Blockchain technology is becoming prevalent and is a powerful technology for businesses to improve their operation, customers and employee experience. However, the companies, that want to utilise this kind of technology, need to know about each type to conduct appropriate approaches and optimize blockchain. Our article will give you basic information about four main types of blockchain, their pros and cons, and then link them to actual usage.
Most Common Types Of Blockchain Technology You Should Know
The first type of blockchain technology is open to everyone, which is called public or permissionless. It means, everyone can take part in, find information and control the system transparently. For instance, the network for cryptocurrencies is a remarkable public blockchain that you may meet. A permissionless blockchain is safer and more reliable than others. Public blockchain increases collaboration from everyone, which makes blockchain become more valuable with a wide range of data sources. However, it is considered the slowest type of blockchain because it allows a large number of people to come and verify at once, which can cause slow response and overload.
In contrast with a public blockchain, there is a type of blockchain that just allow certain people to join, which is called a private, or permission blockchain. It operates in a closed network and belongs to a specific organization. In terms of technology, it is not too different from the permissionless blockchain as it is also decentralized and runs on a peer-to-peer basis, but within a private network. The private blockchain is more vulnerable to hacking and data leaking as manual validation can not eliminate all the risks. In fact, most well-known blockchain platforms, especially in the supply chain and asset ownership field, have been developed from private blockchain technology as the organizations can control, protects and update the network to have better and outstanding performance.
There is a combination of two types of blockchain we have mentioned, which is called hybrid. To meet the demands of the organization external and internal, businesses classify different kinds of data and put them in public or private blockchains to permit different stakeholders to get evolved. This type of blockchain technology is stronger than others, has better performance and has more trustworthy security than the public one. Moreover, the users who utilize a hybrid blockchain also have high-secured privacy.
Here, we have a variation of a private blockchain, which is called Consortium. Like private blockchain, the users need permission to join the network. However, there is no single owner of the consortium blockchain, but a group, that owns, controls and manages it. This types of blockchain technology also have weak security as a normal feature of private blockchain.
We have introduced four main types of blockchain technology you may encounter when building blockchain products. Having a detailed understanding of each kind helps you make the right decisions on choosing blockchain type and develop your system effectively. However, if you are still having concerns, try to contact SmartOSC Blockchain to get the best advice and strategies for blockchain technology.
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