Blockchain technology is nothing but a distributed and decentralized record-keeping mechanism that stores data across multiple touchpoints within a network of participants and ensures that there is no single point of failure. This essentially means that even if the data is compromised at one storage point, it is safely stored in multiple other touchpoints. Additionally, data in a blockchain can only be entered, but it cannot be edited or deleted, thus making it immutable. All in all, blockchain technology is equipped with the features of security, transparency, and accessibility, as it offers cryptographically secure, but uninterrupted access to all network participants.
In this context, it is fair to say that blockchain technology can be applied across a wide range of applications and industries. However, it is important to understand that every application needs a specific kind of blockchain framework and a one-size-fits-all approach is not feasible. Blockchain solves this problem as it is well suited to cater to various demands across all applications. This is because there are several kinds and types of blockchain, each of which is uniquely designed for specific purposes. In this blog post, we will take a detailed look at the different types of blockchain and how they differ from each other. Blockchain can broadly be classified into four types – public, private, and hybrid. The key difference between these is related to the kind of accessibility that the network participants get. Let us look at each of these in detail.
Public blockchains allow access to anyone and everyone across the globe irrespective of their geographical location. These blockchains are highly decentralized and permissionless. In other words, anyone across the globe can access these blockchains, request and validate transactions. Moreover, all nodes of a public blockchain have equal access. Public blockchains are hence, very inclusive. Bitcoin and Ethereum are some of the most prominent public blockchains. Anyone can access these, deploy decentralized applications and run their own micro-networks for various purposes. This is particularly true for the Ethereum Blockchain as it is the host to innumerable decentralized applications.
Unlike public blockchains, private blockchains are not open for all and do not grant access to anyone and everyone. These are not completely decentralized in nature. Private blockchains are particularly useful for several business operations where widescale accessibility is not desired and the demand is to only grant access to a selected number of trusted participants. For example, a business might want only its top and mid-level management to have access to confidential information stored on a private blockchain. This does not defy the core purpose of the technology i.e decentralization. Instead, it instills a higher degree of security within an otherwise open-access environment.
As the name suggests, hybrid blockchains are a combination of private and public blockchains. Ripple is one of the most prominent examples of a hybrid blockchain. In this type of blockchain, some of the nodes have private access, while some others have public access, as pre-coded or modified by the blockchain developer. This essentially means that anyone can access a hybrid blockchain but the level and depth of actual information/data that they are able to access will depend on the accessibility permission granted to them, based on the node they belong to. These blockchains are very suitable for scaling business operations as they eliminate the need to develop and deploy separate private and public blockchains to cater to various levels of stakeholders within an organization.
Each of these blockchain kinds has its own set of advantages and disadvantages depending on the exact requirements, budget, and applications. It is important to tally across these points to determine what would be best suited for that particular use case. Either way, any kind of blockchain will inherit the merits of the technology to offer a secure and transparent architecture.
Talking about blockchain technology, one of the most recent developments in this space is the emergence of ModiCoin, a blockchain-based DeFi solution that aims to optimize the way people handle their digital assets while trading, investing, holding, and saving. It has recently launched its private sale round and promises to be a highly advanced and versatile blockchain solution.