3 Popular Types of Blockchains
It took me a while to understand Blockchain. Now there are multiple types? Huh? For now, there are three types of Blockchain, since it is an emerging field I can’t assure you a number.
This one, you already know. Bitcoin, Ethereum are examples of this kind of Blockchain. In this type of Blockchain, we don’t have an authority sanctioning a transaction. Let us consider Bitcoin. It is a shared ledger. If I send you 5 Bitcoins, I shout to the people in the network.
“Guys, look I am giving away 5 Bitcoins to this guy”.
Show off, isn’t it? The people in the Bitcoin network hears my message and starts the process of validating the transaction. The person who validates the transaction is not a chosen one. We can’t predict who gets a say. The point is no single person has the power to validate transactions. Permissionless Blockchain can be used when you want your system be truly democratic. Anyone can create smart contracts, transfer money or contribute data. Here users are likely to remain anonymous. Yes, you can protect sensitive information in a Permissionless Blockchain.
“Luke wants to build an app where anyone can voice their opinion about political parties. He wants to protect the privacy of the contributors.”
In Luke’s situation, we can use a Permissionless Blockchain. Anyone anywhere would be able to contribute their opinions on the app. No authority can remove their opinions, it will be permanently recorded.
Public Permissioned Blockchain
Here we have chosen people who sanction a transaction. It could be an authority, senior employee, government, institution or anyone assigned. The data can be viewed by the public (Sensitive information can be protected).
“Elisha wants to bring transparency to Tuna fish supply chain. She wants people to know where the fish was caught, processed, packaged, etc”
Here when you buy the fish, you can scan the code and track its journey from the point it was caught. You are only allowed to view the data. You don’t have permission to write anything. The fisher man’s IOT device is allowed to write data when the fish is caught. The food processor who processes the fish is allowed to write data and so on. It doesn’t make sense for the public to write data into it. Here the data written like any Blockchain is permanently recorded.
Private Permissioned Blockchain
This is similar to Public Permissioned Blockchain expect for one thing. The data is not available for public view.
“Sara’s business involves two other small businesses and an accounting firm. They involve in regular transactions with each other.”
In Sara’s situation, her transaction with other businesses is private information. It shouldn’t be available for public view. The data, however, is permanently recorded. Here when they transact with each other, they don’t have to maintain a separate ledger. Every transaction will be tallied instantaneously.
I hope you got an idea of the types of Blockchain. Selecting the appropriate Blockchain is a must, you will save money and time. In some cases, you don’t even need a blockchain. I have prepared a questionnaire here to help you decide if you need a Blockchain. In the coming days we can expect more innovations in Blockchain.
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