How Many Types Does Blockchain Have? How Do the Types of Blockchain Differ?
On Oct 30, 2020
In previous blogs, we talked about blockchain, which is a peer-to-peer chain of blocks containing information about transactions or some programmable smart contracts. In this blog, we will talk about the main types of blockchain, which use for different purposes. Here we will classify blockchain by the level of accessibility and transparency.
A public blockchain is the most independent of the access form of the blockchain. This blockchain has all the main characteristics of the blockchain idea. Here everyone can generate public and private keys and join the blockchain. All those people will be nodes or miners that they are the validator of the transactions that occur in the chain. A public blockchain is the most decentralized and unalterable version of blockchain. Also, everyone can watch the transactions happens in that blockchain. Some sites, such as Bitcoin Explorer, provide that information if you are not the part of the chain. When someone makes a payment, then the application broadcasts the transaction to the network, and nodes receive that information, check its validity, and combine with other transactions and add to the chain. A typical example is Bitcoin and Ethereum. You can get information about them on our blog.
The public blockchain is not perfect, though. It has some drawbacks too. Firstly, Bitcoin blockchain can process only seven transactions while VISA can process 24000 transactions, so it can be ineffective to use it as a worldwide payment service. Secondly, nodes firstly need to solve the complex math problem to add a block to the chain, and each year due to the increase in the number and power of nodes, this process becomes high power consuming. Finally, sometimes PoW could be highly possessed (51%) by one node, then this can make it susceptible to threats.
A private blockchain is the restricted version of blockchain. All members of this network are invited by the entity that has control of the system. The newcomers need permission to write and read the data in the blockchain. Here, the ledger is distributed to people by the central body, but they get the information they need to know. Since not all information is broadcasted to members, then this violates the decentralized feature of the blockchain. The limited access to the data also offers fast, efficient, and energy-saving. Also, a private blockchain is more vulnerable to the hacks because there is a central government of the chain. Considering there is a central government, then it can be hackable. However, in a public blockchain, a copy of the data is in all nodes, and it is hard to hack them all.
As its name suggests, hybrid blockchains are the combination of the public and the private blockchains. It took the best sides of those blockchains. The members can decide which information will be made publicly available and which people can join the network. If there are limited people, then it will be fast to broadcast the data to other nodes.
Sidechain is the separate blockchain that is attached to the main blockchain with a two-way relationship. So, sidechain is in contact with the parent blockchain with predetermined settings. So, parent blockchain can use sidechain as supplementary. Since sidechain does not exist separately, then those parent blockchains use them to solve its two limitations; scalability and flexibility. For example, scalability increases transaction per second (TPS), and if masses use the cryptocurrencies, sidechain can help to increase the capacity. Flexibility is the capability to use different currencies on the blockchain. Sidechains allow those currencies to migrate to the main blockchain.
We elaborately examined the types of blockchain above. As we can see, there are four types of blockchain. These types differ in the context of usage. Companies will probably use private or hybrid blockchains. If you are an individual, probably your transactions will be on the public blockchain. If you created some altcoins, you would utilize sidechains as well. Those types of blockchain have various uses, and it depends on your intention about it.