Undoubtedly, blockchain has evolved a lot in the last decade. When blockchain technology was first introduced to the world, it was a public blockchain type with a cryptocurrency use case. It provided the concept of distributed ledger technology (DLT). This protocol enables the secure functioning of a decentralized digital database. The DLT concept changed how we solve things around us. It gave organizations the ability to work without depending on a centralized entity.
Currently, we are at a point where there are different types of blockchain technology. Each type of blockchain has its purpose in solving a particular problem or set of problems. More than that, many companies are using blockchain to increase profits as much as possible.
Table of Contents
Public Blockchain
Public blockchains are the most popular and widely used blockchain network. The public blockchain is completely decentralized. All data can be accessed by anyone and is free to use without one individual or other party controlling it. Public blockchains are typically secured using Proof-of-Work (PoW) or Proof-of-Stake (PoS) consensus algorithms. Additionally, most public blockchains are fully decentralized, with limited nodes in charge of processing transactions. Examples of public blockchains are Vexanium (VEX), Bitcoin (BTC), Ethereum (ETH), etc.
Private Blockchain
Unlike public blockchains, private blockchains are not decentralized. A private blockchain is a restricted type of blockchain network created by an entity where only they have access permissions. Private blockchains usually use a centralized verification system and are controlled by the network’s creators. Its centralized nature makes it more vulnerable to third-party attacks.
Consortium Blockchain
A consortium blockchain is a new approach designed to solve organizational needs, especially for those who need public and private features. Despite being decentralized, consortium blockchains allow some aspects of organizations to be publicly accessible and some to be limited. Consortium blockchains do not have centralized power like private blockchains because they are managed by more than one organization. However, this type of blockchain has all the features of a private blockchain, such as privacy, transparency, and efficiency.
Hybrid Blockchains
A hybrid blockchain is a combination of public and private blockchains. This type of blockchain uses the features of both types: private permission-based and permissionless systems. With this type of network, users can control who gets access to the data stored on the blockchain. Only a particular part of the data or records from the blockchain can be published by keeping the rest secret in the private network.
Which Blockchain Type is Better?
Each type of blockchain has its advantages and disadvantages. So, before we determine which type of blockchain is right for our project, we must first know in what sector we will use blockchain technology.