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Different Types Of Blockchains- Public, Private And Consortium
There is every probability that people must have heard about blockchain technology and its massive potential to change and revolutionize the financial world. According to the Merriam-Webster dictionary, blockchain technology is “an open, distributed ledger that can record transactions between two parties efficiently in a verifiable and permanent way.”
With the birth of Bitcoin in 2008, the world was exposed to a new concept, blockchain technology. With its growing popularity, people are now realizing that utilization of blockchain technology goes beyond Bitcoin. The technology has promised to make a huge impact on the financial and banking sector.
The blockchain technology can further be diversified into three types of blockchains.
The next question that arises is what is the need of different types of blockchain? Each industry utilizes the technology in different ways. Hence, each type of blockchain serves its own specific purpose.
Let us have a glance at the aforementioned blockchains:
As the name points out, a Public Blockchian is publicly visible and accessible and imposes no restriction on its participator or validator. All the transactions on this type of blockchain are entirely transparent implying that anyone can inspect the transaction taking place.
These blockchains are entirely decentralized meaning, no one has complete control over the blockchain. The control over the blockchain is equally divided between all the nodes. Hence, these type of blockchains are also nicknamed as fully-distributed blockchains.
Public blockchains have a token associated with it which serves as an incentive for the participants in the blockchain. Some famous examples of them being, Bitcoin (BTC), Ethereum (ETH) , Litecoin (LTC), etc.
Private blockchain a.k.a Permissioned Blockchain imposes restrictions on who can participate and validate the transaction. The participants in this type of network need permission to join in. These participants are chosen and appointed by the respective authority. This makes these blockchains more centralized than the previously discussed Public Blockchians.
Private Blockchains serve great importance to private organizations or enterprises. These private companies use blockchain to save sensitive information which is to be shared only with
the specific entities.
Private blockchains may or may not have a token associated with it.
Last but not the least, Consortium Blockchain carries many properties of a private blockchain. The major difference here is that a Consortium blockchain is controlled by a group rather than one single entity.
Consortium Blockchian is sometimes also seen like a hybrid of Public and Private Blockchain. It is right to say it partly Public as the Blockchain is shared with different nodes. But at the same time, it is also private as the nodes allowed to have access is controlled by a group of authority.
This type of blockchain is employed when two organisations are willing to share the blockchain. But at the same time, they want to keep it protected from the public.
After looking at the different types of blockchains, it is observed that the technology is being employed in different industries in different manners. From giving birth to cryptocurrency to sharing information within and between organisations, Blockchian technology has been a revolution in many ways.
Therefore, it won’t be wrong to say that blockchain technology will help simplify and transform industries in a number of ways.
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