforms that we are going to be focussing on and comparing are:

Private Vs Public Blockchain Types

The implications of the main types of distributed ledger networks, public and private, can be different at varying stages. However, the principle of work remains the same, and fulfills all user needs requiring a peer-to-peer market. The main distinction lies in membership: it can be for selected people, or for anyone in the network.

Img Private vs. public blockchain types

Distributed ledger technologies are built either on permissions, or without them. In the permissioned blockchain definition, members of the consortium are verified to interact with the network.

In contrast, permissionless blockchain allows anyone to participate in the network. Bitcoin and Ethereum blockchains are both permissionless, as anyone can become a participant. The public blockchain can be permissioned or permissionless, as well.

Img Permissioned and permissionless types of blockchains

Types Of Blockchain Technology Explained

Jul 28, 2021 Jul 28, 2021

Blockchain is more than just Bitcoin and other cryptocurrencies. There are four main types of blockchains, each with its own advantages, disadvantages, and use cases.

When newcomers first come across cryptocurrencies, one of the basic concepts they have to understand is the technology that enables it, blockchain. This is the easy step, as blockchain at its core is a database distributed across a network of computers. However, how that network is secured is an entire matter altogether, which is why we have different approaches to blockchain security.

Even the two largest cryptocurrencies Bitcoin and Ethereum use different blockchains. So, why would a cryptocurrency use a specific network type? There are various reasons, such as privacy or the environmental impact of securing the network. These factors, amongst many others, show the importance of understanding different types of blockchain and how they function.

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What Are The Business Benefits Of Blockchain

The primary benefit of blockchain is as a database for recording transactions, but its benefits extend far beyond those of a traditional database. Most notably, it removes the possibility of tampering by a malicious actor, as well as providing these business benefits:

  • Time savings. Blockchain slashes transaction times from days to minutes. Transaction settlement is faster because it doesnt require verification by a central authority.
  • Cost savings. Transactions need less oversight. Participants can exchange items of value directly. Blockchain eliminates duplication of effort because participants have access to a shared ledger.
  • Tighter security. Blockchains security features protect against tampering, fraud, and cybercrime.

Blockchain And Internal Audit

Different Types Of Blockchains In The Market and Why We ...
Blockchain Basics & Cryptography, Gary Gensler, Massachusetts Institute of Technology, 0:30

The need for internal audit to provide effective oversight of organizational efficiency will require a change in the way that information is accessed in new formats. Blockchain adoption requires a framework to identify the risk of exposure associated with transactions using blockchain. The Institute of Internal Auditors has identified the need for internal auditors to address this transformational technology. New methods are required to develop audit plans that identify threats and risks. The Internal Audit Foundation study, Blockchain and Internal Audit, assesses these factors. The American Institute of Certified Public Accountants has outlined new roles for auditors as a result of blockchain.

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Why Blockchain As A Service Is Gaining Adoption From Enterprises

Early adopters of blockchain technology, like other early technology adopters, have had to bear the brunt of the challenges with building on any new platform. Setup challenges, poor developer tools and operational issues have long been the standard with standing up new implementations.

WeĆ¢ve now reached a point, however, where Blockchain as a Service offerings can make building a blockchain application more accessible to anyone. As defined by Investopedia, Blockchain as a Service is an offering that allows customers to leverage cloud-based solutions to host, build and use their own blockchain application and smart contracts.

Service providers like Dragonchain manage all of the backend infrastructure and handle scaling, allowing businesses to focus on their applications. Similar to Software as a Service offerings, this approach offers a low risk vehicle for businesses experimenting with blockchain for the first time to get up and running quickly. Blockchain as a Service makes this possible without requiring a great deal of blockchain expertise and providing a low barrier of entry to get started.

To learn more about blockchain applications on different types of chains, be sure to read about the Dragonchain business solutions.

Classification Of Blockchain System

Blockchain can facilitate authentication and authorization without using any trusted authority. Due to its unique advantages and applications, the blockchain paradigm is on a fast track. The adoption and adaptation are on the higher side. Enterprises are rolling out newer blockchain use cases in order to make it more visible and viable. Resultantly there are a few blockchain types. There are certain use cases mandating for a couple of different types: public/permissionless and private/permissioned.

The scenario of different types of blockchain is as shown in Fig. 2.

Fig. 2. Types of blockchain.

Louise Axon, … Sadie Creese, in, 2018

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What Blockchain Represents The Future Of Blockchains

Even if we are only at the beginning of the essential concept of decentralization through blockchains, we can already get an idea of the future evolution of blockchains.

On the one hand, the purists for whom there is only the Bitcoin blockchain that is viable as a true decentralized network, since it is the first and that it is known to be extremely secure . But it is limited by its source code to the simple transfer of its cryptocurrency: Bitcoin.

On the other side, there are strong supporters of the Ethereum blockchain thanks to its many possibilities of applications in smarts contracts. This is much more appealing to large companies and the business world as a whole.

