What are the 4 types of blockchain?

31 Oct 2022 By PAYCEC

04 types of blockchain are public blockchain, private blockchain, hybrid blockchain, consortium blockchain.

• Public blockchain

This is how it works. The public blockchain is the first type of blockchain technology. This is where cryptocurrencies such as Bitcoin emerged and helped popularize distributed ledger technology (DLT). It eliminates the drawbacks associated with centralization, such as decreased security and transparency. DLT does not store information in a single location, but rather distributes it throughout a peer-to-peer network. Because of its decentralized structure, it necessitates some mechanism of confirming the authenticity of data. This approach is a consensus process in which blockchain participants agree on the present state of the ledger. Proof of work (PoW) and proof of stake (PoS) are two popular approaches of reaching an agreement.

• Private blockchain

This is how it works. A private blockchain is a blockchain network that operates in a restricted setting, such as a closed network, or that is controlled by a single entity. While it functions similarly to a public blockchain network in terms of peer-to-peer connectivity and decentralization, this sort of blockchain is substantially smaller in scale. Instead of allowing anybody to join and donate computer power, private blockchains are often run on a small network within a company or organization. Permissioned blockchains and business blockchains are other names for them.

• Hybrid blockchain

This is how it works. When a business wants the best of both worlds, it will employ hybrid blockchain, a type of blockchain technology that includes components of both private and public blockchain. It enables businesses to build up a private, permission-based system alongside a public, permissionless system, allowing them to manage who has access to certain data stored on the blockchain and what data is made public.

• Consortium blockchain

This is how it works. The fourth form of blockchain is a consortium blockchain, also known as a federated blockchain, which is similar to a hybrid blockchain in that it combines private and public blockchain capabilities. However, it differs in that numerous organizational members operate together on a decentralized network. A consortium blockchain is essentially a private blockchain with limited access to a specific group, minimizing the hazards associated with only one entity controlling the network on a private blockchain.