What Are the Different Types of Blockchains That Exist Today?

Types of BlockchainsIf there is one buzzword on the lips of those who are looking to the future, it’s blockchain. Whether they are involved in economics, logistics, or even agriculture, what started in 2009 with a cryptocurrency called Bitcoin is on course to change the world around us as we know it.

But while most of us by now have heard of blockchain, how it works is still a mystery for many. 

If you are among them have no fear! Our quick guide will help you understand the basics of the different types of blockchains. 

1. The Public Blockchain

For most people, if they already know of the basics of blockchain they will have in mind the public blockchain. This system, implemented at the start of blockchain technology with Bitcoin is based on the fact that every facet of it is transparent. 

In contrast to the different types of blockchain, the public blockchain is open to anyone who has internet access. It uses distributed ledger technology (DLT) which means that any transactions made are visible and verified by other users known as nodes. Nodes are also able to access any previous transactions and mine.

The main benefit of public blockchains is their decentralized nature. Most cryptocurrencies work using a public blockchain.

2. The Private Blockchain

A different way of using blockchain technology is via a private blockchain. As the name suggests, this is a restricted blockchain network, where transactions and verification take place. However, there will be different levels of access for those who make up the private blockchain. 

People are only able to access the information in these types of blockchains after receiving an invitation. In addition, each node is a known party. This takes away the anonymity that a public blockchain is lauded for. 

So who might want to use a private blockchain? 

The number one candidates and users are private companies, some of which can be found on StockGeist.ai. Many are already using some form of local intranet and need to control who has access to sensitive data. In cases like these private blockchains add an additional layer of security which can provide peace of mind.

3. Hybrid Blockchain

In both the types of blockchains we have spoken about there are advantages and disadvantages.

Public blockchains are transparent, but they can be slow in processing transactions. Private blockchains work in a far more streamlined manner. However, only a few centralized nodes are in control of the system which allows room for potential manipulation, the absence of which is one of the core advantages of using blockchain in the first place. 

For these reasons, hybrid blockchains were introduced.

Flexible in nature, hybrid blockchains allow organizations to use the permission-based system but also allow some information to be public. Those with the right level of clearance can choose what they wish to remain in the house. This also means that they can use the public blockchain to request verification on sensitive data without that information becoming public. 

This model tends to allow for a more dynamic way of working with added security.

The Different Types of Blockchains Made Simple

The world of blockchain can seem confusing however keeping these 3 core principles in mind should help as we will likely continue to use this technology long into the future.

We hope you enjoyed learning about the different types of blockchains with us. Don’t miss out on the latest in technology by reading the other great content on our site!