The world of finance is particularly interested in the key concept of the blockchain but not just anyone: the private blockchain mainly. Is this proof that closed blockchains will dominate the world of finance and technology in the coming decades?

The internationally renowned audit and consulting firm Deloitte has studied the subject .

And a relatively unsurprising figure emerges from this study: for more than half of the institutions and companies surveyed, it is the so-called private or consortium blockchain that will enable the global adoption of this technology. Thus, according to this study, only 11% rely on public blockchains

Feel free in the comments to give me your opinion on the issue

Read about the Altcoin Magazine Mastermind Event here.

What Are The Different Types Of Blockchain Technology

Types of Blockchain Explained | Public vs Private vs Hybrid Blockchains

Before we begin talking about the different types of blockchain technology, how about we take a quick look at what blockchain technology is? Watch this video below to get a better idea:

Now that we have blockchain technology explained, lets check out some interesting blockchain stats before we talk about the different types of it.

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What Is A Distributed Ledger

Despite confusing acronyms such as DLT in financial and Fintech circles, the good news is that this technology is relatively easy to understand. A distributed ledger is a database that exists across several locations or among multiple participants. By contrast, most companies currently use a centralised database that lives in a fixed location. A centralised database essentially has a single point of failure. However, a distributed ledger is decentralized to eliminate the need for a central authority or intermediary to process, validate or authenticate transactions. Enterprises use distributed ledger technology to process, validate or authenticate transactions or other types of data exchanges. Typically, these records are only ever stored in the ledger when the consensus has been reached by the parties involved.

All files in the distributed ledger are then timestamped and given a unique cryptographic signature. All of the participants on the distributed ledger can view all of the records in question. The technology provides a verifiable and auditable history of all information stored on that particular dataset.

The Role Of Miners In Cryptocurrency

How exactly do you get your virtual hands on different types of cryptocurrency? You can buy it the old-fashioned way, by buying it on an exchange like Coinbase . You can also trade crypto on an exchange for other types of crypto . Some blogs and media platforms pay their content providers in crypto.

Then there are the miners. Miners usually dont pay directly for their crypto they earn it in various ways: e.g., through a painstaking, high-tech process of verifying transactions on a blockchain network.

Sounds sweet, but mining isnt cheap. It requires powerful, expensive hardware and lots of electricity, and the competition can be fierce.

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Why Should I Know About Stablecoin Variants

The interest in learning about what are the different types of stablecoins? also relates largely to the profound market downturns. The massive levels of volatility in the crypto world noted recently have been responsible for increasing the demand for stablecoins. As of now, the largest stablecoin, i.e., Tether or USDT, has a market value of almost $58 billion. The second-largest stablecoin in the crypto economy, USD Coin or USDC, holds a market value of almost $15 billion. So, you can clearly anticipate the popularity levels of stablecoin and the reasons for eagerness to discover more about stablecoin categories.

Private Blockchain: Use Cases

Types of Blockchains

Public blockchain can be compared with the intranet, in which all the members are verified and use is limited to one organization.

Because the paperwork of an organization is stored centrally in one place or network, this type of server is prone to hacks and violations. In this case, blockchain is the high-level solution to optimize business management. Access is limited, and data is encrypted within the company, keeping your business safe.

To demonstrate, MONAX is a software platform developed on the private blockchain. It supports blockchain services, smart-contract development, EVM contract implementation, etc. Another example, MultiChain, allows you to build high-performance blockchain applications.

Upgrade Your Business by Implementing the Private Blockchain

Here are the main pros of using private blockchain for your business or startup:

  • higher scalability

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Difference Between Blockchain And Cryptocurrency

Well, the difference between blockchain and cryptocurrency is the same as the difference between your mobile app and your mobile platform technology. For eg, your app can be WhatsApp, Instagram, or Facebook. While the platform can be iOS or Android. But, in the end, the application will run on the platform. Similarly, blockchain is the platform, while cryptocurrency is the application.

Whaaaaaat? Yes, dont worry. This confusion is quite common, as both cryptocurrency and blockchain were introduced at the same time with Bitcoin. And do remember that Bitcoin was the first application of cryptocurrency on the blockchain platform.

An Optimal Solution: Public Blockchain

The distributed nature of public blockchain makes it more secure and transparent. The most prominent examples are blockchain protocols based on Proof of Work , in which each node in the network has to solve a cryptographic problem in order to sync with the network. The network starts as decentralized, but operates as distributed. This difference is illustrated in the following example:

Img The difference between distributed, centralized, and decentralized blockchains

The public blockchain is an open network. It lets anyone use the network, execute transactions, and maintain a ledger. The largest networks in production are Bitcoin, Ethereum, Litecoin, and Dash.

The advent of blockchain technology and the implementation of smart contracts relieves us of lengthy financial procedures, verifying our identity, or signing a lot of paperwork.

