There has been a surge in the number of enterprises starting their blockchain technologies after the success of Bitcoin. By 2022, it is expected that 60% of CIOs will launch their blockchain projects. Although the technology behind the blockchain network is the same, the end product is driven by the expected user experience. There are four types of blockchain technologies each one having features that solve a specific set of problems.
The efficiency of blockchain technology has improved a lot in the last decade. For instance, the first-generation blockchain had numerous problems such as scalability and efficiency. This article will discuss the different types of blockchain technologies.
This was the first-generation blockchain technology. Its features allow any user with an internet connection to join the network and do transactions. For public blockchain to work, the transactions must be validated by the participating nodes. A public blockchain becomes nonfunctional if the peers required to solve transactions through participation are not available. The advantage of using this type of blockchain technology is that it does not require intermediaries, which means that anyone can join the network.
A private blockchain works in a restricted network or a closed environment. In this type of blockchain technology, permission to join the network is granted by the organization in control of the network. Most organizations prefer to use a private blockchain because it only grants permission to join the network to selected participants. A private blockchain provides its users with similar features as a public blockchain. The only difference between the two networks is that you need to get permission to join a private blockchain while a public blockchain has no joining restrictions.
A consortium blockchain is best described as a blockchain that combines the features of a public and a private blockchain. This type of blockchain technology allows organizations to make some of their aspects private while others remain public. Preset nodes are used to control consensus procedures in this type of network.
Although there are some differences, a hybrid blockchain works in a similar minor to a consortium blockchain. The only difference between these two blockchain technologies is that different organizations can use a decentralized network to collaborate in a hybrid blockchain. The major benefit of using this type of network is that it offers huge scalability compared to other types of blockchain technologies.