With the popularity of blockchain networks, more and more companies apply blockchain technology in order to simplify their supply chain needs management. In those circumstances, it is imperative to make a decision about which type of blockchain is best suited for the project. This topic is about beginner’s guide to 4 types of blockchain networks
1. Public Blockchains
Public blockchain tops the list of Beginner’s guide to 4 types of blockchain networks. This type of blockchain network is permissionless in nature. That means everyone can join without your permission. Moreover, Public blockchain is completely decentralized, so it allows nodes of blockchain access, create new data and validate blocks of data.
Up until now, public blockchains have been mainly used for cryptocurrency exchange and mining. You may have heard of popular public blockchains like Ethereum, Bitcoin and Litecoin. Node “mine” cryptocurrency can easily generate blocks for the transactions requested on the network by solving cryptographic equations. In the end of the attachment, the mining nodes gain some cryptocurrency. Miners essentially act as new-age bank tellers creating a transaction and receiving (or “mine”) a fee for their efforts.
2. Private (or Managed) Blockchains
Private blockchains, also known as managed blockchains, are licensed blockchains controlled by a single organization and are common types of blockchain networks. In this type of blockchain, a node can be determined by the central authority. It’s not necessary that the central authority has to grant each node the same permissions to perform functions. For example, this type of blockchain is the business-to-business virtual currency exchange network Ripple and Hyperledger – this is an umbrella project that is ambitious to open source blockchain applications.
Together with public blockchains, private blockchains have their downsides. This is also a common blockchain that is used by many great companies all over the world. However, when the public blockchains tend to take longer to validate new data than private blockchains, the private blockchains are more susceptible to fraud that draw bad actors. To address these limitations, companies and hybrid blockchains have been developed to protect data and documents. Under your own intentions, be smart and make a good decision.
3. Consortium Blockchains
Consortium blockchains are licensed blockchains that are managed by a group of organizations, rather than one entity, and have the same mechanism in the case of the private blockchain. As a result, federated blockchains enjoy more decentralization than private blockchains, resulting in a higher level of security. However, forming associations can be a fraught process as it requires cooperation between several organizations, which presents logistical challenges as well as potential antitrust risks (which we will look at in an upcoming article). Moreover, some members of the supply chain may not have the necessary technology or infrastructure to implement blockchain tools.
Based on the development of enterprise software company R3, a popular consortium. In the field of supply chain, CargoSmart has developed the Global Shipping Network Consortium, a non-profit blockchain consortium that aims to digitize the shipping industry and enable maritime industry operators to work more collaboratively.
4. Hybrid blockchains
Well known as a type of blockchain that is controlled by a single organization, but with a degree of oversight exercised by the public blockchain, required to perform certain transaction validation. A famous company that applies the hybrid blockchain so successfully is IBM. With this high technology management, IBM food trust improved efficiency throughout the whole food supply chain.
The blockchain craze is hitting the entire financial market. Blockchainization and digital transformation is sooner or later the story of modern businesses. Depending on the circumstances of your company make an informed type of blockchain network choice.
If you have any questions about blockchain or need advice in this area, let the experts of Smart OSC help you! Be a wise investor in the digital age.
Contact us if you have any queries about Blockchain development services.