Benefits of Using the Public Blockchain for Data Management

  • solves efficiency, security, and fraud problems

  • democratic mechanism of consensus

  • anyone can generate a transaction and verify it

  • anyone can keep track of the transaction

  • preserves the anonymity of the sender

  • no costs for using it for the development of a decentralized application

Disadvantages of the Public Blockchain

  • reduced efficiency

  • a substantial amount of computational power is required to maintain a distributed ledger

  • no privacy for transactions

  • limited block size

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How To Invest In Blockchain Technology

Blockchain technology and stocks can be a lucrative investment, and there are several ways to take the next step toward making your first blockchain investment purchase. Bitcoin is typically the first thing that comes to mind when it comes to investing in blockchain technology, and it shouldnt be overlooked. Aside from Bitcoin, there is also the option of investing in cryptocurrency penny stocks, such as Altcoin and Litecoin. There are also certain apps and services that are in the pre-development phase and that are using blockchain technology to raise funding. As an investor, you can buy coins, with the expectation that prices will go up if the service or app becomes popular. Another way to invest in blockchain technology is to invest in startups built on blockchain technology. Finally, there is always the option to invest in pure blockchain technology.

Some Specifications Of Public Blockchains:

Types of Blockchain Explained | Blockchain Types
  • Transactions happening through public transactions are completely transparent.
  • A public blockchain is fully decentralized.
  • No individual controls this type of blockchain.
  • No individual or entity controls transaction records.
  • No individual or entity controls the order in which transactions are processed.
  • Public blockchains are censorship-resistant. Therefore, it becomes hard for authorities to shut them down.
  • Tokens designed to incentivize/reward users for their financial behavior within the network are associated with the public blockchain.

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How Does A Block Work

In any cryptocurrency, there are a huge number of transactions occurring every day throughout the world. It is important for the users to keep track of these transactions, and they can do it with the help of blocks. A block contains the recent data and every time the block is completed, it becomes a part of the past and makes room for a new block on the blockchain.

The completed block is a permanent record of prior transactions, and new ones are recorded in the current one. As a result, the entire system enters into a loop that permanently saves all data.

Let us look at an example of a Block

Blockchain can be compared to a regular bank. A blockchain is similar to a record of bank transactions, but a block might be a single transaction confirmation printed out by a bank ATM after you use it. Individual blocks on the blockchain network form a ‘ledger,’ similar to how an ATM or bank records your transactions. Blockchain, on the other hand, records the chain across all of its users rather than just one. This is comparable to a bank, except the blockchain provides greater anonymity than traditional financial organizations.

Concerns Surrounding Blockchain Technology

Despite the various advantages, blockchains that lack a stable ecology of network participants or a verified consensus process are vulnerable to attacks and centralized control. Decentralization and throughput the amount of data a blockchain can process in a given amount of time are important factors to consider. The Blockchain Trilemma balancing and maximizing scalability, decentralization, and security in one network is receiving much attention.

Other worries surrounding blockchain are related to the environment. The proof-of-work consensus method, for example, often consumes a large amount of electricity to operate. Other concerns revolve around the technological complexity and intimidation factor that blockchain technology might bring to businesses and individuals.

The quick rise of cryptocurrencies on the global financial scene was only the beginning of blockchain technology’s integration into business and our daily lives. More sectors are experimenting with blockchain technology, and more people are becoming aware of the utility and benefits that blockchain-based goods and services may provide in their everyday lives. Unfortunately, the blockchain business shows no signs of slowing down, and the technology has a lot of potential to become a component of, or maybe completely replace, our world’s digital architecture in the future.

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Blockchain Revolutionary Technology In Simple Terms

Such technology is understood as a system that has no central server. Blocks are shared among users involved in the system. Up-to-date encryption algorithms protect every block from editing and copying by other users.

What is the working mechanism of blockchain?

  • A user creates the first, initial block that is the basis of the whole system.
  • Every next block contains information about previous ones, containing details of confirmed transactions.
  • Users cannot change a block, as such an attempt may destroy the whole system where all blocks are interdependent.
  • According to the Bank of England, blockchain is a technology that allows people who dont know each other to leverage a database trustingly.

    Blockchains and crypto technologies are frequently understood as integral components. Such a system originates from Bitcoin meanwhile, it expands the influence, being implemented in cloud solutions, online banking, authentication systems, logistics, and other sectors.

    How Is Blockchain Used

    Different Types Of Blockchains In The Market and Why We ...

    Blockchains store information on monetary transactions using cryptocurrencies, but they also store other types of information, such as product tracking and other data. For example, food products can be tracked from the moment they are shipped out, all throughout their journey, and up until final delivery. This information can be helpful because if there is a contamination outbreak, the source of the outbreak can be easily traced. This is just one of the many ways that blockchains can store important data for organizations.

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